by Kathleen Lynch | Jun 3, 2026 | Entrepreneur, Entrepreneurship, Infringement, Innovation, Intellectual Property, Invention, IP, IP Management, Licensing, Litigation, Patent, Protection, Small Business, Start Up, Start Up Considerations, Uncategorized
Can you license your technology to another company and accidentally lose your right to sue copycats? According to a recent decision by the Federal Circuit Court of Appeals (CAFC), the answer depends entirely on how carefully you draft your contract.
In ALM Holding Company & Ergon Asphalt & Emulsions, Inc. v. Zydex Industries, the CAFC reversed a district court’s dismissal of a patent infringement suit, delivering a crucial reminder to businesses about the fine print of intellectual property licensing.
The Case: A Question of Standing
The plaintiffs brought a patent infringement lawsuit against Zydex, but the district court threw the case out before it could even begin. Why? The court determined that the plaintiffs lacked constitutional standing to sue.
The district court reasoned that because the plaintiffs had granted an exclusive license for the subject patents to a third party, they no longer suffered a direct “injury-in-fact” from infringement. Even though the plaintiffs had retained certain rights, the lower court believed they had signed away too much control to seek legal redress.
However, the plaintiffs had been careful to retain three specific powers in their licensing agreement:
- The right to sue for infringement.
- The right to approve all sublicenses.
- The right to approve any assignment of rights by the licensee.
The CAFC Decision: Keeping a “Non-Illusory” Interest
The CAFC reversed the dismissal and sent the case back to the district court.
The appellate court found that because the plaintiffs had retained the right to sue and control sublicenses, they kept a sufficient exclusionary interest in the patents. In short: they retained enough skin in the game to maintain standing for an infringement action.
The Takeaway for Businesses
A patent owner’s core power is the right to exclude others from making, using, selling, or offering to sell their invention. When entering into exclusive license agreements, licensors must be incredibly strategic. If you do not carefully retain specific enforcement and approval rights, you risk accidentally stripping your business of the legal standing required to defend your own technology.
Guard Your Innovations with Expert Counsel
Capitalizing on innovative developments is critical to your organization’s growth—but protecting those assets requires foresight.
The Law Office of Kathleen Lynch PLLC is designed to help businesses like yours stay ahead of the game and navigate complex IP landscapes. Don’t leave your licensing agreements to chance.
- Ready to protect your IP? Your first consultation is entirely free.
- Get in touch: Email us today at kl****@*****aw.com to schedule your strategy session.
by Kathleen Lynch | Apr 28, 2026 | Confidentiality, Entrepreneur, Entrepreneurship, Intellectual Property, IP, IP Management, Trade Secrets
Recently, the U.S. Court of Appeals for the Federal Circuit issued a significant reversal of a California district court’s finding of trade secret misappropriation. In the case of International Medical Devices, Inc. (IMD) v. Cornell (April 2026), the court ruled that no reasonable jury could have found several alleged trade secrets to be, in fact, “secrets.”
The Dispute: Cosmetic Penile Implants
The litigation centered on the Penuma® cosmetic penile implant. The plaintiffs alleged that four specific elements of their technology were stolen trade secrets:
- Structural Pockets: Internal voids within the implant to enhance softness and elasticity.
- Mesh Tabs: Components around the distal tip to facilitate tissue ingrowth.
- Absorbable Sutures: Used in combination with mesh tabs to hold the implant during initial healing.
- The “Supply List”: A specific list of materials and instruments used to perform the surgical implantation.
The “Death” of a Trade Secret: Public Disclosure
The Federal Circuit held that the first three alleged secrets (the structural design elements) were ineligible for protection because they had already been disclosed in prior patents.
Citing the precedent in Atl. Rsch. Mktg. Sys., Inc. v. Troy, 659 F.3d 1345, the court reaffirmed a fundamental rule of intellectual property:
“A trade secret is secret, a patent is not. That which is disclosed in a patent cannot be a trade secret.”
