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Disclosure in Patents Prevents Misappropriation of Trade-Secret Claim

October 13, 2004

Decision icon Decision

Last Month at the Federal Circuit - November/December 2004

Judges: Bryson (author), Michel, and Archer

In On-Line Technologies, Inc. v. Bodenseewerk Perkin-Elmer GmbH, No. 04-1291 (Fed. Cir. Oct. 13, 2004), the Federal Circuit vacated a grant of SJ of noninfringement and remanded that issue. The Court also affirmed the grant of SJ with respect to several state-law claims and procedural issues.

On-Line Technologies, Inc. (“On-Line”) obtained U.S. Patent No. 5,440,143 (“the ‘143 patent”) directed to a method for increasing the length of a light path in a gas cell while correcting for astigmatism. Such devices are used in an infrared spectrometer to determine the composition
of gases. On-Line sued Bodenseewerk Perkin-Elmer GmbH and several related companies (collectively “Perkin-Elmer”) for patent infringement and several state-law claims, including misappropriation of trade secrets, violation of the state law of unfair competition, breach of contract, and fraud. On- Line alleged that pursuant to a Nondisclosure Agreement, it had revealed its gas-cell design to Perkin-Elmer scientists in anticipation of a possible business arrangement. Perkin-Elmer then allegedly copied what it had learned from On-Line. The district court granted SJ in favor of Perkin-Elmer on all of On-Line’s state-law claims and granted SJ of noninfringement.

On appeal, the infringement issue turned on the claim limitation that called for mirrors to have “substantially spherical concave reflective surfaces,” and “at least one of the objective surfaces having a cylindrical component added thereto.” Perkin- Elmer argued that its objective mirrors had toroidal surfaces and, therefore, did not infringe.

The patent specification describes the contour of the spherical objective mirrors as “approaching toroidal.” The district court reasoned that mirrors that “approach toroidal” cannot actually be toroidal. Thus, the district court construed the claims to exclude toroidal mirrored surfaces. The district court also concluded that because toroidal surfaces were disclosed but not claimed, the patentee was barred from applying the DOE. The Federal Circuit rejected the district court’s reasoning and concluded just the opposite. According to the Court, the specification makes clear that the claim language referring to spherical surfaces with cylindrical components does include toroidal surfaces.

Concerning the trade-secret claim, the evidence showed that Perkin-Elmer did not begin to incorporate the features of On-Line’s gas cell into its own product until after the ‘143 patent had issued. The Court noted that information contained in a patent or published materials does not qualify for protection as a trade secret. Also, other technology that Perkin-Elmer had used was disclosed in a thirdparty patent. Therefore, Perkin-Elmer did not misappropriate trade secrets.