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 | Sep 9, 2015 | IP Management
Southwest Energy Company recently found itself in the cross hairs of a trade secret dispute. It seems that a pair of geologists and an engineer created a detailed study of the drilling and fracing opportunities in East Texas. The team had identified 10 “sweet spots” for development and had begun leasing the targeted acreage so that a plan ready for drilling could be supplied to the highest bidder.
Apparently, Southwest Energy met with the trio and signed a confidentiality agreement. After reviewing the information and the proposal, Southwest declined to purchase the drill-ready plan. However, a year later, Southwest Energy purchased large amounts of acreage in and around the identified “sweet spots.” The geologists and engineer found this too coincidental and brought an action for theft of trade secrets.
A Texas court agreed with the trio and awarded a judgment of 40.2 million dollars. On appeal, the judgment was reduced to 11.4 million for lost profits. The case is currently pending before the Texas Supreme Court.
What’s the take away here? Regardless of your industry-protect your confidential information. It may be a supplier list, a pricing structure, or a manufacturing technique. Use the tools available to maintain these company secrets. Whether it is in the form of a confidentiality agreement, restricting physical access within your site, or conducting periodic training sessions to remind employees of the value of certain information, keep ahead of any potential leak. Once a trade secret has been disclosed, you cannot get it back.
Protecting proprietary information 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 | Jan 29, 2015 | Entrepreneurship, Patent Prosecution, Start Up Considerations, Trademark Service Mark
Intellectual property is the life blood of many small businesses and entrepreneurial enterprises. Knowing how and what may need protection could mean the difference between success and failure. I set forth below three basic things every entrepreneur and business person should do to protect the intellectual property inherent in any organization.
- Identify your intellectual property
- Before you can protect your intellectual property assets, you need to understand what they are. Intellectual property is a bundle of legal rights. These consist essentially of patents, trademarks, copyrights and trade secrets. Patents are directed primarily to objects of manufacture (things), methods of making or doing something, designs (ornamental aspects of a thing), compositions of matter and plants. If you make devices or compositions of matter, you will likely want to determine whether your device, composition, or methodologies associated with your business may be subject to patent protection. If you make an object, you may also want to consider whether there are any ornamental aspects of your object that may be new and subject to design patent protection.
- If you use trademarks, service marks or logos in connection with the sale of your goods or services, you may want to register those marks or logos nationally or internationally. If your business involves training or educational services, any materials used may be subject to copyright protection. If your business has been successful by using particular strategies or processes that have given it a competitive edge over your competition, you may want to properly identify those strategies as trade secrets. Some methodologies used in manufacturing may be better suited to trade secret protection rather than patent protection.
- Determine whether your intellectual property can be protected
- Once you have identified what you believe to be your intellectual property, you need to determine whether it is protectable under current laws. If you believe your new widget is patentable, a patentability search and assessment is a logical next step. A patentability search and assessment will provide you with the information you need to determine whether there is any meaningful patent protection available to you. This applies to objects, as well as methods, compositions of matter, and designs. A proper patentability search will search all relevant patent records and provide you with the most pertinent documentation of the state of the relevant art. A patent professional can assist with interpreting the search results to determine the scope of patent protection likely available to your invention.
- Similarly, with a trademark or logo, an availability search and assessment is a prudent next step. This involves searching relevant records to provide you with current uses of the same or similar marks or logos. From this information, you can determine whether to proceed with a trademark or service mark registration. A trademark professional can help you make that determination.
- Protect What Intellectual Property You Can
- Once you have identified and determined what rights are available to you, you can proceed with protecting your intellectual property to maximize your competitive advantage. Patentable aspects of any objects, methods, compositions or designs should be protected. Marks or logos available for use and registration should be the subject of US or international trademark or service mark applications.
- Copyrighted materials should be marked with the “©” or “Copyright” followed by the year(s) in which the material was created and name of the owner. Trade secrets, properly identified, should be protected through a series of procedures identified by your organization to ensure confidentiality. This may include, by example, limiting access to certain information, marking documents as “confidential”, ensuring all employees understand their obligations to maintain secrecy of proprietary information, executing confidentiality agreements with third parties where proprietary information may be exchanged.
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.
