Patent and Trade Secret Examination
Franklin Pierce Law Center
Intellectual Property Institute
This is an open book examination. You may bring in the casebook, a statutory supplement, your
notes and outlines, lucky objects, favorite pictures of relatives or other objects, which might be
patentable subject matter other than humans. The examination is two hours long. Please think
before you write as there are only two essays and you shouldn't be rushed. Note! I am interested
in your mastery of the subject matter of the course as a tool of analysis and counseling.
Encyclopedic knowledge is wonderful, but demonstration of the same' is not appreciated in the
grading of this examination. Good luck! I hope you enjoy the balance of this summer.
You are working as an examiner in group art unit number 13 of the United States Patent and
Trademark Office and have been given responsibility for a reexamination request made by Elmer
Smith of Barnstable, Pennsylvania for U.S. Patent No. 5,122,321 (issued to Himoh and Grady and
assigned to the Dutch/American Bicycle Company, hereafter the '321 patent). The '321 patent is
directed to an improved bicycle gear mechanism and was filed July 3, 1994. The most broadly
claimed invention in the '321 patent is provided in claim I of the patent and comprises
a) a planetary gear carrier that is circular or elliptical in form
b) at least three gear carrying
channels radiating from the center of said planetary gear carrier; and
c) at least three toothed
chain engagement gears disposed each in said gear carrying channels.
The reexamination request is premised upon two basic arguments made by Smith and relies upon
three references. Smith argues that three references are critical and are as follows;
*U.S. Patent 5,019,000 issued December 3, 1994 to Himoh upon a U.S filing date of June 1, 1991.
'000 is assigned to the Dutch/American Bicycle Company.
*U.S. Patent 5,023,500 issued
November 8 1994 to Axel, filed November 3, 1993 and which claims a foreign priority of
November 15, 1992 based upon Axel's Belgian filing.
*Canadian patent No, 3,116,892 filed
October 2, 1990 and issued June 2. 1995 to Cletus Hubb.
The Office during the original action cited none of these references although the Himoh patent
(U.S. 5,019,000) was brought to the Office's attention. The Himoh patent is directed to a variable
drive belt system rather than a chain drive system. It also used only two belt carrying or
engagement mechanisms rather than three and does not include an elliptical carrier. The claims of
this patent are directed to a bicycle with a particular overall configuration, and the belt mechanism
is described but not claimed. In short Himoh '000 teaches a very similar device using a belt rather
than a chain.
The Axel patent is directed to a variable drive mechanism that has elements for a chain drive
system, but does not approach the problem in the same fashion as mechanism so the '321 patent.
It does describe and claim element c of the '321 patent.
Specifically, Smith argues that the '000 patent and the '500 patent when taken in combination
create a prima facie case of obviousness under 35 USC 103 (in that '000 teaches elements a and
b, and '500 teaches element c).
The Hubb patent describes but does not claim all aspects of the invention. Smith points out and
argues that Hubb's patent anticipates the claimed invention in each and every element, a, b, and c.
Please comment and whether the request is proper and what the' applicant could
show to overcome the rejections that might be entered.
Below is one of the figures from the patent subject to the reexamination request.
you shouldn't have to figure out this technology as the facts regarding teaching are stated
in the problem. Please be succinct and point out each of the alleged basis for
Running has been a simple diversion during graduate school at the University of Pennsylvania's
material science program, but as time dragged on this diversion became an obsession. What once
had been occasional 10-kilometer races, became an interest in triathlons. What had once been the
pleasure of participation became the need to get better and to win. So after the better part of a
lifetime, Runon Sentence (hereafter "RS") found himself designing special running shoes that could
be worn throughout all of the stages of a triathlon. Of course several challenges existed to success
in this endeavor, not he least of which was the fact that the shoes had the cruel tendency to fall
apart during last phases of the competition.
RS determined that the real problem was that the adhesive system used in commercial shoes was
a very narrow in the range of conditions that they were expected to work in. RS exhaustively
researched adhesive systems and binding technologies, but was unable to find anything off the
shelf that was likely to work. Unperturbed by the research failure, and still wanting a shoe that
might provide a competitive advantage, RS started selling a slightly improved shoe that would be
rebuilt in between competitions on June 1, 1995, The shoes were sufficiently durable to last a
whole competition, and were met with a certain amount of favor by triathletes. On May 25, 1996
RS filed a patent application on the shoe design itself
One of the advantages of the shoe was that it did not need to be changed and athletes that used it
could avoid unnecessary time in the changeover areas of the races. The shoes met with great
acceptance by the iron-person community (those that compete 'in triathlons) and RS was able to
get a great deal of feedback on shoe design and the durability and performance of the shoes.
