Great Atlantic Pacific & Tea Co. v. Supermarket Equipment Corp.

U.S. Supreme Court A. & P. Tea Co. v. Supermarket
Corp., 340
U.S. 147 (1950) Great Atlantic & Pacific Tea Co.
v. Supermarket Equipment Corp. No. 32 Argued October 18-19,
1950 Decided December 4,
1950 340
U.S. 147 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SIXTH
CIRCUIT Syllabus Claims 4, 5 and 6 of the Turnham patent No. 2,242,408, for a
cashier's counter and movable frame for "cash and carry" grocery
stores, held invalid for want of invention. Pp. 340 U. S.
148 -154.

															(a) The extension of the counter alone was not sufficient to
sustain the patent, unless, together with the other old elements,
it made up a new combination patentable as such. Pp. 340 U. S.
149 -150.

															(b) The mere combination of a number of old parts or elements
which, in combination, perform or produce no new or different
function or operation than that theretofore performed or produced
by them, is not patentable invention. P. 340 U. S.
151 .

															(c) This patentee has added nothing to the total stock of
knowledge, but has merely brought together segments of prior art
and claims them in congregation as a monopoly. P. 340 U. S.
153 .

															(d) Commercial success, without invention, does not make
patentability. P. 340 U. S.
153 .

															(e) The concurrence of the two courts below in holding the
patent claims valid does not preclude this Court from overruling
them where, as in this case, a standard of invention appears to
have been used that is less exacting than that required where a
combination is made up entirely of old components. Pp. 340 U. S.
153 -154.

															179 F.2d 636 reversed.

															The District Court sustained the validity of certain patent
claims. 78 F. Supp.
388 . The Court of Appeals affirmed. 179 F.2d 636. This Court
granted certiorari. 339 U.S. 947. Reversed, p. 340 U. S.
154 . Page 340 U. S. 148 MR. JUSTICE JACKSON delivered the opinion of the Court.

															Two courts below have concurred in holding three patent claims
to be valid, [ Footnote 1 ] and
it is stipulated that, if valid, they have been infringed. The
issue for the resolution of which we granted certiorari [ Footnote 2 ] is whether they applied
correct criteria of invention. We hold that they have not, and
that, by standards appropriate for a combination patent, these
claims are invalid. Page 340 U. S. 149 Stated without artifice, the claims assert invention of a
cashier's counter equipped with a three-sided frame, or rack, with
no top or bottom, which, which pushed or pulled, will move
groceries deposited within it by a customer to the checking clerk
and leave them there when it is pushed back to repeat the
operation. It is kept on the counter by guides. That the resultant
device works as claimed, speeds the customer on his way, reduces
checking costs for the merchant, has been widely adopted and
successfully used, appear beyond dispute.

															The District Court explicitly found that each element in this
device was known to prior art. "However," it found,

															"the conception of a counter with an extension to receive a
bottomless self-unloading tray with which to push the contents of
the tray in front of the cashier was a decidedly novel feature, and
constitutes a new and useful combination. [ Footnote 3 ]"

															The Court of Appeals regarded this finding of invention as one
of fact, sustained by substantial evidence, and affirmed it as not
clearly erroneous. It identified no other new or different element
to constitute invention, and overcame its doubts by consideration
of the need for some such device and evidence of commercial success
of this one.

															Since the courts below perceived invention only in an extension
of the counter, we must first determine whether they were right in
so doing. We think not. In the first place, the extension is not
mentioned in the claims, except, perhaps, by a construction too
strained to be consistent with the clarity required by claims which
define the boundaries of a patent monopoly. 38 Stat. 958, 35 U.S.C.
§ 33; United Carbon Co. v. Binney & Smith Co., 317 U. S. 228 ; General Electric Co. v.
Wabash Appliance Corp. , 304 Page 340 U. S. 150 U.S. 364. In the second place, were we to treat the extension as
adequately disclosed, it would not amount to an invention. We need
not go so far as to say that invention never can reside in mere
change of dimensions of an old device, but certainly it cannot be
found in mere elongation of a merchant's counter -- a contrivance
which, time out of mind, has been of whatever length suited the
merchant's needs. In the third place, if the extension itself were
conceded to be a patentable improvement of the counter, and the
claims were construed to include it, the patent would nevertheless
be invalid for overclaiming the invention by including old
elements, unless, together with its other old elements, the
extension made up a new combination patentable as such. Bassick
Mfg. Co. v. R. M. Hollingshead Co., 298 U.
S. 415 , 298 U. S. 425 ; Carbice Corp. of America v. American Patents Development
Corp., 283 U. S. 27 . Thus,
disallowing the only thing designated by the two courts as an
invention, the question is whether the combination can survive on
any other basis. What indicia of invention should the courts seek
in a case where nothing tangible is new, and invention, if it
exists at all, is only in bringing old elements together?

															While this Court has sustained combination patents, [ Footnote 4 ] it never has ventured to
give a precise and comprehensive definition of the test to be
applied in such cases. The voluminous literature which the subject
has excited discloses no such test. [ Footnote 5 ] It is agreed that the key to patentability Page 340 U. S. 151 of a mechanical device that brings old factors into cooperation
is presence or lack of invention. In course of time, the profession
came to employ the term "combination" to imply its presence, and
the term "aggregation" to signify its absence, thus making antonyms
in legal art of words which, in ordinary speech, are more nearly
synonyms. However useful as words of art to denote in short form
that an assembly of units has failed or has met the examination for
invention, their employment as tests to determine invention results
in nothing but confusion. The concept of invention is inherently
elusive when applied to combination of old elements. This, together
with the imprecision of our language, have counseled courts and
text writers to be cautious in affirmative definitions or rules on
the subject. [ Footnote 6 ]

															The negative rule accrued from many litigations was condensed
about as precisely as the subject permits in Lincoln
Engineering Co. of Illinois v. Stewart-Warner Corp., 303 U. S. 545 , 303 U. S.
549 :

															"The mere aggregation of a number of old parts or elements
which, in the aggregation, perform or produce no new or different
function or operation than that theretofore performed or produced
by them is not patentable invention."

															To the same end is Toledo Page 340 U. S. 152 Pressed Steel Co. v. Standard Parts, Inc., 307 U.
S. 350 , and Cuno Engineering Corp. v. Automatic
Devices Corp., 314 U. S. 84 . The
conjunction or concert of known elements must contribute something;
only when the whole in some way exceeds the sum of its parts is the
accumulation of old devices patentable. Elements may, of course,
especially in chemistry or electronics, take on some new quality or
function from being brought into concert, but this is not a usual
result of uniting elements old in mechanics. This case is wanting
in any unusual or surprising consequences from the unification of
the elements here concerned, and there is nothing to indicate that
the lower courts scrutinized the claims in the light of this rather
severe test.

															Neither court below has made any finding that old elements which
made up this device perform any additional or different function in
the combination than they perform out of it. This counter does what
a store counter always has done -- it supports merchandise at a
convenient height while the customer makes his purchases and the
merchant his sales. T he three-sided rack will draw or push goods
put within it from one place to another -- just what any such a
rack would do on any smooth surface -- and the guide rails keep it
from falling or sliding off from the counter, as guide rails have
ever done. Two and two have been added together, and still they
make only four.

															Courts should scrutinize combination patent claims with a care
proportioned to the difficulty and improbability of finding
invention in an assembly of old elements. The function of a patent
is to add to the sum of useful knowledge. Patents cannot be
sustained when, on the contrary, their effect is to subtract from
former resources freely available to skilled artisans. A patent for
a combination which only unites old elements with no change in
their respective functions, such as is presented here, obviously
withdraws what already is known into Page 340 U. S. 153 the field of its monopoly and diminishes the resources available
to skillful men. This patentee has added nothing to the total stock
of knowledge, but has merely brought together segments of prior art
and claims them in congregation as a monopoly.

															The Court of Appeals and the respondent both lean heavily on
evidence that this device filled a long-felt want and has enjoyed
commercial success. But commercial success, without invention, will
not make patentability. Toledo Pressed Steel Co. v. Standard
Parts, Inc., supra. The courts below concurred in finding that
every element here claimed (except extension of the counter) was
known to prior art. When, for the first time, those elements were
put to work for the supermarket type of stores, although each
performed the same mechanical function for them that it had been
known to perform, they produced results more striking, perhaps,
than in any previous utilization. To bring these devices together
and apply them to save the time of customer and checker was a good
idea, but scores of progressive ideas in business are not
patentable, and we conclude on the findings below that this one was
not.

															It is urged, however, that concurrence of two courts below, in
holding the patent claims valid, concludes this Court. A recent
restatement of the "two-court rule" reads,

															"A court of law, such as this Court is, rather than a court for
correction of errors in fact, finding, cannot undertake to review
concurrent findings of fact by two courts below in the absence of a
very obvious and exceptional showing of error." Graver Tank & Mfg. Co. v. Linde Air Products Co., 336 U. S. 271 , 336 U. S. 275 .
The questions of general importance considered here are not
contingent upon resolving conflicting testimony, for the facts are
little in dispute. We set aside no finding of fact as to invention,
for none has been made except as to the extension of the counter,
which Page 340 U. S. 154 cannot stand as a matter of law. The defect that we find in this
judgment is that a standard of invention appears to have been used
that is less exacting than that required where a combination is
made up entirely of old components. It is on this ground that the
judgment below is Reversed. [ Footnote 1 ]

															Claims 4, 5, and 6 of the Turnham patent No. 2,242,408, which
are involved in the controversy, read as follows:

															"4. A checker's stand including a counter of the character
described, an open bottom pusher frame thereon, means to guide said
frame in sliding movement so that goods placed on the end of said
counter within said frame may be pushed along the counter in a
group to a position adjacent the checker by movement of said
frame."

															"5. A cashier's counter for cash and carry type of grocery
comprising a portion spaced from the cashier's stand and upon which
the merchandise may be deposited and arranged, a bottomless three
sided frame on said portion and within which the merchandise is
deposited and arranged, means whereby said frame is movable on said
counter from said portion to a position adjacent the cashier's
stand so that the merchandise may thus be moved as a group to a
point where it may be conveniently observed, counted, and
registered by the cashier."

															"6. A cashier's counter for cash and carry type of grocery
comprising a portion spaced from the cashier's stand and upon which
the merchandise may be deposited and arranged, a bottomless frame
on said portion and within which the merchandise is deposited and
arranged, means whereby said frame is movable on said counter from
said portion to a position adjacent the cashier's stand so that the
merchandise may thus be moved as a group to a point where it may be
conveniently observed, counted, and registered by the cashier, said
frame being open at the end adjacent the cashier's stand and
readily movable to be returned over said portion so as to receive
the merchandise of another customer while the cashier is occupied
with the previous group."

