Saturday, September 11, 2010

Judge in Northern California forbids patent drafters from accessing competitors trade secrets

The Indian Institute of Technology in Kharagpur, India

Magistrate Howard Lloyd ruled on Friday that a patent agent and attorney involved in prosecuting patents similar to those at issue in litigation of the same firm can either participate in the prosecution or litigation but not both.  This makes them "competitive decisionmakers" under the precedent of the U.S. Court of Appeals for the Federal Circuit which reviews patent cases.

According to Court documents, M.A. Mobile Ltd. and Mandana D. Farhang sued the Indian Institute of Technology in Kharagpur, India (IIT) for breach of contract and trade secret misappropriation.  The trade secrets relate to a method of exchanging data in mobile wireless devices without a need for a constant data connection.  The plaintiffs entered into a non-disclosure agreement with IIT, who then allegedly disclosed the information.  A motion to dismiss the complaint largely failed bringing the action into discovery.

In discovery, neither side wants to disclose its trade secrets more broadly than necessary and they filed for a protective order to that affect.  This is complicated because an attorney representing the plaintiffs is also working on a patent for the same technology.  IIT is concerned that if the attorney participates in the current litigation he will have  access to IIT trade secrets which he can then patent for the plaintiffs or design the plaintiff's patent around the IIT trade secrets.

The judge ruled that the attorney cannot have it both ways, if he wants to participate in the litigation because he is a subject matter expert, then that is fine.  However, if he wants to finish working on the patent, then he cannot participate in the litigation.

This is straightforward rendering of the Federal Circuit's rule in U.S. Steel Corp. v. United States, which states that attorneys who are involved in competitive decisions cannot participate in patent litigation because their knowledge of the opponent's trade secrets is likely to affect the business decisions of their client.

The court granted the motion for a protective order and denied the motion to dismiss.

The case is M.a. Mobile v. Indian Institute of Technology, Case No. 08-2658.

Motion for a protective order:

M.a. Mobile v. Indian Inst. of Tech. MPO
Motion to Dismiss:
M.a. Mobile v. Indian Inst. of Tech. MTS

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