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Can A Patent And Trade Secret Co-Exist?

Books, Articles, and presentations on Intellectual property even today speak about patent, trademark and copyright as discreet subjects and offer limited protection in terms of trade secrets. However doing so overlooks the fact that legal protection of an invention in any kind of need, especially in high tech, pharmaceuticals fields requires the need for more than one IPR category. This results in the coexistence of IPR rights for dual protection. Patent and trademarks are not mutually exclusive but mutually enforcing.

A Patent gives the owner an exclusive right to protect the invention from people to use or modify the invention. Section 2(1) (m) defines a patent as "means a patent for any invention granted under this Act”.[1]

A Trade secret is a right given under IPR to any confidential information or process which may be sold or licensed and increases the value of a company in the commercial market.

In the midst of Covid-19 Delhi High Court gave an important Judgment on the interplay between a Trade secret and Patent with the potential for reaching consequences. A single judge in the case of - Prof. Dr. Cluadio De Simone & Anr. v. Actial Farmaceutica SRL & Ors[2] held that the same innovation cannot enjoy both trade secrets and patent protection.

Brief about the case
Plaintiff owns a US patent over a formulation; the De Simone formulation which is useful for dietary and pharmaceutical indication expired in 2015 and does not have a corresponding Indian Patent. Plaintiff claims that strain selection and blending ratio of the formulation were kept as trade secrets. For marketing in India Plaintiff no. 1 entered into a license agreement with Defendant No. 3 as know how agreement, so that manufacturing can continue after the expiration of US patent and the agreements were terminated when defendants used cheap products for manufacturing.

Eventually knowing the effective consideration for the drug Defendant made a counterfeit product of the drug but they were unable to copy equivalent to De Simone formulation as they were not able to find the same bacteria. Defendant published that the formulation is same as De Simone formulation. The plaintiff sought an injunction to restrain the defendants from using their formula.

In this issues the question that came into matter that whether a non patented product can get property rights only by getting into a know how agreement with a third party claiming confidentiality. The court answered the question negatively and observed that know how without patent being applied to them was in public domain, the trade secrets and confidential information are not equated to property in India. The plaintiff does not have any patent and the patent of US has been expired and no subsisting patent has been applied in India, the innovation noted above is in the Public domain and providing the protection under trade secret would be in contrast to the scheme of the Patent Act.

In my opinion, the decision was interesting in preview of double protection being given to pharmaceuticals companies in relation to patent and trademark but the court overlooks the fundamental aspect of trade secrets. Looking at patent and trademark it generally overlaps to a certain extent as different aspects require different protection. If any invention has already been patented then that disclosed information cannot be protected as trade secret/ confidential information. This analysis would be different if the plaintiff’s claim for protection over information is not covered under the patent.

However different aspects of information are protected in different ways those which are immediately available can be protected under patent but the invention which is harder to reverse engineer or with respect to the protection under the patent is weaker can be protected under trade secret. In the case of Wyeth V. Natural Biologics Inc.[3] Wyeth protected its method of manufacturing a drug as a trade secret even though the patent was expired.

The court did not delve into know how which might not be covered under patent thereon is troubling and in my view it’s incorrect. There are numerous decisions where know how has been protected where no patent has been applied. The landmark judgment in the case of Seager v. Copydex[4], where the copier applied for the patent based on confidential information. The plaintiff successfully brought the suit based on misuse of confidential information even though the information was allegedly patentable. The court could have examined the patent and determine whether the information in question was disclosed by the patent or not.

End-Notes:
  1. https://ipindia.gov.in/writereaddata/Portal/ev/sections/ps2.html
  2. https://indiankanoon.org/doc/52129591/
  3. https://caselaw.findlaw.com/us-8th-circuit/1181315.html
  4. https://www.lawyerservices.in/Seager-VERSUS-Copydex-Limited-1967-04-18

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