The Need for Confidentiality

Intro

Because the grant of a monopoly in a patent is in exchange for the disclosure of a previously secret invention, it is necessary to ensure that the invention is kept secret before filing for a patent.  Otherwise, there is nothing to give to the government in exchange for the grant of the monopoly.

As a general rule, the invention must be kept secret, in that no one (including the inventor) has disclosed the invention, before the “prior art date” of the patent application.  The quotation marks are used because there is no technical term for “prior art date”.  Rather, there are a bunch of dates that could factor in, based on the patent jurisdiction and the particular circumstances of each case.

Prior Art

As a general rule, the “prior art date” is no later than the date that the actual patent application is filed.  In some circumstances, an inventor can file for a patent in one jurisdiction based on the fact that a corresponding patent application was filed in a different jurisdiction (or the same jurisdiction for that matter) for the same or a similar invention less than 1 year previously (a process known as “claiming priority” from the previously filed application).  In this case, the “prior art date” will be the filing date of the priority patent application.  Note that all patent applications claiming priority from an earlier patent application must be filed within 1 year from the earliest priority application – there is no “daisy-chaining” of priority applications allowed.

Another exception to the general rule relates to self-disclosure in non-absolute novelty jurisdictions.  In such jurisdictions, such as Canada and the U.S. (but not Europe), if the invention is disclosed directly or indirectly by the inventor (for example in a paper or by offering for sale a product that discloses the invention), a grace period is established during which a patent application could be filed in such non-absolute novelty jurisdictions despite the earlier disclosure of the invention by the inventor.  The grace period in Canada and the U.S. is 1 year.

So what constitutes a disclosure that would count as prior art or would prevent you from obtaining a patent?   The test is if you disclose the invention to a person who is under no obligation to keep it confidential, there has been a disclosure.  Clearly, if you write about the invention in a paper or presentation or brochure, this would qualify.  But if you tell someone or show someone the invention, this may also constitute a disclosure.  Also, if you sell a product that incorporates the invention and someone could buy the product and test it or reverse engineer it to figure out the invention, the sale would constitute a disclosure.

Non-Disclosure Agreements

Non-disclosure agreements (NDAs) are contracts that you sign with a person to whom you are thinking about disclosing an invention.  It is important to understand what is happening when you enter into an NDA.  The protection from a patent perspective that you obtain from an NDA is two-fold.  First, in terms of your disclosure to the person signing the NDA, your disclosure would not constitute a disclosure of the invention because the NDA imposes a contractual liability on the other person to keep the invention confidential.  However, if, despite such obligation, the other person discloses the invention, such disclosure would be a disclosure of the invention that would likely not allow you to obtain a patent afterward.  Your only recourse in this case would be to sue the person for breach of contract for the value that you would have been able to realize from filing for, obtaining and profiting from a patent but for the improper disclosure by the other person.  This is the second type of protection that you obtain from an NDA.  But it may not be a practical type of protection, since you will have to sue, usually at considerable expense, you may not win in the end, or get the court to agree with the value that you place on the lost patent, and the other person may not have money to satisfy any judgment that you eventually obtain.  In many circumstances, it is better to simply keep the invention confidential rather than to rely on the lesser protection of an NDA and the conduct of the person signing the NDA.  However, in some cases, this is not practical.

In some cases, a court may infer an obligation to keep confidential, even if a formal document creating such obligation such as an NDA is not signed.  This may in some cases include the relationship between family members, or colleagues, or supplier and customer, but it is always better to formalize such obligation and best to simply keep the invention confidential.