Implant Trade Secrets Are Not Protectable Due to Disclosure in Patents

Written by: Ben K. Shiroma and Tyler S. Cox

INTERNATIONAL MEDICAL DEVICES, INC. v. CORNELL

Before Dyk, Reyna, and Taranto. Appeal from the United States District Court for the Central District of California

Summary: The Federal Circuit held under CUTSA that a purported trade secret is not protectable if it is generally known due to disclosure in a patent.

International Medical Devices (“IMD”) sued Dr. Robert Cornell for various causes of action related to cosmetic penile implants, including misappropriation of four trade secrets, breach of contract, counterfeiting; and to invalidate two of Cornell’s patents due to failure to name the correct inventors. At trial, the jury found Cornell liable on all claims. After the district court denied its JMOL motion, Cornell appealed.

The Federal Circuit reversed the district court’s denial of JMOL on the trade secret misappropriation claim. The court found that two trade secrets were generally known after being disclosed in patents, and that a third was generally known due to the combination of a patent and the general knowledge in the art. The Federal Circuit found that IMD disclosed its fourth trade secret without proper confidentiality labels. Thus, the Federal Circuit held that there was not substantial evidence that any of IMD’s trade secrets were protectible under California law. The Federal Circuit reversed the denial of JMOL on the breach of contract claim and patent invalidity claims for related reasons, but affirmed the denial of JMOL on the counterfeiting claim.

Editor: Sean Murray