Federal Circuit Provides Guidance on Trade Secrets Issues | Fenwick & West LLP
Every once in a while, the U.S. Court of Appeals for the Federal Circuit handles a trade secrets case. In a decision published Monday, the court reversed the grant of a preliminary injunction relating to insulin pump patches. I’ll mention just one takeaway that may be of help to companies in similar situations.
While trade secrets are sometimes characterized as poor cousins to patents, copyrights, and trademarks, the Defend Trade Secrets Act of 2016 (DTSA) has helped to bolster the importance of this type of intellectual property. Here, the Federal Circuit included the quote below from Thomas Jefferson to emphasize that not only Congress and the States in recent years, but the Founders as well, recognized the value of trade secrets.
Perhaps because of this value, the Federal Circuit expressed concern that guard rails against improper preliminary injunctions be considered. Specifically, there was a mismatch in language between what the DTSA defines as a trade secret and what the injunction covered, which the Federal Circuit characterized as “severely overbroad.” The trade secret owner relied on “a hazy grouping of information that the court did not probe with particularity to determine what, if anything, was deserving of trade secret protection.” The Federal Circuit took issue with simple reference to “design drawings and specifications” as being insufficient to determine what exactly might be a protectable secret, particularly since the trade secret owner also had patents that publicly disclosed at least some related information. The district court had dismissed those as irrelevant, saying, “this is not a patent case.” But disclosures in a patent may well bear on whether information is secret. Companies will do well to carefully consider how they frame their trade secrets in a dispute, since overbreadth may sometimes do more harm than good.