															[ Footnote 2 ]

															339 U.S. 947.

															[ Footnote 3 ]

															Finding of Fact No. 15 of District Judge Picard, whose opinion
appears at 78 F. Supp.
388 .

															[ Footnote 4 ] E.g., Keystone Mfg. Co. v. Adams, 151 U.
S. 139 ; Diamond Rubber Co. of New York v.
Consolidated Rubber Tire Co., 220 U.
S. 428 .

															[ Footnote 5 ]

															The Index to Legal Periodicals reveals no less than sixty-four
articles relating to combination patents and the theory and
philosophy underlying the patent laws. Among the many texts are 1
Walker on Patents (Deller's ed.1937); Stedman, Patents; Toulmin,
Handbook of Patents; Merwin, Patentability of Inventions; Amdur,
Patent Law and Practice, and 1 Roberts, Patentability and Patent
Interpretation.

															[ Footnote 6 ]

															With respect to the word "invention," Mr. Justice Brown
said:

															"The truth is the word cannot be defined in such manner as to
afford any substantial aid in determining whether a particular
device involves an exercise of the inventive faculty or not. In a
given case, we may be able to say that there is present invention
of a very high order. In another, we can see that there is lacking
that impalpable something which distinguishes invention from simple
mechanical skill. Courts, adopting fixed principles as a guide,
have, by a process of exclusion, determined that certain variations
in old devices do or do not involve invention, but whether the
variation relied upon in a particular case is anything more than
ordinary mechanical skill is a question which cannot be answered by
applying the test of any general definition." McClain v. Ortmayer, 141 U. S. 419 , 141 U. S.
427 .

															MR. JUSTICE DOUGLAS, with whom MR. JUSTICE BLACK agrees,
concurring.

															It is worth emphasis that every patent case involving validity
presents a question which requires reference to a standard written
into the Constitution. Article I, § 8, contains a grant to the
Congress of the power to permit patents to be issued. But, unlike
most of the specific powers which Congress is given, that grant is
qualified. The Congress does not have free reign, for example, to
decide that patents should be easily or freely given. The Congress
acts under the restraint imposed by the statement of purpose in
Art. I, § 8. The purpose is "To promote the Progress of Science and
useful Arts." The means for achievement of that end is the grant
for a limited time to inventors of the exclusive right to their
inventions.

															Every patent is the grant of a privilege of exacting tolls from
the public. The Framers plainly did not want those monopolies
freely granted. The invention, to justify a patent, had to serve
the ends of science -- to push back the frontiers of chemistry,
physics, and the like; to make a distinctive contribution to
scientific knowledge. That is why, through the years, the opinions
of the Court commonly have taken "inventive genius" as the test. * It Page 340 U. S. 155 is not enough that an article is new and useful. The
Constitution never sanctioned the patenting of gadgets. Patents
serve a higher end -- the advancement of science. An invention need
not be as startling as an atomic bomb to be patentable. But is has
to be of such quality and distinction that masters of the
scientific field in which it falls will recognize it as an advance.
Mr. Justice Bradley stated in Atlantic Works v. Brady, 107 U. S. 192 , 107 U. S. 200 ,
the consequences of a looser standard:

															"It was never the object of those laws to grant a monopoly for
every trifling device, every shadow of a shade of an idea, which
would naturally and spontaneously occur to any skilled mechanic or
operator in the ordinary progress of manufactures. Such an
indiscriminate creation of exclusive privileges tends rather to
obstruct than to stimulate invention. It creates a class of
speculative schemers who make it their business to watch the
advancing wave of improvement, and gather its foam in the form of
patented monopolies which enable them to lay a heavy tax upon the
industry of the country without contributing anything to the real
advancement of the arts. It embarrasses the honest pursuit of
business with fears and apprehensions of concealed liens and
unknown liabilities to lawsuits and vexatious accountings for
profits made in good faith."

															The standard of patentability is a constitutional standard, and
the question of validity of a patent is a question of law. Mahn
v. Harwood, 112 U. S. 354 , 112 U. S. 358 .
The Court fashioned in Graver Tank & Mfg. Co. v.
Linde Air Products Co. , 336 U.S. Page 340 U. S. 156 271, 336 U. S. 275 ,
a rule for patent cases to the effect that this Court will not
disturb a finding of invention made by two lower courts in absence
of a very obvious and exceptional showing of error. That rule,
imported from other fields, never had a place in patent law. Having
served its purpose in Graver Tank & Mfg. Co. v. Linde Air
Products Co., it is now, in substance, rejected. The Court now
recognizes what has long been apparent in our cases: that it is the
"standard of invention" that controls. That is present in every
case where the validity of a patent is in issue. It is that
question which the Court must decide. No "finding of fact" can be a
substitute for it in any case. The question of invention goes back
to the constitutional standard in every case. We speak with final
authority on that constitutional issue, as we do on many
others.

															The attempts through the years to get a broader, looser
conception of patents than the Constitution contemplates have been
persistent. The Patent Office, like most administrative agencies,
has looked with favor on the opportunity which the exercise of
discretion affords to expand its own jurisdiction. And so it has
placed a host of gadgets under the armour of patents -- gadgets
that obviously have had no place in the constitutional scheme of
advancing scientific knowledge. A few that have reached this Court
show the pressure to extend monopoly to the simplest of
devices: Hotchkiss v.
Greenwood , 11 How. 248: doorknob made of clay,
rather than metal or wood, where different shaped door knobs had
previously been made of clay. Rubber-Tip Pencil Co. v.
Howard , 20 Wall. 498: rubber caps put on wood
pencils to serve as erasers. Union Paper Collar Co. v. Van
Dusen , 23 Wall. 530: making collars of parchment
paper where linen paper and linen had previously been used. Page 340 U. S. 157 Brown v. Piper, 91 U. S. 37 : a
method for preserving fish by freezing them in a container
operating in the same manner as an ice cream freezer. Reckendorfer v. Faber, 92 U. S.
347 : inserting a piece of rubber in a slot in the end of
a wood pencil to serve as an eraser. Dalton v. Jennings, 93 U. S. 271 : fine
thread placed across open squares in a regular hairnet to keep hair
in place more effectively. Double-Pointed Tack Co. v. Two Rivers Mfg. Co., 109 U. S. 117 :
putting a metal washer on a wire staple. Miller v. Foree, 116 U. S. 22 : a
stamp for impressing initials in the side of a plug of tobacco. Preston v. Manard, 116 U. S. 661 : a
hose reel of large diameter so that water may flow through hose
while it is wound on the reel. Hendy v. Golden State & Miners' Iron Works, 127 U. S. 370 :
putting rollers on a machine to make it moveable. St. Germain v. Brunswick, 135 U.
S. 227 : revolving cue rack. Shenfield v. Nashawannuck Mfg. Co., 137 U. S.
56 : using flat cord instead of round cord for the loop
at the end of suspenders. Florsheim v. Schilling, 137 U. S.
64 : putting elastic gussets in corsets. Cluett v. Claflin, 140 U. S. 180 : a
shirt bosom or dickie sewn onto the front of a shirt. Adams v. Bellaire Stamping Co., 141 U.
S. 539 : a lantern lid fastened to the lantern by a hinge
on one side and a catch on the other. Patent Clothing Co. v. Glover, 141 U.
S. 560 : bridging a strip of cloth across the fly of
pantaloons to reinforce them against tearing. Pope Mfg. Co. v. Gormully & Jeffery Mfg. Co., 144 U. S. 238 :
placing rubber hand grips on bicycle handlebars. Page 340 U. S. 158 Knapp v. Morss, 150 U. S. 221 :
applying the principle of the umbrella to a skirt form. Morgan Envelope Co. v. Albany Perforated Wrapping Paper
Co., 152 U. S. 425 : an
oval, rather than cylindrical toilet paper roll, to facilitate
tearing off strips. Dunham v. Dennison Mfg. Co., 154 U.
S. 103 : an envelope flap which could be fastened to the
envelope in such a fashion that the envelope could be opened
without tearing.

															The patent involved in the present case belongs to this list of
incredible patents which the Patent Office has spawned. The fact
that a patent as flimsy and as spurious as this one has to be
brought all the way to this Court to be declared invalid
dramatically illustrates how far our patent system frequently
departs from the constitutional standards which are supposed to
govern.

															* "Inventive genius" -- Mr. Justice Hunt in Reckendorfer v.
Faber, 92 U. S. 347 , 92 U. S. 357 ;
"Genius or invention" -- Mr. Chief Justice Fuller in Smith v.
Whitman Saddle Co., 148 U. S. 674 , 148 U. S. 681 ;
"Intuitive genius" -- Mr. Justice Brown in Potts v.
Creager, 155 U. S. 597 , 155 U. S. 607 ;
"Inventive genius" -- Mr. Justice Stone in Concrete Appliances
Co. v. Gomery, 269 U. S. 177 , 269 U. S. 185 ;
"Inventive genius" -- Mr. Justice Roberts in Mantle Lamp Co. of
America v. Aluminum Products Co., 301 U.
S. 544 , 301 U. S. 546 ; Cuno Engineering Corp. v. Automatic Devices Corp., 314 U. S. 84 , 314 U. S. 91 ,
"the flash of creative genius, not merely the skill of the
calling."


U.S. Supreme Court Sears, Roebuck & Co. v. Stiffel
Co., 376
U.S. 225 (1964) Sears, Roebuck & Co. v. Stiffel
Co. No. 108 Argued January 16,
1964 Decided March 9, 1964 376
U.S. 225 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SEVENTH
CIRCUIT Syllabus Respondent, whose design and mechanical patents are invalid for
want of invention, cannot, under a state unfair competition law,
obtain an injunction against copying its product or an award of
damages for such copying, as such use of state law conflicts with
the exclusive power of the Federal Government to grant patents only
to true inventions, and then only for a limited time. An unpatented
article, being in the public domain, may be freely copied, though
labeling or other precautions may be required by state law where
appropriate to prevent deception as to source. Pp. 376 U. S.
225 -233.

															313 F.2d 115, reversed.

															MR. JUSTICE BLACK delivered the opinion of the Court.