In the past six months RS has learned that the shoes could perform better in the water if the front
portion of the shoes was modified from its previous form. RS has redesigned the shoe accordingly
and has found a significant advantage, not only in the swimming portion, but also, and very
surprisingly, in the bicycling portion of the triathlon. RS has also found out 13 months ago (June
1996) an improved method for assembling the shoes that involves a reactive laser induced
thermosetting process invented by RS himself The process itself is a breakthrough in high moisture
plastic bonding technology and makes the shoes more durable than commercially available sports
shoes. The only person to see this process, other than a select few of RS's employees under
contractual duties of confidence, is Professor Rollins, RS's boss in the actuarial department of
Nationwide Insurance company. Sadly mathematically gifted scientists often find jobs as analysts
at insurance companies and stock brokerage houses these days. RS showed the process to Rollins,
a onetime member of the physics department of U of Penn., in late June of 1996. Rollins
understood the process and commented about what a non-intuitive process it was over preexisting
What options are open to RS in protecting his inventions and innovations under U.S. patent law and
California trade secret law? First, list his potential invention assets and then assess the strengths of
any protection he might acquire or already possess.
Again, it is unimportant to understand this technology. So I have not shown you this
figure as some sort of twisted attempt to get you to write claims (do not write claims!),
but rather as some sort of amusement. Can you guess which faculty member's shoes these
are? Do you really need an answer?
DEERING'S CALIFORNIA CODES ANNOTATED
Copyright (c) 1996, by Bancroft-
a division of Thomson Information Services, Inc.
@ 3426. Citation of title
This title may be cited as the Uniform Trade Secrets Act.
As used in this title, unless the context requires otherwise:
(a) "Improper means" includes theft, bribery, misrepresentation, breach or inducement of a
breach of a duty to maintain secrecy, or espionage through electronic or other means. Reverse
engineering or independent derivation alone shall not be considered improper means.
(b) "Misappropriation" means:
(1) Acquisition of a trade secret of another by a person who knows or has reason to know
that the trade secret was acquired by improper means; or
(2) Disclosure or use of a trade secret of another without express or implied consent by a
(A) Used improper means to acquire knowledge of the trade secret; or
(B) At the time of disclosure or use, knew or had reason to know that his or her knowledge of
the trade secret was:
(i) Derived from or through a person who had utilized improper means to acquire it;
(ii) Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use;
(iii) Derived from or through a person who owed a duty to the person seeking relief to
maintain its secrecy or limit its use; or
(C) Before a material change of his or her position, knew or had reason to know that it was a
trade secret and that knowledge of it had been acquired by accident or mistake.
(c) "Person" means a natural person, corporation, business trust, estate, trust, partnership,
limited liability company, association, joint venture, government, governmental subdivision or
agency, or any other legal or commercial entity.
(d) "Trade secret" means information, including a formula, pattern, compilation, program,
device, method, technique, or process, that:
(1) Derives independent economic value, actual or potential, from not being
generally known to the public or to other persons who can obtain economic value from its
disclosure or use; and
(2) Is the subject of efforts that are reasonable under the circumstances to maintain its
@ 3426.2. Injunction against actual or threatened misappropriation
(a) Actual or threatened misappropriation may be enjoined. Upon application to the court,
an injunction shall be terminated when the trade secret has ceased to exist, but the
injunction may be continued for an additional period of time in order to eliminate
commercial advantage that otherwise would be derived from the misappropriation.
(b) If the court determines that it would be unreasonable to prohibit future use, an
injunction may condition future use upon payment of a reasonable royalty for no longer
than the period of time the use could have been prohibited.
(c) In appropriate circumstances, affirmative. acts to protect a trade secret may be
compelled by court order.
@ 3426.3. Damages
(a) A complainant may recover damages for the actual loss caused by misappropriation. A
complainant also may recover for the unjust enrichment caused by misappropriation that is
not taken into account in computing damages for actual loss.
