IP Law Bulletin

Expectation of Confidentiality Critical

Existence of an expectation that disclosures remain confidential is an important consideration. Even in the absence of a legal agreement, it still may be relevant to determine whether any policies or practices associated with a particular group meeting would give rise to an expectation of confidentiality. For example, in Cordis Corp. v. Boston Scientific Corp., the court found that academic norms created an expectation to keep discussion and materials shared between six teachers and colleagues at a hospital confidential despite an express clause in the agreement between the parties stating confidentiality was not required. Additionally, the same court found no public disclosure occurred when the inventor shared research papers with two companies in an attempt to commercialize the technology because the papers were not accessible to the public and there was an expectation of confidentiality between the inventor and the two companies even where there was no express agreement.

The court in the recent Medtronic case placed much significance on the expectation of confidentiality. In Medtronic, there were at least three different meetings that occurred prior to the filing of the patent application during which a video and slides related to the invention were shown. One meeting was limited to a gathering of about 20 experts in the field of spinal deformity in which those in attendance were all members of the group that was meeting. The other two meetings were open to other surgeons as medical education courses sponsored by Medtronic, and approximately 20 surgeons attended one program and approximately 55 attended the other.

The Patent Trial and Appeal Board (PTAB) concluded that the videos and slides did not constitute prior art, finding that the information was not sufficiently accessible to the public by virtue of the three meetings. The court in Medtronic, however, vacated this decision because the court determined the Board did not fully consider all of the relevant factors, and more particularly did not apply all of the relevant analysis factors to each of the three separate meetings.

The court was particularly concerned about the two disclosures that occurred to surgeons in conjunction with the medical educations courses. There was no evidence that the materials distributed during those two meetings were restricted from further distribution and use by those in attendance, nor was there evidence of an expectation of confidentiality. The court wanted the PTAB to reconsider these disclosures separate and apart from the disclosure to the 20 experts in the field of spinal deformity.

The court seemed more willing to consider disclosures that occurred to the 20 experts in the field of spinal deformity as potentially confidential because of the limited attendance and the requirement that all attendees were members of this special expert group. However, on remand, the court wanted some attention paid to the expectation of confidentiality by those in attendance since there was no evidence in the record of whether disclosures were intended to remain confidential after the meeting was over. From the court’s perspective, it is the expectation of confidentiality that weighs as a significant factor when deciding whether disclosure in a meeting qualifies as a public disclosure for prior art purposes.

Efforts to Restrict Access Also Important

Along those lines, another important factor to consider is whether the materials were distributed without restriction, or whether the distributor made an effort to prohibit further dissemination of the materials such as by placing a notice on the materials or having the materials returned after the meeting. For example, the inventor in Cordis requested the companies maintain confidentiality of the documents distributed and the court found the documents not publicly accessible. By contrast, the court in Garrett Corp. v. United States found public disclosure where distribution of materials relating to the invention was made to a commercial entity and the inventor made no such efforts to limit further dissemination of the materials.

The court found public disclosure in Massachusetts Institute of Technology v. AB Fortia where a paper was orally presented to an audience of between 50 to 500 people having skill in the art and freely distributed without restriction to at least six members of the audience. Even where no physical materials were distributed, the court found public disclosure in In re Klopfenstein where a printed slide presentation was prominently displayed for three days at a heavily attended conference, without any request for confidentiality, such that the contents of the presentation could be easily reproduced and disseminated by attendees.

Thus, to the extent disclosures are going to be made public, efforts should be made to restrict access to keep it is as limited as possible. Outside of not making the disclosure at all, there is no failsafe protocol to employ that adequately restricts access to prevent a disclosure from being considered a public disclosure for prior art purposes. Still, the case law and factors analyzed by the courts provide some less restrictive options than “do not disclose” as a way to possibly prevent a disclosure during a meeting from becoming prior art.

It is clear that complete avoidance of any and all invention disclosures may not be necessary, and it may not always be wise. There may be times where it is important to discuss the invention with outside entities in order to further development or commercialize the product. The following takeaways may assist inventors in contemplating how to proceed:

• Though filing early may be safest, do so when you are ready given that no new matter can be added later. Based on the analysis above, not all discussions regarding the invention are fatal. Be mindful of the circumstances related to your potential disclosures.
• If a disclosure must be made, it is wise to utilize a confidentiality agreement. However, courts have not found a lack of a binding legal agreement to be strictly required. So long as there are expectations or a norm of confidentiality under the circumstances of the disclosure, the material may still be considered not publicly accessible. See which disclosure situation is most akin to your own as a guide, although executing a confidentiality agreement is preferred if possible.
• Along the same vein, when meeting with a third party, set restrictions on the materials, if any, that are distributed. Have materials returned promptly when the meeting concludes or make clear that the materials are not to be disseminated to others without explicit permission from the discloser.
• Consider who you are sharing the material with and limit the meeting to only those persons whose involvement is necessary.

While courts continue to grapple with the confines of what constitutes a public disclosure, what we do know is that absolute secrecy is not required. Confidentiality agreements should be used where possible, but where not possible, take appropriate measures that best align the disclosure with other instances where public disclosures were not deemed to have occurred because of the size, type, and knowledge of the audience, the length, and type of disclosure, and the restrictions explicitly placed on the disclosures to restrict availability to the relevant public as much as possible.