															The question in this case is whether a State's unfair
competition law can, consistently with the federal patent laws,
impose liability for or prohibit the copying of an article which is
protected by neither a federal patent nor a copyright. The
respondent, Stiffel Company, secured design and mechanical patents
on a "pole lamp" -- a vertical Page 376 U. S. 226 tube having lamp fixtures along the outside, the tube being made
so that it will stand upright between the floor and ceiling of a
room. Pole lamps proved a decided commercial success, and, soon
after Stiffel brought them on the market, Sears, Roebuck &
Company put on the market a substantially identical lamp, which it
sold more cheaply, Sears' retail price being about the same as
Stiffel's wholesale price. Stiffel then brought his action against
Sears in the United States District Court for the Northern District
of Illinois, claiming in its first count that, by copying its
design, Sears had infringed Stiffel's patents, and, in its second
count, that, by selling copies of Stiffel's lamp, Sears had caused
confusion in the trade as to the source of the lamps, and had
thereby engaged in unfair competition under Illinois law. There was
evidence that identifying tags were not attached to the Sears
lamps, although labels appeared on the cartons in which they were
delivered to customers, that customers had asked Stiffel whether
its lamps differed from Sears', and that, in two cases, customers
who had bought Stiffel lamps had complained to Stiffel on learning
that Sears was selling substantially identical lamps at a much
lower price.

															The District Court, after holding the patents, invalid for want
of invention, went on to find as a fact that Sears' lamp was "a
substantially exact copy" of Stiffel's, and that the two lamps were
so much alike, both in appearance and in functional details, "that
confusion between them is likely, and some confusion has already
occurred." On these findings, the court held Sears guilty of unfair
competition, enjoined Sears from "unfairly competing with [Stiffel]
by selling or attempting to sell pole lamps identical to or
confusingly similar to" Stiffel's lamp, and ordered an accounting
to fix profits and damages resulting from Sears' "unfair
competition." Page 376 U. S. 227 The Court of Appeals affirmed. [ Footnote 1 ] 313 F.2d 115. That court held that, to make
out a case of unfair competition under Illinois law, there was no
need to show that Sears had been "palming off" its lamps as Stiffel
lamps; Stiffel had only to prove that there was a "likelihood of
confusion as to the source of the products" -- that the two
articles were sufficiently identical that customers could not tell
who had made a particular one. Impressed by the "remarkable
sameness of appearance" of the lamps, the Court of Appeals upheld
the trial court's findings of likelihood of confusion and some
actual confusion, findings which the appellate court construed to
mean confusion "as to the source of the lamps." The Court of
Appeals thought this enough under Illinois law to sustain the trial
court's holding of unfair competition, and thus held Sears liable
under Illinois law for doing no more than copying and marketing an
unpatented article. [ Footnote
2 ] We granted certiorari to consider whether this Page 376 U. S. 228 use of a State's law of unfair competition is compatible with
the federal patent law. 374 U.S. 826.

															Before the Constitution was adopted, some States had granted
patents either by special act or by general statute, [ Footnote 3 ] but when the Constitution was
adopted, provision for a federal patent law was made one of the
enumerated powers of Congress because, as Madison put it in The
Federalist No. 43, the States "cannot separately make effectual
provision" for either patents or copyrights. [ Footnote 4 ] That constitutional provision is Art.
I, § 8, cl. 8, which empowers Congress

															"To promote the Progress of Science and useful Arts, by securing
for limited Times to Authors and Inventors the exclusive Right to
their respective Writings and Discoveries."

															Pursuant to this constitutional Page 376 U. S. 229 authority, Congress in 1790, enacted the first federal patent
and copyright law, 1 Stat. 109, and, ever since that time, has
fixed the condition upon which patents and copyrights shall be
granted, see 17 U.S.C. §§ 1-216; 35 U.S.C. §§ 1-293. These
laws, like other laws of the United States enacted pursuant to
constitutional authority, are the supreme law of the land. See
Sperry v. Florida, 373 U. S. 379 (1963). When state law touches upon the area of these federal
statutes, it is "familiar doctrine" that the federal policy "may
not be set at naught, or its benefits denied" by the state law. Sola Elec. Co. v. Jefferson Elec. Co., 317 U.
S. 173 , 317 U. S. 176 (1942). This is true, of course, even if the state law is enacted
in the exercise of otherwise undoubted state power.

															The grant of a patent is the grant of a statutory monopoly;
[ Footnote 5 ] indeed, the grant
of patents in England was an explicit exception to the statute of
James I prohibiting monopolies. [ Footnote 6 ] Patents are not given as favors, as was the
case of monopolies given by the Tudor monarchs, see The Case of
Monopolies (Darcy v. Allein), 11 Co.Rep. 84b, 77 Eng.Rep. 1260
(K.B.1602), but are meant to encourage invention by rewarding the
inventor with the right, limited to a term of years fixed by the
patent, to exclude others from the use of his invention. During
that period of time, no one may make use, or sell the patented Page 376 U. S. 230 product without the patentee's authority. 35 U.S.C. § 271. But,
in rewarding useful invention, the "rights and welfare of the
community must be fairly dealt with and effectually guarded." Kendall v.
Winsor , 21 How. 322, 62 U. S. 328 (1859). To that end, the prerequisites to obtaining a patent are
strictly observed, and, when the patent has issued, the limitations
on its exercise are equally strictly enforced. To begin with, a
genuine "invention" or "discovery" must be demonstrated, "lest, in
the constant demand for new appliances, the heavy hand of tribute
be laid on each slight technological advance in an art." Cuno
Engineering Corp. v. Automatic Devices Corp., 314 U. S.
84 , 314 U. S. 92 (1941); see Great Atlantic & Pacific Tea Co. v. Supermarket
Equipment Corp., 340 U. S. 147 , 340 U. S.
152 -153 (1950); Atlantic Works v. Brady, 107 U. S. 192 , 107 U. S.
199 -200 (1883). Once the patent issues, it is strictly
construed. United States v. Masonite Corp., 316 U.
S. 265 , 316 U. S. 280 (1942), it cannot be used to secure any monopoly beyond that
contained in the patent, Morton Salt Co. v. G. S. Suppiger
Co., 314 U. S. 488 , 314 U. S. 492 (1942), the patentee's control over the product when it leaves his
hands is sharply limited, see United States v. Univis Lens
Co., 316 U. S. 241 , 316 U. S.
250 -252 (1942), and the patent monopoly may not be used
in disregard of the antitrust laws, see International Business
Machines Corp. v. United States, 298 U.
S. 131 (1936); United Shoe Machinery Corp. v. United
States, 258 U. S. 451 , 258 U. S.
463 -464 (1922). Finally, and especially relevant here,
when the patent expires, the monopoly created by it expires, too,
and the right to make the article -- including the right to make it
in precisely the shape it carried when patented -- passes to the
public. Kellogg Co. v. National Biscuit Co., 305 U.
S. 111 , 305 U. S.
120 -122 (1938); Singer Mfg. Co. v. June Mfg.
Co., 163 U. S. 169 , 163 U. S. 185 (1896).

															Thus, the patent system is one in which uniform federal
standards are carefully used to promote invention Page 376 U. S. 231 while at the same time preserving free competition. [ Footnote 7 ] Obviously a State could
not, consistently with the Supremacy Clause of the Constitution,
[ Footnote 8 ] extend the life of
a patent beyond its expiration date or give a patent on an article
which lacked the level of invention required for federal patents.
To do either would run counter to the policy of Congress of
granting patents only to true inventions, and then only for a
limited time. Just as a State cannot encroach upon the federal
patent laws directly, it cannot, under some other law, such as that
forbidding unfair competition, give protection of a kind that
clashes with the objectives of the federal patent laws.

															In the present case, the "pole lamp" sold by Stiffel has been
held not to be entitled to the protection of either a mechanical or
a design patent. An unpatentable article, like an article on which
the patent has expired, is in the public domain, and may be made
and sold by whoever chooses to do so. What Sears did was to copy
Stiffel's design and to sell lamps almost identical to those sold
by Stiffel. This it had every right to do under the federal patent
laws. That Stiffel originated the pole lamp and made it popular is
immaterial.

															"Sharing in the goodwill of an article unprotected by patent or
trademark is the exercise of a right possessed by all -- and in the
free exercise of which the consuming public is deeply
interested." Kellogg Co. v. National Biscuit Co., supra, 305 U.S. at 305 U. S. 122 .
To allow a State by use of its law of unfair competition to prevent
the copying of an article which represents Page 376 U. S. 232 too slight an advance to be patented would be to permit the
State to block off from the public something which federal law has
said belongs to the public. The result would be that, while federal
law grants only 14 or 17 years' protection to genuine inventions, see 35 U.S.C. §§ 154, 173, States could allow perpetual
protection to articles too lacking in novelty to merit any patent
at all under federal constitutional standards. This would be too
great an encroachment on the federal patent system to be
tolerated.

															Sears has been held liable here for unfair competition because
of a finding of likelihood of confusion based only on the fact that
Sears' lamp was copied from Stiffel's unpatented lamp and that,
consequently, the two looked exactly alike. Of course, there could
be "confusion" as to who had manufactured these nearly identical
articles. But mere inability of the public to tell two identical
articles apart is not enough to support an injunction against
copying or an award of damages for copying that which the federal
patent laws permit to be copied. Doubtless a State may, in
appropriate circumstances, require that goods, whether patented or
unpatented, be labeled, or that other precautionary steps be taken
to prevent customers from being misled as to the source, just as it
may protect businesses in the use of their trademarks, labels, or
distinctive dress in the packaging of goods so as to prevent
others, by imitating such markings, from misleading purchasers as
to the source of the goods. [ Footnote 9 ] But because of the federal patent laws, a
State may not, when the article is unpatented and uncopyrighted,
prohibit the Page 376 U. S. 233 copying of the article itself or award damages for such copying. Cf. G. Ricordi & Co. v. Haendler, 194 F.2d 914, 916
(C.A.2d Cir. 1952). The judgment below did both, and, in so doing,
gave Stiffel the equivalent of a patent monopoly on its unpatented
lamp. That was error, and Sears is entitled to a judgment in its
favor. Reversed. [For concurring opinion of MR. JUSTICE HARLAN, see
post, p. 376 U. S.
239 .]

															[ Footnote 1 ]

															No review is sought here of the ruling affirming the District
Court's holding that the patent is invalid.

