Pursue a Patent, Lose a Trade Secret

On February 14, 2013, in Trade Secrets, by Brian A. Hall

UnIP (UnIntellectual Property): Trade Secret for Identification System

The United States District Court for the Eastern District of Pennsylvania has confirmed that the filing of a patent with the United States Patent and Trademark Office (USPTO) can result in one’s losing the ability to claim trade secret protection.  In this case, Plaintiff invented a system whereby, for a fee, entities would present personal identification documents to a local United States post office that would allow their identity to be verified.  Thereafter, they would receive a virtual post.  Plaintiff referred to the system as Virtual Post Office Box/Internet Passport powered by Global Registration and Verification (VPOBIP).

Plaintiff sent information about VPOBIP to the Post Regulatory Commission, and thereafter to Pitney Bowes.  Several communications followed, and in the meantime Plaintiff’s patent application was rejected.  Thereafter, Pitney Bowes launched a website, at volly.com, that Plaintiff believe was unlawful and asserted several causes of action.

The Court granted Defendants’ motion for judgement on the pleadings.  In doing so, the Court determined that Plaintiff did not own a trade secret.  The Court found that Plaintiff had failed to take reasonable steps to protect the secrecy of his claimed trade secret.  Ultimately, the Court concluded that “VPOBIP is not a trade secret because Plaintiff allowed the application to be made public when he applied for a patent.”

This result is logical.  It is a practical discussion intellectual property attorneys, like myself, regularly have with clients when determining how to protect certain kind of intellectual property.  Perhaps, this case can be used to tell the client that it can not have it both ways, or in other words, pursue a patent or keep it a secret.  The kind of invention, the speed of the market, and related factors can help dictate which to pursue.

Foster v. Pitney Bowes Corp., 2013 WL 487196 (E.D. Pa. Feb. 8, 2013).


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