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