															[ Footnote 2 ]

															313 F.2d at 118 and nn. 6, 7. At least one Illinois case has
held in an exhaustive opinion that unfair competition under the law
of Illinois is not proved unless the defendant is shown to have
"palmed off" the article which he sells as that of another seller;
the court there said that

															"[t]he courts in this State do not treat the 'palming off'
doctrine as merely the designation of a typical class of cases of
unfair competition, but they announce it as the rule of law itself
-- the test by which it is determined whether a given state of
facts constitutes unfair competition as a matter of law. . . . The
'palming off' rule is expressed in a positive, concrete form which
will not admit of 'broadening' or 'widening' by any proper judicial
process." Stevens-Davis Co. v. Mather & Co., 230 Ill.App. 45,
65-66 (1923). In spite of this, the Court of Appeals, in its
opinions both in this case and in Day-Brite Lighting, Inc. v.
Compco Corp., 311 F.2d 26, rev'd post, p. 376 U. S. 234 ,
relied upon one of its previous decisions in a tradename case, Independent Nail & Packing Co. v. Stronghold Screw
Products, 205 F.2d 921 (C.A.7th Cir. 1953), which concluded
that, as to use of tradenames, the Stevens-Davis rule had
been overruled by two subsequent Illinois decisions. Those two
cases, however, discussed only misleading use of trade names, not
copying of articles of trade. One prohibited the use of a name so
similar to that of another seller as to deceive or confuse
customers, even though the defendant company did not sell the same
products as the plaintiff and so, in one sense, could not be said
to have palmed off its goods as those of a competitor, since the
plaintiff was not a competitor. Lady Esther, Ltd., v. Lady
Esther Corset Shoppe, Inc., 317 Ill.App. 451, 46 N.E.2d 165
(1943). The other Illinois case on which the Court of Appeals
relied was a mandamus action which held that, under an Illinois
statute, a corporation was properly denied registration in the
State when its name was "deceptively similar" to that of a
corporation already registered. Investors Syndicate of America,
Inc., v. Hughes, 378 Ill. 413, 38 N.E.2d 754 (1941). The Court
of Appeals, by holding that, because Illinois forbids misleading
use of tradenames, it also forbids as unfair competition the mere
copying of an article of trade without any palming off, thus
appears to have extended greatly the scope of the Illinois law of
unfair competition beyond the limits indicated in the Illinois
cases and beyond any previous decisions of the Seventh Circuit
itself. Because of our disposition of these cases, we need not
decide whether it was correct in doing so.

															[ Footnote 3 ] See I Walker, Patents (Deller ed. 1937), § 7.

															[ Footnote 4 ]

															The Federalist (Cooke ed. 1961) 288.

															[ Footnote 5 ]

															Patent rights exist only by virtue of statute. Wheaton v.
Peters , 8 Pet. 591, 33 U. S. 658 (1834).

															[ Footnote 6 ]

															The Statute of Monopolies, 21 Jac. I, c. 3 (1623), declared all
monopolies "contrary to the Laws of this Realm" and "utterly void
and of none Effect." Section VI, however, excepted patents of 14
years to "the true and first Inventor and Inventors" of "new
Manufacturers" so long as they were

															"not contrary to the Law, nor mischievous to the State, by
raising Prices of Commodities at home, or Hurt of Trade, or
generally inconvenient. . . ."

															Much American patent law derives from English patent law. See Pennock v.
Dialogue , 2 Pet. 1, 27 U. S. 18 (1829).

															[ Footnote 7 ]

															The purpose of Congress to have national uniformity in patent
and copyright laws can be inferred from such statutes as that which
vests exclusive jurisdiction to hear patent and copyright cases in
federal courts, 28 U.S.C. § 1338(a), and that section of the
Copyright Act which expressly saves state protection of unpublished
writings, but does not include published writings, 17 U.S.C. §
2.

															[ Footnote 8 ]

															U.S.Const., Art. VI.

															[ Footnote 9 ]

															It seems apparent that Illinois has not seen fit to impose
liability on sellers who do not label their goods. Neither the
discussions in the opinions below nor the briefs before us cite any
Illinois statute or decision requiring labeling.


U.S. Supreme Court Kewanee Oil Co. v. Bicron Corp., 416
U.S. 470 (1974) Kewanee Oil Co. v. Bicron
Corp. No. 73-187 Argued January 9,
1974 Decided May 13, 1974 416
U.S. 470 CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SIXTH
CIRCUIT Syllabus Harshaw Chemical Co., an unincorporated division of petitioner,
over a period of years, developed certain processes in the growth
and encapsulation of synthetic crystals and purification of raw
materials, some of which processes were considered to be trade
secrets; it eventually succeeded for the first time in growing a
17-inch crystal of a type useful in the detection of ionizing
radiation. The individual respondents, former employees of Harshaw
who. while working there. had signed agreements not to disclose
trade secrets obtained as employees, formed or later joined
respondent Bicron Corp., which competed with Harshaw in producing
crystals; Bicron, soon after its formation, also grew a 17-inch
crystal. Petitioner brought this diversity action seeking
injunctive relief and damages for misappropriation of trade
secrets. The District Court, applying Ohio trade secret law,
granted a permanent injunction. The Court of Appeals reversed on
the ground that Ohio's trade secret law conflicted with the federal
patent laws. Held: Ohio's trade secret law is not preempted by the
federal patent laws. Pp. 416 U. S.
474 -493.

															(a) The States are not forbidden to protect the kinds of
intellectual property that may make up the subject matter of trade
secrets; just as the States may exercise regulatory power over
writings, Goldstein v. California, 412 U.
S. 546 , so may they regulate with respect to
discoveries, the only limitation being that regulation in the area
of patents and copyrights must not conflict with the operation of
federal laws in this area. Pp. 416 U. S.
478 -479.

															(b) Abolition of trade secret protection would not result in
increased disclosure to the public of discoveries in the area of
nonpatentable subject matter, and the public would not be benefited
by disclosure of such discoveries. Pp. 416 U. S. 482 483.

															(c) The federal patent policy of encouraging invention is not
disturbed by the existence of another form of incentive to
invention such as trade secret protection, and, in this respect,
the two systems are not in conflict. P. 416 U. S.
484 .

															(d) Nor is the patent policy that matter once in the public
domain must remain there incompatible with the existence of trade
secret protection. P. 416 U. S.
484 . Page 416 U. S. 471 (e) Nor is there any conflict between trade secret law and the
patent policy of disclosure whether a trade secret concerning
patentable subject matter is in the category of discovery which is
(1) clearly unpatentable, (2) doubtfully patentable, or (3) clearly
patentable. As to the first category, the patent alternative is not
available, and trade secret law will encourage invention and prompt
the innovator to proceed with the discovery and exploitation of his
invention, and to license others to exploit secret processes. As to
the second category, the risk and cost of eventual patent
invalidity may impel the inventor not to seek patent protection
regardless of the existence of trade secret law, and the
encouragement by the elimination of trade secret protection of
patent applications by some with doubtfully patentable inventions
is likely to have a deleterious effect on society and patent
policy. As to the third category, trade secret law, which affords
weaker protection than the patent laws, presents no reasonable risk
of deterrence from patent application. Pp. 416 U. S.
484 -491.

															(f) There being no real possibility that trade secret law will
conflict with federal patent policy, partial preemption as to
clearly patentable inventions would not be appropriate, and could
well unnecessarily burden administration of trade secret law by
States. Pp. 416 U. S.
491 -492.

															478 F.2d 1074, reversed and remanded for reinstatement of
District Court Judgment.

															BURGER, C.J., delivered the opinion of the Court, in which
STEWART, WHITE, BLACKMUN, and REHNQUIST, JJ., joined. MARSHALL, J.,
filed an opinion concurring in the result, post, p. 416 U.S. 493 . DOUGLAS, J.,
filed a dissenting opinion, in which BRENNAN, .J., joined, post, p. 416 U.S.
495 . POWELL, J., took no part in the decision of the
case. Page 416 U. S. 472 MR. CHIEF JUSTICE BURGER delivered the opinion of the Court.

															We granted certiorari to resolve a question on which there is a
conflict in the courts of appeals: whether state trade secret
protection is preempted by operation of the federal patent law.
[ Footnote 1 ] In the instant
case, the Court of Appeals for the Sixth Circuit held that there
was preemption. [ Footnote 2 ]
The Courts of Appeals for the Second, Fourth, Fifth, and Ninth
Circuits have reached the opposite conclusion. [ Footnote 3 ] Page 416 U. S. 473 I Harshaw Chemical Co., an unincorporated division of petitioner,
is a leading manufacturer of a type of synthetic crystal which is
useful in the detection of ionizing radiation. In 1949, Harshaw
commenced research into the growth of this type crystal and was
able to produce one less than two inches in diameter. By 1966, as
the result of expenditures in excess of $1 million, Harshaw was
able to grow a 17-inch crystal, something no one else had done
previously. Harshaw had developed many processes, procedures, and
manufacturing techniques in the purification of raw materials and
the growth and encapsulation of the crystals which enabled it to
accomplish this feat. Some of these processes Harshaw considers to
be trade secrets.

															The individual respondents are former employees of Harshaw who
formed or later joined respondent Bicron. While at Harshaw, the
individual 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
Harshaw. Bicron was formed in August, 1969, to compete with Harshaw
in the production of the crystals, and by April, 1970, had grown a
17-inch crystal.

															Petitioner brought this diversity action in United States
District Court for the Northern District of Ohio seeking injunctive
relief and damages for the misappropriation of trade secrets. The
District Court, applying Ohio trade secret law, granted a permanent
injunction against the disclosure or use by respondents of 20 of
the 40 claimed trade secrets until such time as the trade secrets
had Page 416 U. S. 474 been released to the public, had otherwise generally become
available to the public, or had been obtained by respondents from
sources having the legal right to convey the information.

															The Court of Appeals for the Sixth Circuit held that the
findings of fact by the District Court were not clearly erroneous,
and that it was evident from the record that the individual
respondents appropriated to the benefit of Bicron secret
information on processes obtained while they were employees at
Harshaw. Further, the Court of Appeals held that the District Court
properly applied Ohio law relating to trade secrets. Nevertheless,
the Court of Appeals reversed the District Court, finding Ohio's
trade secret law to be in conflict with the patent laws of the
United States. The Court of Appeals reasoned that Ohio could not
grant monopoly protection to processes and manufacturing techniques
that were appropriate subjects for consideration under 35 U.S.C. §
101 for a federal patent but which had been in commercial use for
over one year, and so were no longer eligible for patent protection
under 35 U.S.C. § 102(b).

															We hold that Ohio's law of trade secrets is not preempted by the
patent laws of the United States, and, accordingly, we reverse. II Ohio has adopted the widely relied-upon definition of a trade
secret found at Restatement of Torts § 757, comment b (1939). B. F. Goodrich Co. v. Wohlgemuth, 117 Ohio App.
493, 498, 192 N.E.2d 99, 104 (1963); W. R. Grace & Co. v.
Naradine, 392 F.2d 9, 14 (CA6 1968). According to the
Restatement,

															"[a] trade secret may consist of any formula, pattern, device or
compilation of information which is used in one's business, and
which gives him an opportunity to obtain an advantage over
competitors who do not Page 416 U. S. 475 know or use it. It may be a formula for a chemical compound, a
process of manufacturing, treating or preserving materials, a
pattern for a machine or other device, or a list of customers."

