By Debby Winters
A change in prior use rights (“PUR”) would be a benefit to both trade secret and patent protection. By filing a patent application, unless a request for nonpublication accompanies the application, the invention will be published and therefore disclosed. Since the patent may never be granted, protection is not guaranteed. For PUR, there is no publication and thus definitive protection. In the long run, this may mean that the number of defensive patent filings may decrease in favor of reliance on PUR. This in turn would mean that inventors may not feel as obligated to file patents over things like minor changes in a process.
PUR would be especially important in protecting trade secrets in an industry such as the pharmaceutical industry, where the information to be protected is fragile by nature. In the internet age, secrecy that must be maintained is most threatened by data mobility and especially by employee mobility. Since the pharmaceutical industry has one of the highest rates of employee mobility, maintaining trade secrets under any circumstances is particularly difficult. Pharmaceutical firms also typically rely heavily on outside vendors, presenting even more of a chance for data disclosure.
One major drawback to PUR could be the potential disruption of the patent portfolio valuation processes. For starters, it is difficult to evaluate how PUR and trade secret protections will fit into company valuations. This is of particular importance to startups, where the company’s patent portfolio value can be a critical factor in an investor’s decision to pursue the company further. Also of concern for both large and small firms is that PUR will devaluate patents overall. In typically competitive markets, it will be uncertain whether potential infringers have secrets and therefore unknowable PUR, which would lead to the weakening of patent protection.
In terms of preference, larger pharmaceutical companies may choose patent protection due to the availability of injunctions, money damages, and other remedies. For smaller or startup companies, PUR do not appear to be a viable patent alternative at all, particularly due to the requirement of secret commercial use for more than one year to qualify for PUR. Many startups never intend to commercialize their product, as they are just looking to be acquired by a larger pharmaceutical company that they hope will eventually commercialize the product.
PUR usage may just prove to be technology dependent. For technology that moves quickly, PUR may be irrelevant, but PUR may be very important for technology that moves more slowly. Fortunately, if desired, inventors can delay making the decision on whether to rely on PUR or patent protection by using a “patent insurance” strategy. This strategy involves first filing a provisional patent application, followed by filing a non-provisional application with a non-publication request within 1 year. This can buy the inventor additional time to both establish the 1-year commercial use that is required to establish PUR, as well as more time to monitor published applications and evaluate what direction of protection to pursue. The patent could then be fully prosecuted, or should PUR prove to be the better option, the patent application could be abandoned without trade secret-destroying publication or disclosure.