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Law School Case Brief

KEWANEE v. BICRON - 416 U.S. 470, 94 S. Ct. 1879 (1974)

Rule:

The subject of a trade secret must be secret, and must not be of public knowledge or of a general knowledge in the trade or business. This necessary element of secrecy is not lost, however, if the holder of the trade secret reveals the trade secret to another in confidence, and under an implied obligation not to use or disclose it. These others may include those of the holder's employees to whom it is necessary to confide it, in order to apply it to the uses for which it is intended. Often the recipient of confidential knowledge of the subject of a trade secret is a licensee of its holder.

Facts:

Petitioner was a leading manufacturer of a type of synthetic crystal, which was useful in the detection of ionizing radiation. Before termination with petitioner, respondents executed, as a condition of employment, at least one agreement each requiring them not to disclose confidential information or trade secrets obtained as employees of petitioner. The individual respondents later joined respondents corporation. Petitioner manufacturer appealed a decision from the United States Court of Appeals for the Sixth Circuit, finding Ohio's trade secret law, Ohio Rev. Code Ann. § 1333.51(E) (Supp. 1973) to be in conflict with the patent laws of the United States.

Issue:

Did federal patent law pre-empt state trade secret protection?

Answer:

No

Conclusion:

Reversing the appeals court determination of preemption by federal patent law, the United States Supreme Court held that federal patent law did not preempt Ohio state trade secret law. The two systems, the court explained, were not in conflict. They offered different degrees of protection to inventors and others. The Court noted that matter, once in the public domain, was not incompatible with the existence of trade secret protection. Trade secret law encouraged invention in areas where patent law did not reach. To preempt or do away with Ohio trade secret law would have deprived society of discoveries not protected by trade secret law.

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