															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. B. F. Goodrich Co. v. Wohlgemuth, supra, at 499,
192 N.E.2d at 104; National Tube Co. v. Eastern Tube Co., 3 Ohio C.C.R. (n.s.) 459, 462 (1902), aff'd, 69 Ohio St.
560, 70 N.E. 1127 (1903). 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." Cincinnati Bell Foundry Co. v.
Dodds, 10 Ohio Dec.Reprint 154, 156, 19 Weekly L.Bull. 84
(Super.Ct. 1887). 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." National Tube Co. v.
Eastern Tube Co., supra, at 462. Often, the recipient of
confidential knowledge of the subject of a trade secret is a
licensee of its holder. See Lear, Inc. v. Adkins, 395 U. S. 653 (1969).

															The protection accorded the trade secret holder is against the
disclosure or unauthorized use of the trade secret by those to whom
the secret has been confided under the express or implied
restriction of nondisclosure or nonuse. [ Footnote 4 ] The law also protects the holder of a
trade Page 416 U. S. 476 secret against disclosure or use when the knowledge is gained
not by the owner's volition, but by some "improper means,"
Restatement of Torts § 757(a), which may include theft,
wiretapping, or even aerial reconnaissance. [ Footnote 5 ] A trade secret law, however, does not
offer protection against discovery by fair and honest means, such
as by independent invention, accidental disclosure, or by so-called
reverse engineering, that is, by starting with the known product
and working backward to divine the process which aided in its
development or manufacture. [ Footnote 6 ]

															Novelty, in the patent law sense, is not required for a trade
secret, W. R. Grace & Co. v. Hargadine, 392 F.2d at
14. "Quite clearly, discovery is something less than invention." A. O. Smith Corp. v. Petroleum Iron Works Co., 73 F.2d
531, 538 (CA6 1934), modified to increase scope of
injunction, 74 F.2d 934 (1935). However, some novelty will be
required, if merely because that which does not possess novelty is
usually known; secrecy, in the context of trade secrets, thus
implies at least minimal novelty. [ Footnote 7 ]

															The subject matter of a patent is limited to a "process,
machine, manufacture, or composition of matter, or . . .
improvement thereof," 35 U.S.C. § 101, which fulfills the three
conditions of novelty and utility as articulated and defined in 35
U.S.C. §§ 101 and 102, and nonobviousness, Page 416 U. S. 477 as set out in 35 U.S.C. § 103. [ Footnote 8 ] If an invention meets the rigorous statutory
tests for the issuance of a patent, the patent is granted, for a
period of 17 Page 416 U. S. 478 years, giving what has been described as the "right of
exclusion," R. Ellis, Patent Assignments and Licenses § 4, p. 7 (2d
ed.1943). [ Footnote 9 ] This
protection goes not only to copying the subject matter, which is
forbidden under the Copyright Act, 17 U.S.C. § 1 et seq., but also to independent creation. III The first issue we deal with is whether the States are forbidden
to act at all in the area of protection of the kinds of
intellectual property which may make up the subject matter of trade
secrets.

															Article I, § 8, cl. 8, of the Constitution grants to the
Congress the power

															"[t]o promote the Progress of Science and useful Arts, by
securing for limited Times to Authors and Inventors the exclusive
Right to their respective Writings and Discoveries. . . ."

															In the 1972 Term, in Goldstein v. California, 412 U. S. 546 (1973), we held that the cl. 8 grant of power to Congress was not
exclusive, and that, at least in the case of writings, the States
were not prohibited from encouraging and protecting the efforts of
those within their borders by Page 416 U. S. 479 appropriate legislation. The States could, therefore, protect
against the unauthorized rerecording for sale of performances fixed
on records or tapes, even though those performances qualified as
"writings" in the constitutional sense and Congress was empowered
to legislate regarding such performances and could preempt the area
if it chose to do so. This determination was premised on the great
diversity of interests in our Nation -- the essentially nonuniform
character of the appreciation of intellectual achievements in the
various States. Evidence for this came from patents granted by the
States in the 18th century. 412 U.S. at 412 U. S.
557 .

															Just as the States may exercise regulatory power over writings,
so may the States regulate with respect to discoveries. States may
hold diverse viewpoints in protecting intellectual property
relating to invention as they do in protecting the intellectual
property relating to the subject matter of copyright. The only
limitation on the States is that, in regulating the area of patents
and copyrights, they do not conflict with the operation of the laws
in this area passed by Congress, and it is to that more difficult
question we now turn. IV The question of whether the trade secret law of Ohio is void
under the Supremacy Clause involves a consideration of whether that
law "stands as an obstacle to the accomplishment and execution of
the full purposes and objectives of Congress." Hines v.
Davidowitz, 312 U. S. 52 , 312 U. S. 67 (1941). See Florida Avocado Growers v. Paul, 373 U.
S. 132 , 373 U. S. 141 (1963). We stated in Sear, Roebuck Co. v. Stiffel Co., 376 U. S. 225 , 376 U. S. 229 (1964), that, when state law touches upon the area of federal
statutes enacted pursuant to constitutional authority,

															"it is 'familiar doctrine' that the federal policy Page 416 U. S. 480 'may not be set at naught, or its benefits denied,' by the state
law. Sola Elec. Co. v. Jefferson Elec. Co., 317 U. S.
173 , 317 U. S. 176 (1942). This
is true, of course, even if the state law is enacted in the
exercise of otherwise undoubted state power."

															The laws which the Court of Appeals in this case held to be in
conflict with the Ohio law of trade secrets were the patent laws
passed by the Congress in the unchallenged exercise of its clear
power under Art. I, § 8, cl. 8, of the Constitution. The patent law
does not explicitly endorse or forbid the operation of trade secret
law. However, as we have noted, if the scheme of protection
developed by Ohio respecting trade secrets "clashes with the
objectives of the federal patent laws," Sears, Roebuck &
Co. v. Stiffel Co., supra, at 376 U. S. 231 ,
then the state law must fall. To determine whether the Ohio law
"clashes" with the federal law, it is helpful to examine the
objectives of both the patent and trade secret laws.

															The stated objective of the Constitution in granting the power
to Congress to legislate in the area of intellectual property is to
"promote the Progress of Science and useful Arts." The patent laws
promote this progress by offering a right of exclusion for a
limited period as an incentive to inventors to risk the often
enormous costs in terms of time, research, and development. The
productive effort thereby fostered will have a positive effect on
society through the introduction of new products and processes of
manufacture into the economy, and the emanations by way of
increased employment and better lives for our citizens. In return
for the right of exclusion -- this "reward for inventions," Universal Oil Co. v. Globe Co., 322 U.
S. 471 , 322 U. S. 484 (1944) -- the patent laws impose upon the inventor a requirement of
disclosure. To insure adequate and full disclosure so that upon
the Page 416 U. S. 481 expiration of the 17-year period, "the knowledge of the
invention enures to the people, who are thus enabled without
restriction to practice it and profit by its use," United
States v. Dubilier Condenser Corp., 289 U.
S. 178 , 289 U. S. 187 (1933), the patent laws require [ Footnote 10 ] that the patent application shall include a
full and clear description of the invention and "of the manner and
process of making and using it" so that any person skilled in the
art may make and use the invention. 35 U.S.C. § 112. When a patent
is granted and the information contained in it is circulated to the
general public and those especially skilled in the trade, such
additions to the general store of knowledge are of such importance
to the public weal that the Federal Government is willing to pay
the high price of 17 years of exclusive use for its disclosure,
which disclosure, it is assumed, will stimulate ideas and the
eventual development of further significant advances in the art.
The Court has also articulated another policy of the patent law:
that which is in the public domain cannot be removed therefrom by
action of the States. "[F]ederal law requires that all ideas in
general circulation be dedicated to the common good unless they are
protected by a valid patent." Lear, Inc. v. Adkins, 395
U.S. at 395 U. S. 668 . See also Goldstein v. California, 412 U.S. at 412 U. S.
570 -571; Sears, Roebuck & Co. v. Stiffel Co.,
supra; Compco Corp. v. Day-Brite Lighting, Inc., 376 U.
S. 234 , 376 U. S.
237 -238 (1964); International News Service v.
Associated Press, 248 U. S. 215 , 248 U. S. 250 (1918) (Brandeis, J., dissenting). The maintenance of standards of
commercial ethics and the encouragement of invention are the
broadly stated policies behind trade secret law. "The necessity of
good faith and honest, fair dealing, is the very life Page 416 U. S. 482 and spirit of the commercial world." National Tube Co. v.
Eastern Tube Co., 3 Ohio C.C.R. (n.s.), at 462. [ Footnote 11 ] In A. O. Smith
Corp. v. Petroleum Iron Works Co., 73 F.2d at 539, the Court
emphasized that, even though a discovery may not be patentable,
that does not

															"destroy the value of the discovery to one who makes it, or
advantage the competitor who by unfair means, or a the beneficiary
of a broken faith, obtains the desired knowledge without himself
paying the price in labor, money, or machines expended by the
discoverer."

															In Wexler v. Greenberg, 399 Pa. 569, 578-579, 160 A.2d
430, 434-435 (1960), the Pennsylvania Supreme Court noted the
importance of trade secret protection to the subsidization of
research and development and to increased economic efficiency
within large companies through the dispersion of responsibilities
for creative developments. [ Footnote 12 ]

															Having now in mind the objectives of both the patent and trade
secret law, we turn to an examination of the interaction of these
systems of protection of intellectual property -- one established
by the Congress and the other by a State to determine whether and
under what circumstances the latter might constitute "too great an
encroachment on the federal patent system to be tolerated." Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. at 376 U. S.
232 .

															As we noted earlier, trade secret law protects items which would
not be proper subjects for consideration for patent protection
under 35 U.S.C. § 101. As in the Page 416 U. S. 483 case of the recordings in Goldstein v. California, Congress, with respect to nonpatentable subject matter, "has drawn
no balance; rather, it has left the area unattended, and no reason
exists why the State should not be free to act." Goldstein v.
California, supra, at 412 U. S. 570 (footnote omitted).

															Since no patent is available for a discovery, however useful,
novel, and nonobvious, unless it falls within one of the express
categories of patentable subject matter of 35 U.S.C. § 101, the
holder of such a discovery would have no reason to apply for a
patent whether trade secret protection existed or not. Abolition of
trade secret protection would, therefore, not result in increased
disclosure to the public of discoveries in the area of
nonpatentable subject matter. Also it is hard to see how the public
would be benefited by disclosure of customer lists or advertising
campaigns; in fact, keeping such items secret encourages businesses
to initiate new and individualized plans of operation, and
constructive competition results. This, in turn, leads to a greater
variety of business methods than would otherwise be the case if
privately developed marketing and other data were passed illicitly
among firms involved in the same enterprise.

