The California Court of Appeal has held that disclosing a formula in a patent doesn’t destroy the formula’s trade secret status as long as the patent doesn’t disclose the process for how the trade secret is applied.
Global Protein Products is a coating company that claims as a trade secret formula and process for treating iceberg lettuce to prolong its shelf life.
Le, a scientist, was employed by Global and learned the formula for the product subject to a confidentiality agreement. Le left Global and started a competing company, trying to sell to Global’s customers.
Global sued Le for trade secret misappropriation, breach of contract, and unfair competition. The trial court granted a permanent injunction against Le’s activities using the secret.
Le appealed, claiming that because Global had acquired a pre-existing patent for the formula, the alleged “secret” was in the public domain.
The acquired patent was for “a process and formula for making a zein film in pure water.”
The court agreed that, in general, “publication of a trade secret destroys it.”
However, in this case the “trade secret was not limited to the identity of the components used; the trade secret encompassed the proprietary formula and the process for treating lettuce.” (Emphasis added.)
As the court noted, Global’s head scientist discovered that a particular organic acid, if used with the patented process and formula, could extend the shelf life of lettuce for seven days. Global never disclosed the identity of the organic acid, and didn’t patent the combination of the organic acid with the acquired patent. Instead, Global treated the organic acid, used in conjunction with the patent, as a trade secret.
One important thing to note about the case: the patent involved was issued in 1997 and has subsequently expired. Trade secrets, unlike patents, have no automatic expiration dates and can continue to protect proprietary information indefinitely.
Inventors often need to make strategic decisions about whether to protect their intellectual property using patents, trade secret law, or (as in this case) both.
The case is Global Protein Products, Inc. v. Le.