Because these design concepts appeared in public patent filings—some dating back decades—they were part of the public domain. You cannot claim “secrecy” over information that the government has already published for the world to see.
The Failure of Internal Protection
The fourth alleged trade secret—the list of surgical instruments—failed for a different reason: lack of reasonable efforts to maintain secrecy.
The plaintiffs had emailed this list to the defendant without any:
- Confidentiality caveats
- “Trade Secret” labels
- Explicit instructions on restricted handling
Under the California Uniform Trade Secrets Act (CUTSA), information only qualifies as a trade secret if the owner takes active, reasonable steps to keep it secret. Because the plaintiffs treated the list as ordinary correspondence in the past, they could not retroactively claim it was a protected secret during litigation.
The Takeaway: How to Protect Your Innovation
This case serves as a vital reminder for tech and medical device companies: If you have a trade secret, keep it that way.
- Audit Your Patents: Ensure you aren’t trying to protect information as a “secret” if it’s already described in your (or someone else’s) patent filings.
- Use NDAs Every Time: Never disclose sensitive information to an outside individual or organization without a signed Non-Disclosure Agreement (NDA).
- Label Everything: Mark confidential documents clearly as “Trade Secret”, “Proprietary” or “Confidential.”
- Need-to-Know Access: Limit employee access to sensitive data and provide regular training on internal security protocols.
Protect Your Innovation
Protecting your intellectual property is critical to the survival of any organization. In an evolving legal landscape, having the right counsel to navigate these decisions is more important than ever.
The Law Office of Kathleen Lynch PLLC is designed to help your business stay ahead of the game.
Your first consultation is free. Email us: kl****@*****aw.com
by Kathleen Lynch | May 27, 2016 | Innovation, IP Management, Start Up Considerations
Earlier this year, I wrote about the federal Defense of Trade Secrets Act passed by the senate. This month, President Obama signed the act into law. The law (“DTSA”) creates a federal cause of action for theft of trade secrets. This means that the owner of a trade secret that has been stolen or disclosed can sue in federal court.
There is a whistleblower provision that grants immunity from a theft of trade secret claim to anyone who makes a disclosure in confidence to either (1) a federal, state, or local government official, or (2) an attorney, as long as the reason for disclosure is for the sole purpose of reporting or investigating a violation of the law.
The whistleblower provision requires employers to provide notice to all employees. Failure to do so will void an employer’s ability to take advantage of the DTSA’s provisions regarding exemplary damage awards (up to twice the damage award) and attorneys’ fees in cases of willful violations.
What’s the take away here? It is in every employer’s best interest to include the new notification in any employee agreement relating to trade secrets, confidentiality and/or nondisclosure obligations. This would include
- Non-compete agreements
- Consulting agreements
- Employment agreements
- Separation agreements
- Retention agreements, and
- Independent contractor agreements.
It would be wise to also include a notice in any employee handbook or new employee orientation materials.
Protecting your innovative developments is critical to any organization. Having the right person to help you make those decisions is important. The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game. The first telephone consultation is free. Email us at kl****@*****aw.com.
by Kathleen Lynch | Apr 19, 2016 | IP Management, Start Up Considerations
I wrote earlier this year in my blog about a pending trade secret bill approved by the judiciary committee in the senate. Recently the senate passed the Defend Trade Secrets Act. The act essentially provides for a federal cause of action for trade secret cases. The bill is now in the house and is expected to pass. President Obama has shown his support for the bill.
While the federal law is pending, state trade secret laws are the only remedy currently available. Recently Epic Systems brought a trade secret case against Tate Group, an Indian company, for theft of trade secrets, computer fraud, breach of contract and unfair competition in the western district of Wisconsin (case 14-cv-748-wmc). The jury awarded Epic $240 million in compensatory damages and $700 million in punitive damages. The jury found Tata guilty of downloading documents from hospital software and providing those documents to one of its subsidiaries, Med Mantra. If Epic ends up collecting the award, it will be more than double Epic’s expected annual profits this year.