															Congress has spoken in the area of those discoveries which fall
within one of the categories of patentable subject matter of 35
U.S.C. § 101 and which are, therefore, of a nature that would be
subject to consideration for a patent. Processes, machines,
manufactures, compositions of matter, and improvements thereof,
which meet the tests of utility, novelty, and nonobviousness are
entitled to be patented, but those which do not are not. The
question remains whether those items which are proper subjects for
consideration for a patent may also have available the alternative
protection accorded by trade secret law. Page 416 U. S. 484 Certainly the patent policy of encouraging invention is not
disturbed by the existence of another form of incentive to
invention. In this respect, the two systems are not and never would
be in conflict. Similarly, the policy that matter once in the
public domain must remain in the public domain is not incompatible
with the existence of trade secret protection. By definition, a
trade secret has not been placed in the public domain. [ Footnote 13 ]

															The more difficult objective of the patent law to reconcile with
trade secret law is that of disclosure, the quid pro quo of the right to exclude. Universal Oil Co. v. Globe Co., 322 U.S. at 322 U. S. 484 .
We are helped in this stage of the analysis by Judge Henry
Friendly's opinion in Painton & Co. v. Bourns, Inc., 442 F.2d 216 (CA2 1971). There, the Court of Appeals thought it
useful, in determining whether inventors will refrain because of
the existence of trade secret law from applying for patents,
thereby depriving the public from learning of the invention, to
distinguish between three categories of trade secrets:

															"(1) the trade secret believed by its owner to constitute a
validly patentable invention; (2) the trade secret known to its
owner not to be so patentable; and (3) the trade secret whose valid
patentability is considered dubious." Id. at 224. Trade secret protection in each of these
categories would run against breaches of confidence -- the employee
and licensee situations -- and theft and other forms of industrial
espionage.

															As to the trade secret known not to meet the standards Page 416 U. S. 485 of patentability, very little in the way of disclosure would be
accomplished by abolishing trade secret protection. With trade
secrets of nonpatentable subject matter, the patent alternative
would not reasonably be available to the inventor.

															"There can be no public interest in stimulating developers of
such [unpatentable] know-how to flood an overburdened Patent Office
with applications [for] what they do not consider patentable." Ibid. The mere filing of applications doomed to be
turned down by the Patent Office will bring forth no new public
knowledge or enlightenment, since, under federal statute and
regulation, patent applications and abandoned patent applications
are held by the Patent Office in confidence, and are not open to
public inspection. 35 U.S.C. § 122; 37 CFR § 1.14(b).

															Even as the extension of trade secret protection to patentable
subject matter that the owner knows will not meet the standards of
patentability will not conflict with the patent policy of
disclosure, it will have a decidedly beneficial effect on society.
Trade secret law will encourage invention in areas where patent law
does not reach, and will prompt the independent innovator to
proceed with the discovery and exploitation of his invention.
Competition is fostered, and the public is not deprived of the use
of valuable, if not quite patentable, invention. [ Footnote 14 ]

															Even if trade secret protection against the faithless employee
were abolished, inventive and exploitive effort in the area of
patentable subject matter that did not meet the standards of
patentability would continue, although at a reduced level.
Alternatively, with the effort that remained, however, would come
an increase in the amount of self-help that innovative
companies Page 416 U. S. 486 would employ. Knowledge would be widely dispersed among the
employees of those still active in research. Security precautions
necessarily would be increased, and salaries and fringe benefits of
those few officers or employees who had to know the whole of the
secret invention would be fixed in an amount thought sufficient to
assure their loyalty. [ Footnote
15 ] Smaller companies would be placed at a distinct economic
disadvantage, since the costs of this kind of self-help could be
great, and the cost to the public of the use of this invention
would be increased. The innovative entrepreneur with limited
resources would tend to confine his research efforts to himself and
those few he felt he could trust without the ultimate assurance of
legal protection against breaches of confidence. As a result,
organized scientific and technological research could become
fragmented, and society, as a whole, would suffer.

															Another problem that would arise if state trade secret
protection were precluded is in the area of licensing others to
exploit secret processes. The holder of a trade secret would not
likely share his secret with a manufacturer who cannot be placed
under binding legal obligation to pay a license fee or to protect
the secret. The result would be to hoard, rather than disseminate,
knowledge. Painton Co. v. Bourns, Inc., 442 F.2d at 223.
Instead, then, of licensing others to use his invention and making
the most efficient use of existing manufacturing and marketing
structures within the industry, the trade secret holder would tend
either to limit his utilization of the invention, thereby depriving
the public of the maximum benefit of its use, or engage in the
time-consuming and economically wasteful enterprise of Page 416 U. S. 487 constructing duplicative manufacturing and marketing mechanisms
for the exploitation of the invention. The detrimental
misallocation of resources and economic waste that would thus take
place if trade secret protection were abolished with respect to
employees or licensees cannot be justified by reference to any
policy that the federal patent law seeks to advance.

															Nothing in the patent law requires that States refrain from
action to prevent industrial espionage. In addition to the
increased costs for protection from burglary, wiretapping, bribery,
and the other means used to misappropriate trade secrets, there is
the inevitable cost to the basic decency of society when one firm
steals from another. A most fundamental human right, that of
privacy, is threatened when industrial espionage is condoned or is
made profitable; [ Footnote
16 ] the state interest in denying profit to such illegal
ventures is unchallengeable.

															The next category of patentable subject matter to deal with is
the invention whose holder has a legitimate doubt as to its
patentability. The risk of eventual patent invalidity by the courts
and the costs associated with that risk may well impel some with a
good faith doubt as to patentability not to take the trouble to
seek to obtain and defend patent protection for their discoveries,
regardless of the existence of trade secret protection. Trade
secret protection would assist those inventors in the more
efficient exploitation of their discoveries and not conflict with
the patent law. In most cases of genuine doubt as to patent
validity, the potential rewards of patent protection are so far
superior to those accruing to holders of trade secrets that the
holders of Page 416 U. S. 488 such inventions will seek patent protection, ignoring the trade
secret route. For those inventors "on the line" as to whether to
seek patent protection, the abolition of trade secret protection
might encourage some to apply for a patent who otherwise would not
have done so. For some of those so encouraged, no patent will be
granted, and the result

															"will have been an unnecessary postponement in the divulging of
the trade secret to persons willing to pay for it. If [the patent
does issue], it may well be invalid, yet many will prefer to pay a
modest royalty than to contest it, even though Lear allows
them to accept a license and pursue the contest without paying
royalties while the fight goes on. The result in such a case would
be unjustified royalty payments from many who would prefer not to
pay them, rather than agreed fees from one or a few who are
entirely willing to do so." Painton Co. v. Bourns, Inc., 442 F.2d at 225. The point
is that those who might be encouraged to file for patents by the
absence of trade secret law will include inventors possessing the
chaff as well as the wheat. Some of the chaff -- the nonpatentable
discoveries -- will be thrown out by the Patent Office, but, in the
meantime, society will have been deprived of use of those
discoveries through trade secret-protected licensing. Some of the
chaff may not be thrown out. This Court has noted the difference
between the standards used by the Patent Office and the courts to
determine patentability. Graham v. John Deere Co., 383 U. S. 1 , 383 U. S. 18 (1966). [ Footnote 17 ] In Lear, Inc. v. Adkins, 395 U. S. 653 (1969), the Court thought that an invalid patent was so serious a
threat to the free use of Page 416 U. S. 489 ideas already in the public domain that the Court permitted
licensees of the patent holder to challenge the validity of the
patent. Better had the invalid patent never been issued. More of
those patents would likely issue if trade secret law were
abolished. Eliminating trade secret law for the doubtfully
patentable invention is thus likely to have deleterious effects on
society and patent policy which we cannot say are balanced out by
the speculative gain which might result from the encouragement of
some inventors with doubtfully patentable inventions which deserve
patent protection to come forward and apply for patents. There is
no conflict, then, between trade secret law and the patent law
policy of disclosure, at least insofar as the first two categories
of patentable subject matter are concerned.

															The final category of patentable subject matter to deal with is
the clearly patentable invention, i.e., that invention
which the owner believes to meet the standards of patentability. It
is here that the federal interest in disclosure is at its peak;
these inventions, novel, useful and nonobvious, are " the things
which are worth to the public the embarrassment of an exclusive
patent.'" Graham v. John Deere Co., supra, at 383 U. S. 9 (quoting Thomas Jefferson). The interest of the public is that the
bargain of 17 years of exclusive use in return for disclosure be
accepted. If a State, through a system of protection, were to cause
a substantial risk that holders of patentable inventions would not
seek patents, but rather would rely on the state protection, we
would be compelled to hold that such a system could not
constitutionally continue to exist. In the case of trade secret
law, no reasonable risk of deterrence from patent application by
those who can reasonably expect to be granted patents
exists. Trade secret law provides far weaker protection in Page 416 U. S. 490 many respects than the patent law. [ Footnote 18 ] While trade secret law does not forbid
the discovery of the trade secret by fair and honest means, e.g., independent creation or reverse engineering, patent
law operates "against the world," forbidding any use of the
invention for whatever purpose for a significant length of time.
The holder of a trade secret also takes a substantial risk that the
secret will be passed on to his competitors, by theft or by breach
of a confidential relationship, in a manner not easily susceptible
of discovery or proof. Painton & Co. v. Bourns, Inc., 442 F.2d at 224. Where patent law acts as a barrier, trade secret
law functions relatively as a sieve. The possibility that an
inventor who believes his invention meets the standards of
patentability will sit back, rely on trade secret law, and, after
one year of use, forfeit any right to patent protection, 35 U.S.C.
§ 102(b), is remote indeed.

															Nor does society face much risk that scientific or technological
progress will be impeded by the rare inventor with a patentable
invention who chooses trade secret protection over patent
protection. The ripeness-of-time concept of invention, developed
from the study of the many independent multiple discoveries in
history, predicts that, if a particular individual had not made a
particular discovery, others would have, and in probably a
relatively short period of time. If something is to be discovered
at all, very likely it will be discovered by more than one person.
Singletons and Multiples in Science (1961), in R. Merton, The
Sociology of Science 343 (1973); J. Cole & S. Cole, Social
Stratification in Science 12-13, 229-230 (1973); Ogburn &
Thomas, Are Inventions Inevitable?, 37 Pol.Sci.Q. 83 (1922).
[ Footnote 19 ] Even Page 416 U. S. 491 were an inventor to keep his discovery completely to himself,
something that neither the patent nor trade secret laws forbid,
there is a high probability that it will be soon independently
developed. If the invention, though still a trade secret, is put
into public use, the competition is alerted to the existence of the
inventor's solution to the problem, and may be encouraged to make
an extra effort to independently find the solution thus known to be
possible. The inventor faces pressures not only from private
industry, but from the skilled scientists who work in our
universities and our other great publicly supported centers of
learning and research.