(b) If neither damages nor unjust enrichment caused by misappropriation are provable, the
court may order payment of a reasonable royalty for no longer than the period of time the
use could have been prohibited.
(c) If willful and malicious misappropriation exists, the court may award exemplary
damages in an amount not exceeding twice any award made under subdivision (a) or (b).
@ 3426.4. Attorney fees
If a claim of misappropriation is made in bad faith, a motion to terminate an injunction is
made or resisted in bad faith, or willful and malicious misappropriation exists, the court
may award reasonable attorney's fees to the prevailing party.
@ 3426.5. Methods for preserving secrecy of trade secret
In an action under this title, a court shall preserve the secrecy of an alleged trade secret by
reasonable means, which may include granting protective orders in connection with
discovery proceedings, holding in-camera hearings, seating the records of the action, and
ordering any person involved in the litigation not to disclose an alleged trade secret without
prior court approval.
@ 3426.6. Limitation period; Accrual of cause of action
An action for misappropriation must be brought within three years after the
misappropriation is discovered or by the exercise of reasonable diligence should have been
discovered. For the purposes of this section, a continuing misappropriation constitutes a
@ 3426.7. Effect of title on other statutes or remedies
(a) Except as otherwise expressly provided, ' this title does not supersede
any statute relating to misappropriation of a trade secret, or any statute
otherwise regulating trade secrets.
(b) This title does not affect (1) contractual remedies, whether or not based upon
misappropriation of a trade secret, (2) other civil remedies that are not based upon
misappropriation of a trade secret, or (3) criminal remedies, whether or not based upon
misappropriation of a trade secret.
(c) This title does not affect the disclosure of a record by a state or local agency under the
California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division
7 of Title I of the Government Code). Any determination as to whether the disclosure of
a record under the California Public Records Act constitutes a misappropriation of a trade
secret and the rights and remedies with respect thereto shall be made pursuant to the law
in effect before the operative date of this title.
@ 3426.8. Statutory Construction
This title shall be applied and construed to effectuate its general purpose to make uniform
the law with respect to the subject of this title among states enacting it.
@ 3426.9. Severability
If any provision of this title or its application to any person or circumstances is held
invalid, the invalidity does not affect other provisions or applications of the title which
can be given effect without the invalid provision or application, and to this end the
provisions of this title are severable.
@3426.10. Application of title to acts occurring prior to statutory date; Continuing acts
This title does not apply to misappropriation occurring prior to January 1, 1985. If a
continuing misappropriation otherwise covered by this title began before January 1, 1985,
this title does not apply to the part of the misappropriation occurring before that date.
This title does apply to the part
of the misappropriation occurring on or after that date unless the appropriation was not a
misappropriation under the law in effect before the operative date of this title.
@ 3426.11. Applicability of official proceedings privilege to disclosure of trade secret
Notwithstanding subdivision (b) of Section 47, in any legislative or judicial proceeding, or
in any other official proceeding authorized by law, or in the initiation or course of any
other proceeding authorized by law and reviewable pursuant to Chapter 2 (commencing
with Section 1084) of Title I of Part 3 of the Code of Civil Procedure, the voluntary,
intentional disclosure of trade secret information, unauthorized by its owner, to a
competitor or potential competitor of the owner of the trade secret information or the agent
or representative of such a competitor or potential competitor is not privileged and is not a
privileged communication for purposes of Part 2 (commencing with Section 43) of Division
This section does not in any manner limit, restrict, impair, or otherwise modify either the
application of the other subdivisions of Section 47 to the conduct to which this section
applies or the court's authority to control, order, or permit access to evidence in any case
Nothing in this section shall be construed to limit, restrict, or otherwise impair, the
capacity of persons employed by public entities to report improper government activity,
as defined in Section 10542 of the Government Code, or the capacity of private persons to
report improper activities of a private business.
Addendum to the Examination
Reexamination is covered by 35 USC 301 et seq. Your role in the question is to ascertain the merits of the
request for reexamination. Do not be concerned about the reexamination process procedurally, but instead
focus on the 102 and 103 arguments made by Smith. I recognize we did not cover reexamination procedure
explicitly and I do not expect you to put your analysis in the form the examiner would be expected to deal