This concept was evidenced by a recent case out of Texas. Bianco, M.D. v. Globus Medical, Inc., 2:12 CV 147 (E.D. TX 10/27/14).
Dr. Bianco had an idea for a continuously adjustable spinal implant, which would fit between two adjacent vertebrae in the spine that had become compressed. Adjust the mechanism, and the vertebrae move apart. The prior art, to use a patent term, revealed mechanisms which would do the same, but were not continuously adjustable—they worked at best in increments, and could not be reversed (once you separated, that was that; no going back).
Dr. Bianco approached Globus with his idea, which apparently was not much more than some drawings and related general text, for a specific embodiment in the form of a scissor mechanism for performing the adjustability (think of a car jack).
According to the Court, Globus and the good Dr. entered into a written NDA (which apparently disappeared in the records, ultimately taking along with it a count for breach of written contract—the contract not materializing at trial). Globus had him submit a “new Idea Submission Form” with his proposal. Over the next two and a half years, Dr. Bianco inquired of Globus on multiple occasions about the Bianco device and Globus’ decision. Sometime in later 2009-early 2010, Globus then told Dr. Bianco that it is “not interested in his technology.”
Wait for it—one year later, according to the Court, Globus began marketing a continuously adjustable spinal implant. How did Dr. Bianco learn this? A Globus sales representative tried to interest him in the “new” product. (Practice Point 1: Don’t try to sell an idea submitter his product development submitted to the company). Dr. Bianco, obviously now “upset,” confronted his Globus liason with this news, who responds according to the record that “he understood that [Bianco] had intellectual property in this implant and that the company would make it right.” (Practice Point 2: Whoa.)
With that as preamble, the case is of some note because of what we see develop out of Texas trade secret law (which is not atypical here), and the interplay of Patent Law in the process. The case ultimately turned upon not a written contract, but the confidentiality associated with the disclosure and relationship established between the parties surrounding the “idea.” Evidence showed that what Globus actually developed and commercialized was not a “scissor mechanism,” but something else (called a “ramp”). But Dr. Bianco pitched that his confidential disclosure was broader than just his “scissor” embodiment, and that it was his ideas tht promted Globus to pursue the continuously expandable and reversible implant. This “spurred” Globus engineers to the “ramp” concept. (Practice Point 3: Don’t have a sketch of what would be the Globus commercial concept literally drawn by your engineer on the back of Dr. Bianco’s submission papers—I couldn’t make this up).
The Court does some dancing with the law on the protectability of an “idea” per se, stating axiomatically that “ideas” of course are not protectable under any intellectual property concepts, except, of course, if you keep that idea secret and protect it from discovery by improper means. One can agree to that protection by contract, implied or otherwise, or in “an informal fiduciary relationship.” Here, the Court (in the context of evidence presented to the jury), reviewed how the parties did indeed proceed on the basis that the basic “idea” for a continuously adjustable spinal implant may have been conveyed, and then used to if nothing else, “spur” the Globus development.
Patent Law permeates the case where the Globus attempted to try to parse out details of the commercial product from the “idea” conveyed by the plaintiff—“we didn’t use certain features, therefore we didn’t use the trade secret.” The Court noted that for liability, you don’t have to use everything, as in a patent claim: “”[u]se does not require that a party use another’s trade secret in the form in which it received it.”
Patent Law then again materialized in damages. Dr. Bianco was awarded a royalty, both as to past and then going forward, but no injunction. This is very much a result of current Federal Circuit jurisprudence (our national Patent Appeals Court). Dr. Bianco wanted a disgorgement of profits, but the jury, and then post-hac the Judge, concluded that a reasonable royalty was really the measure of damages, largely based upon industry comparative licenses for use of developments by doctors in similar circumstances.