															We conclude that the extension of trade secret protection to
clearly patentable inventions does not conflict with the patent
policy of disclosure. Perhaps because trade secret law does not
produce any positive effects in the area of clearly patentable
inventions, as opposed to the beneficial effects resulting from
trade secret protection in the areas of the doubtfully patentable
and the clearly unpatentable inventions, it has been suggested that
partial preemption may be appropriate, and that courts should
refuse to apply trade secret protection to inventions which the
holder should have patented, and which would have been, thereby,
disclosed. [ Footnote 20 ]
However, since there is no real possibility that trade secret law
will conflict with the federal policy favoring disclosure of
clearly patentable inventions, partial preemption is
inappropriate. Page 416 U. S. 492 Partial preemption, furthermore, could well create serious
problems for state courts in the administration of trade secret
law. As a preliminary matter in trade secret actions, state courts
would be obliged to distinguish between what a reasonable inventor
would and would not correctly consider to be clearly patentable,
with the holder of the trade secret arguing that the invention was
not patentable and the misappropriator of the trade secret arguing
its undoubted novelty, utility, and nonobviousness. Federal courts
have a difficult enough time trying to determine whether an
invention, narrowed by the patent application procedure [ Footnote 21 ] and fixed in the
specifications which describe the invention for which the patent
has been granted, is patentable. [ Footnote 22 ] Although state courts in some circumstances
must join federal courts in judging whether an issued patent is
valid, Lear, Inc. v. Adkins, supra, it would be
undesirable to impose the almost impossible burden on state courts
to determine the patentability -- in fact, and in the mind of a
reasonable inventor -- of a discovery which has not been patented
and remains entirely uncircumscribed by expert analysis in the
administrative process. Neither complete nor partial preemption of
state trade secret law is justified. Our conclusion that patent law
does not preempt trade secret law is in accord with prior cases of
this Court. Universal Oil Co. v. Globe Co., 322 U.S. at 322 U. S. 484 ; United States v. Dubilier Condenser Corp., 289 U.S. at 289 U. S.
186 -187; Becher v. Contoure Laboratories, 279 U. S. 388 , 279 U. S. 391 (1929); Du Pont Powder Co. v. Masland, 244 U.
S. 100 , 244 U. S. 102 (1917); Dr. Miles Medical Co. v. Park & Sons Co., 220 U. S. 373 , 220 U. S.
402 -403 (1911); Board of Trade v.
Christie Page 416 U. S. 493 Grain & Stock Co., 198 U.
S. 236 , 198 U. S.
250 -251 (1905). [ Footnote 23 ] Trade secret law and patent law have
coexisted in this country for over one hundred years. Each has its
particular role to play, and the operation of one does not take
away from the need for the other. Trade secret law encourages the
development and exploitation of those items of lesser or different
invention than might be accorded protection under the patent laws,
but which items still have an important part to play in the
technological and scientific advancement of the Nation. Trade
secret law promotes the sharing of knowledge, and the efficient
operation of industry; it permits the individual inventor to reap
the rewards of his labor by contracting with a company large enough
to develop and exploit it. Congress, by its silence over these many
years, has seen the wisdom of allowing the States to enforce trade
secret protection. Until Congress takes affirmative action to the
contrary, States should be free to grant protection to trade
secrets.

															Since we hold that Ohio trade secret law is not preempted by the
federal patent law, the judgment of the Court of Appeals for the
Sixth Circuit is reversed, and the case is remanded to the Court of
Appeals with directions to reinstate the judgment of the District
Court. It is so ordered. MR. JUSTICE POWELL took no part in the decision of this
case.

															[ Footnote 1 ]

															414 U.S. 818 (1973)

															[ Footnote 2 ]

															478 F.2d 1074 (1973)

															[ Footnote 3 ] Painton & Co. v. Bourns, Inc., 442 F.2d 216 (CA2
1971); Servo Corp. of America v. General Electric Co., 337
F.2d 716 (CA4 1964), cert. denied, 383 U.S. 934 (1966); Water Services, Inc. v. Tesco Chemicals, Inc., 410 F.2d
163 (CA5 1969); Winston Research Corp. v. Minnesota Mining
& Mfg. Co., 350 F.2d 134 (CA9 1965); Dekar Industries,
Inc. v. Bisett-Berman Corp., 434 F.2d 1304 (CA9 1970), cert. denied, 402 U.S. 945 (1971).

															[ Footnote 4 ]

															Ohio Rev.Code Ann. § 1333.51(C) (Supp. 1973) provides:

															"No person, having obtained possession of an article
representing a trade secret or access thereto with the owner's
consent, shall convert such article to his own use or that of
another person, or thereafter without the owner's consent make or
cause to be made a copy of such article, or exhibit such article to
another."

															Ohio Rev.Code Ann. § 1333.99(E) (Supp. 1973) provides:

															"Whoever violates section 1333.51 of the Revised Code shall be
fined not more than five thousand dollars, imprisoned not less than
one nor more than ten years, or both."

															[ Footnote 5 ] E. I. duPont de Nemours & Co. v. Christopher, 431
F.2d 1012 (CA5 1970), cert. denied, 400 U.S. 1024 (1971). See generally Comment, Theft of Trade Secrets: The Need
for a Statutory Solution, 120 U.Pa.L.Rev. 378 (1971).

															[ Footnote 6 ] National Tube Co. v. Eastern Tube Co., 3 Ohio C.C.R.
(n.s.) 459, 462 (1902), aff'd, 69 Ohio St. 560, 70 N.E.
1127 (1903).

															[ Footnote 7 ] See Comment, The Stiffel Doctrine and the Law
of Trade Secrets, 62 Nw.U.L.Rev. 956, 969 (1968).

															[ Footnote 8 ]

															"§ 101. Inventions patentable "

															"Whoever invents or discovers any new and useful process,
machine, manufacture, or composition of matter, or any new and
useful improvement thereof, may obtain a patent therefor, subject
to the conditions and requirements of this title."

															"§ 102. Conditions for patentability; novelty and loss of
right to patent "

															"A person shall be entitled to a patent unless --"

															"(a) the invention was known or used by others in this country,
or patented or described in a printed publication in this or a
foreign country, before the invention thereof by the applicant for
patent, or"

															"(b) the invention was patented or described in a printed
publication in this or a foreign country or in public use or on
sale in this country, more than one year prior to the date of the
application for patent in the United States, or"

															"(c) he has abandoned the invention, or"

															"(d) the invention was first patented or caused to be patented,
or was the subject of an inventor's certificate, by the applicant
or his legal representatives or assigns in a foreign country prior
to the date of the application for patent in this country on an
application for patent or inventor's certificate filed more than
twelve months before the filing of the application in the United
States, or"

															"(e) the invention was described in a patent granted on an
application for patent by another filed in the United States before
the invention thereof by the applicant for patent, or"

															"(f) he did not himself invent the subject matter sought to be
patented, or"

															"(g) before the applicant's invention thereof, the invention was
made in this country by another who had not abandoned, suppressed,
or concealed it. In determining priority of invention there shall
be considered not only the respective dates of conception and
reduction to practice of the invention, but also the reasonable
diligence of one who was first to conceive and last to reduce to
practice, from a time prior to conception by the other."

															"§ 103. Conditions for patentability; non-obvious subject
matter "

															"A patent may not be obtained though the invention is not
identically disclosed or described as set forth in section 102 of
this title, if the differences between the subject matter sought to
be patented and the prior art are such that the subject matter as a
whole would have been obvious at the time the invention was made to
a person having ordinary skill in the art to which said subject
matter pertains. Patentability shall not be negatived by the manner
in which the invention was made."

															[ Footnote 9 ]

															Title 35 U.S.C. § 154 provides:

															"Every patent shall contain a short title of the invention and a
grant to the patentee, his heirs or assigns, for the term of
seventeen years, subject to the payment of issue fees as provided
for in this title, of the right to exclude others from making,
using, or selling the invention throughout the United States,
referring to the specification for the particulars thereof. A copy
of the specification and drawings shall be annexed to the patent
and be a part thereof."

															[ Footnote 10 ]

															35 U.S.C. § 111.

															[ Footnote 11 ] See also Winston Research Corp. v. Minnesota Mining &
Mfg. Co., 350 F.2d at 138.

															[ Footnote 12 ] See also Water Services, Inc. v. Tesco Chemicals, Inc., 410 F.2d at 171.

															[ Footnote 13 ]

															An invention may be placed "in public use or on sale" within the
meaning of 35 U.S.C. § 102(b) without losing its secret character. Painton & Co. v. Bourns, Inc., 442 F.2d at 224 n. 6; Metallizing Engineering Co. v. Kenyon Bearing & Auto Parts
Co., 153 F.2d 516, 520 (CA2), cert. denied, 328 U.S.
840 (1946).

															[ Footnote 14 ]

															Doerfer, The Limits on Trade Secret Law Imposed by Federal
Patent and Antitrust Supremacy, 80 Harv.L.Rev. 1432, 1454
(1967).

															[ Footnote 15 ] See generally Wydick, Trade Secrets: Federal Preemption
in Light of Goldstein and Kewanee (Part II --
Conclusion), 56 J. Pat.Off.Soc. 4, 23-24 (1974).

															[ Footnote 16 ]

															Note, Patent Preemption of Trade Secret Protection of Inventions
Meeting Judicial Standard of Patentability, 87 Harv.L.Rev. 807, 828
(1974).

															[ Footnote 17 ]

															For a possible explanation see P. Areeda, Antitrust
Analysis � 406(d), pp. 327-328 (1967).

															[ Footnote 18 ] Water Services, Inc. v. Tesco Chemicals, Inc., 410 F.2d
at 172.

															[ Footnote 19 ] See J. Watson, The Double Helix (1968). If Watson and
Crick had not discovered the structure of DNA it is likely that
Linus Pauling would have made the discovery soon. Other examples of
multiple discovery are listed at length in the Ogburn and Thomas
article.

															[ Footnote 20 ] See Note, Patent Preemption of Trade Secret Protection
of Inventions Meeting Judicial Standards of Patentability, 87
Harv.L.Rev. 807 (1974); Brief for the United States as Amicus
Curiae, presenting the view within the Government favoring
limited preemption (which view is not that of the United States,
which believes that patent law does not preempt state trade secret
law).