What’s the take away here? If you are the owner of trade secrets-protect them. Ensure that you have implemented systems and educated your people on best practices to keep your trade secrets confidential. If someone takes your trade secrets without authorization, go after them. Hopefully you will be able to do that in federal court in the near future. If you are working with companies that have trade secrets, make sure you abide by the terms of the confidentiality agreement and treat the trade secret information in the same manner as you would treat your own proprietary information.
Protecting your innovative developments is critical to any organization. Having the right person to help you make that decision is important. The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game. The first telephone consultation is free. Email us at kl****@*****aw.com.
by Kathleen Lynch | Feb 23, 2016 | IP Management, Patent Prosecution
In Transweb LLC v. 3M Innovative Properties Company & 3M Company, the Federal Circuit Court of Appeals affirmed the district court’s finding that 3M was liable for antitrust violations in that 3M was found to have obtained its patent through inequitable conduct and subsequently sought to enforce the patent. As a result of 3Ms behavior in both acquiring and enforcing the patent, the appellate court awarded treble attorneys’ fees which came to about $26 million.
The patents at issue focus on filter material used in respirators for construction workers etc. Transweb had developed a new filter material similar to the 3M subject patents. The Federal Circuit found the 3M patents were invalid based on evidence indicating that Transweb’s president distributed samples of their new filter material at a trade show more than a year before 3M filed patent applications covering their new filter material. The finding of inequitable conduct was confirmed because the evidence indicated 3M knew of Transweb’s prior distribution, and did not properly disclose it to the US Patent and Trademark Office as required.
The court then found that 3M’s enforcement of their patent against Transweb constituted an antitrust violation as an abuse of the legal process and awarded Transweb’s attorneys’ fees for defending against 3M’s lawsuit. In justifying the award, the court stated that the attorneys fees were appropriate because they flowed directly from “3M’s unlawful act [of] bringing suit based on a patent known to be fraudulently obtained.” In awarding treble attorneys’ fees, the court indicated that the enhanced award was justified because the suit brought by 3M forced Transweb to either cease competition in the market or expend money to defend itself.
What’s the take away here? When preparing and prosecuting a patent application, ensure that your organization meets all requirements with regarding to disclosure to the US Patent Office. This requires diligence and educating all involved in the process. Sometimes that can include sales, marketing, and business development personnel as well as R&D and manufacturing.
Protecting your innovative developments is critical to any organization. Having the right person to help you make that decision is important. The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game. The first telephone consultation is free. Email us at kl****@*****aw.com.
by Kathleen Lynch | Dec 2, 2015 | Innovation, IP Management
For years now western countries have been complaining about the lack of enforcement of intellectual property laws in China. Well, that may be changing if this recent case is any indicator. A Chinese company has recently sued Apple for patent infringement on a number of different patents it has amassed in its patent portfolio.
Chinese company BYD has sued Apple and five other companies in the Shenzhen Intermediate People’s Court for patent infringement related to the antennae in the iPhone 6 as well as other technology. BYD has asked the court to order Apple to stop manufacture and assembly of the iPhones as a result of the alleged infringement.
BYD has stated that it owns over 12,000 patents in China and roughly 8000 internationally. This infringement suit against Apple could be critical to Apple’s ability to manufacture phones and other Apple products in China. China is where a significant majority of Apple products are made. This action may seriously hamper Apple’s manufacturing and supply chain and may force it to diversify its manufacturing and assembly sites worldwide.
What’s the take away here? BYD has managed to create a significant patent portfolio and is positioned itself to challenge Apple. Any intellectual property portfolio must be managed in a strategic way so as to meet the business goals of the organization.
Protecting your innovative developments is critical to any organization. Having the right person to help you make that decision is important. The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game. The first telephone consultation is free. Email us at kl****@*****aw.com.