															[ Footnote 21 ] See P. Areeda, Antitrust Analysis � 407, p. 329
(1967).

															[ Footnote 22 ] See Judge L. Hand's lament in Harries v. Air King
Products Co., 183 F.2d 158, 162 (CA2 1950).

															[ Footnote 23 ]

															The Court of Appeals below relied, in part, on Kendall v.
Winsor , 21 How. 322 (1859), a case decided nine
years before trade secret law was imported into this country from
England by means of the landmark case of Peabody v.
Norfolk, 98 Mass. 452 (1868).

															MR. JUSTICE MARSHALL, concurring in the result.

															Unlike the Court, I do not believe that the possibility that an
inventor with a patentable invention will rely Page 416 U. S. 494 on state trade secret law, rather than apply for a patent is
"remote indeed." Ante at 416 U. S. 490 .
State trade secret law provides substantial protection to the
inventor who intends to use or sell the invention himself, rather
than license it to others, protection which, in its unlimited
duration, is clearly superior to the 17-year monopoly afforded by
the patent laws. I have no doubt that the existence of trade secret
protection provides, in some instances, a substantial disincentive
to entrance into the patent system, and thus deprives society of
the benefits of public disclosure of the invention which it is the
policy of the patent laws to encourage. This case may well be such
an instance.

															But my view of sound policy in this area does not dispose of
this case. Rather, the question presented in this case is whether
Congress, in enacting the patent laws, intended merely to offer
inventors a limited monopoly in exchange for disclosure of their
invention, or instead to exert pressure on inventors to enter into
this exchange by withdrawing any alternative possibility of legal
protection for their inventions. I am persuaded that the former is
the case. State trade secret laws and the federal patent laws have
co-existed for many, many years. During this time, Congress has
repeatedly demonstrated its full awareness of the existence of the
trade secret system, without any indication of disapproval. Indeed,
Congress has, in a number of instances, given explicit federal
protection to trade secret information provided to federal
agencies. See, e.g., 5 U.S.C. § 552(b)(4); 18 U.S.C. §
1905; see generally Appendix to Brief for Petitioner.
Because of this, I conclude that there is

															"neither such actual conflict between the two schemes of
regulation that both cannot stand in the same area, nor evidence of
a congressional design to preempt the field." Florida Avocado Growers v.
Paul , Page 416 U. S. 495 373 U. S. 132 , 373 U. S. 141 (1963). I therefore concur in the result reached by the majority of
the Court.

															MR. JUSTICE DOUGLAS, with whom MR. JUSTICE BRENNAN concurs,
dissenting.

															Today's decision is at war with the philosophy of Sears,
Roebuck & Co. v. Stiffel Co., 376 U.
S. 225 , and Compco Corp. v. Day-Brite Lighting,
Inc., 376 U. S. 234 .
Those cases involved patents -- one of a pole lamp and one of
fluorescent lighting fixtures -- each of which was declared
invalid. The lower courts held, however, that though the patents
were invalid, the sale of identical or confusingly similar products
to the products of the patentees violated state unfair competition
laws. We held that, when an article is unprotected by a patent,
state law may not forbid others to copy it, because every article
not covered by a valid patent is in the public domain. Congress, in
the patent laws, decided that, where no patent existed, free
competition should prevail; that, where a patent is rightfully
issued, the right to exclude others should obtain for no longer
than 17 years, and that the States may not,

															"under some other law, such as that forbidding unfair
competition, give protection of a kind that clashes with the
objectives of the federal patent laws, [ Footnote 2/1 ]"

															376 U.S. at 376 U. S.
231 .

															The product involved in this suit, sodium iodide synthetic
crystals, was a product that could be patented, but was not.
Harshaw, the inventor, apparently contributed greatly to the
technology in that field by developing processes, procedures, and
techniques that produced Page 416 U. S. 496 much larger crystals than any competitor. These processes,
procedures, and techniques were also patentable, but no patent was
sought. Rather, Harshaw sought to protect its trade secrets by
contracts with its employees. And the District Court found that, as
a result of those secrecy precautions, "not sufficient disclosure
occurred so as to place the claimed trade secrets in the public
domain," and those findings were sustained by the Court of
Appeals.

															The District Court issued a permanent injunction against
respondents, ex-employees, restraining them from using the
processes used by Harshaw. By a patent, which would require full
disclosure, Harshaw could have obtained a 17-year monopoly against
the world. By the District Court's injunction, which the Court
approves and reinstates, Harshaw gets a permanent injunction
running into perpetuity against respondents. In Sears, as
in the present case, an injunction against the unfair competitor
issued. We said:

															"To allow a State by use of its law of unfair competition to
prevent the copying of an article which represents too slight an
advance to be patented would be to permit the State to block off
from the public something which federal law has said belongs to the
public. The result would be that, while federal law grants only 14
or 17 years' protection to genuine inventions, see 35
U.S.C. §§ 154, 173, States could allow perpetual protection to
articles too lacking in novelty to merit any patent at all under
federal constitutional standards. This would be too great an
encroachment on the federal patent system to be tolerated."

															376 U.S. at 376 U. S.
231 -232.

															The conflict with the patent laws is obvious. The decision of
Congress to adopt a patent system was based on the idea that there
will be much more innovation if discoveries are disclosed and
patented than there will be when everyone works in secret. Society
thus fosters a Page 416 U. S. 497 free exchange of technological information at the cost of a
limited 17-year monopoly. [ Footnote
2/2 ]

															A trade secret, [ Footnote 2/3 ]
unlike a patent, has no property dimension. That was the view of
the Court of Appeals, 478 F.2d 1074, 1081, and its decision is
supported by what Mr. Justice Holmes said in Du Pont Powder Co.
v. Masland, 244 U. S. 100 , 244 U. S.
102 :

															"The word property, as applied to trade-marks and trade secrets,
is an unanalyzed expression of certain Page 416 U. S. 498 secondary consequences of the primary fact that the law makes
some rudimentary requirements of good faith. Whether the plaintiffs
have any valuable secret or not the defendant knows the facts,
whatever they are, through a special confidence that he accepted.
The property may be denied, but the confidence cannot be.
Therefore, the starting point for the present matter is not
property or due process of law, but that the defendant stood in
confidential relations with the plaintiffs, or one of them. These
have given place to hostility, and the first thing to be made sure
of is that the defendant shall not fraudulently abuse the trust
reposed in him. It is the usual incident of confidential relations.
If there is any disadvantage in the fact that he knew the
plaintiffs' secrets, he must take the burden with the good.
[ Footnote 2/4 ]"

															A suit to redress theft of a trade secret is grounded in tort
damages for breach of a contract -- a historic remedy, Cataphote Corp. v. Hudson, 422 F.2d 1290. Damages for
breach of a confidential relation are not preempted by this patent
law, but an injunction Page 416 U. S. 499 against use is preempted because the patent law states the only
monopoly over trade secrets that is enforceable by specific
performance, and that monopoly exacts as a price full disclosure. A
trade secret can be protected only by being kept secret. Damages
for breach of a contract are one thing; an injunction barring
disclosure does service for the protection accorded valid patents,
and is therefore preempted.

															From the findings of fact of the lower courts, the process
involved in this litigation was unique, such a great discovery as
to make its patentability a virtual certainty. Yet the Court's
opinion reflects a vigorous activist anti-patent philosophy. My
objection is not because it is activist. This is a problem that
involves no neutral principle. The Constitution in Art. I, § 8, cl.
8, expresses the activist policy which Congress has enforced by
statutes. It is that constitutional policy which we should enforce,
not our individual notions of the public good.

															I would affirm the judgment below.

															[ Footnote 2/1 ]

															Here, as in Lear, Inc. v. Adkins, 395 U.
S. 653 , 395 U. S. 674 ,
which held that a licensee of a patent is not precluded by a
contract from challenging the patent, for if he were, that would
defeat the policy of the patent laws: "enforcing this contractual
provision would undermine the strong federal policy favoring the
full and free use of ideas in the public domain."

															[ Footnote 2/2 ]

															"The holding [of the Court of Appeals] in Kewanee seems
correct. If it is permissible for an inventor to use the law of
unfair competition as a substitute for patenting, certain
categories of inventions would receive privileged protection under
that law. Thus, a new laser, television set, or airplane could not
be protected because inventions which by their nature cannot be put
into commercial use without disclosure, are not eligible for trade
secret protection after they are put on the market. Those that can
be maintained are eligible. But as the basic economic function of
the patent system is to encourage the making and commercialization
of inventions, there seems to be no justification for providing
incentives beyond those provided by the patent law to discriminate
between different categories of inventions, i.e., those
that may inherently be kept secret and those that may not.
Moreover, state rules which would grant such incentives seem to
conflict with the economic quid pro quo underlying patent
protection; i.e., a monopoly limited in time, in return
for full disclosure of the invention. Thus, federal law has struck
a balance between incentives for inventors and the public's right
to a competitive economy. In this sense, the patent law is an
integral part of federal competitive policy."

															Adelman, Secrecy and Patenting: Some Proposals for Resolving the
Conflict, 1 APLA Quarterly Journal 296, 298-299 (1973).

															[ Footnote 2/3 ]

															Trade secrets often are unpatentable. In that event, there is no
federal policy which is contravened when an injunction to bar
disclosure of a trade secret is issued. Moreover, insofar as
foreign patents are involved, our federal patent policy is
obviously irrelevant. S. Oppenheim, Unfair Trade Practices 264-265
(2d ed.1965). As respects further contrasts between patents and
trade secrets, see Milgrim, Trade Secret Protection and
Licensing, 4 Pat.L.Rev. 375 (1972).

															[ Footnote 2/4 ]

															As to Goldstein v. California, 412 U.
S. 546 , the ruling of Mr. Justice Bradley concerning the
distinction between patents and copyright is relevant:

															"The difference between the two things, letters-patent and
copyright, may be illustrated by reference to the subjects just
enumerated. Take the case of medicines. Certain mixtures are found
to be of great value in the healing art. If the discoverer writes
and publishes a book on the subject (as regular physicians
generally do), he gains no exclusive right to the manufacture and
sale of the medicine; he gives that to the public. If he desires to
acquire such exclusive right, he must obtain a patent for the
mixture as a new art, manufacture, or composition of matter. He may
copyright his book, if he pleases, but that only secures to him the
exclusive right of printing and publishing his book. So of all
other inventions or discoveries." Baker v. Selden, 101 U. S. 99 , 101 U. S.
102 -103.