Category: Patent

Posted on

Patent Drafting: The Written Description Requirement

US6906700_fig12Anascape sued Nintendo alleging that Nintendo’s game controller infringed U.S. Patent 6,906,700 (the ‘700 patent). Nintendo challenged the ‘700 patent asserting that it did not comply with the written description requirement of 35 USC 112.

The written description requirement provides the “that specification [of the patent/patent application] shall contain a written description of the invention, and of the manner and process of making and using it…”

The claims of the ‘700 patent were directed to a controller that received multiple inputs that were together operable in six degrees of freedom. But, the ‘700 patent was issued from a continuation application that claimed priority to a prior parent application (that became U.S. Patent 6,222,525 (the ’525 patent)). The ‘525 patent only disclosed a single input member (controller) capable of movement in six degrees of freedom. The ‘525 patent repeatedly referenced (over twenty times) the input member as a single input member. It also disparaged the prior art devices having multiple input members.

The court concluded that the ‘525 patent did not disclose multiple input members, but rather only a single input member. Therefore, the ‘700 patent failed to meet the written description requirement for multiple inputs to obtain the benefit of the filing date of the ‘525 patent.

Intervening prior art existed between the filing of the ‘525 patent and the filing of the ‘700 patent. Therefore, without the benefit of the earlier filing date of the ‘525 patent, the claims of the ‘700 patent were invalid and Nintendo avoided infringement.

Given the repeated use of “single input member” and the disparagement of multiple input members, it appears that the original ‘525 patent was intended to be limited to only a single input member. That is, it was not a drafting error that a variation of the invention with multiple input members was omitted.

Nevertheless, this case demonstrates why when drafting a patent application, it is important to account for multiple variations of the invention. You should think about what components can be multiplied and describe those in a manner that can account for such versions of the invention. The use of exclusively restrictive language like “single” or “only one” may confine a patent resulting on your invention.

The written description requirement is separate, and arguably more stringent, than the enablement requirement. Further, the courts have been strict in asserting that it is not enough to assert that claimed variation is obvious in light of what was disclosed. Rather, to be safe, the variations should be clearly explained in the description.

Citation: Anascape, Ltd. v. Nintendo of Am., Inc., 601 F.3d 1333 (Fed. Cir. 2010)

Posted on

Divided Infringement: When Acts of More Than One Party Are Necessary to Meet All Elements of the Claim

US7021537Divided infringement occurs when no one party actually performs all of the steps of a patent claim. For example, one party performs some of the steps and another party performs the remaining steps. One way to solve this problem is to draft patent claims such that one party will likely perform all of the claimed steps.

However sometimes its not easy to do so given the prior art. Take David Tropp’s patent no. 7,021,537 for example. That patent is directed to a method of improving airline luggage inspection through he use of dual access locks.  Claim 1 of the ‘537 patent provides the following general steps (a) providing locks to customers that have two means of opening: a combination lock portion and a master key lock portion, and (b) using the master key to open the lock during luggage screening.

In the case of Travel Sentry Inc. v. Tropp, No. 2016-2386 (Fed Cir. 2017), Travel Sentry provided on behalf of itself or through licensees the locks according to step (a). But the TSA performs step (b). The question is whether the TSA’s acts of opening the locks with a master key are attributable to Travel Sentry, such that Travel Sentry is liable for infringement. The court found that a reasonable jury could  answer that question in the affirmative.

I suspect that there was probably prior art showing locks having to means of opening so that Tropp needed the claimed method to include the step of opening the locks during luggage screening to have a novel method over the prior art and obtain the patent.

Travel Sentry entered into a memorandum of understanding with the TSA which provides that the TSA “will make good faith efforts to distribute the passkeys and information provided by Travel Sentry on the use of the passkeys, and to use the passkeys to open checked baggages secured with Travel Sentry certified locks…”

The court found that a common thread in its case law on whether steps actually performed by a third party can be attributable to the defendant was whether there exists “evidence that a third party hoping to obtain access to certain benefits can only do so if it performs certain steps identified by the defendant, and does so under the terms prescribed by the defendant.”

The court found that a reasonable jury could find that TSA receives a benefit from being able to identify Travel Sentry-marked luggage and, where necessary, open that luggage using passkeys that Travel Sentry provided.

Ideally, patent claims are drafted such that one party will perform all the steps. When that is not the case, however, the Travel Sensory case clarifies and likely expands the circumstances where it is possible to show that the acts of another are attributable to the defendant so that the defendant can be charged with all steps of the claimed method.

Posted on

Patent Drafting: Enabling Skilled Person to Make and Use the Invention

USPatent5231253_Fig3Automotive Technologies International (ATI) sued numerous vehicle and parts manufacturers including BMW and Delphi Automotive Systems for infringing US patent 5,231,253 on side impact crash sensors for deploying an air bag. The court of appeals determined that the patent was invalid for failing to enable the claimed invention in Auto. Techs. Int’l, Inc. v. BMW of N. Am., Inc., 501 F.3d 1274 (Fed. Cir. 2007).

The law requires that your patent application describe your invention to such a level of detail so as to enable one who’s skilled in the art to  make and use the invention, without undue experimentation. This is known as the enablement requirement. The relevant statute states that every patent must describe “the manner and process of making and using [the invention], in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the [invention].” 35 USC 112.

This is part of the patent bargain. You tell the world how to make and use the invention and the government grants you a limited monopoly.

It is not uncommon for an inventor to leave out details of the invention that he/she thinks are well known in the art. But you want to draft a application that is well within the knowledge of one skilled in the art area and no where near the boundary of what one skilled in the art knows. Therefore, you often want to explain concepts and details that one skilled in the art already knows. When in doubt, provide more detail.

This is true because when an inventor chooses to rely upon general knowledge in the art to render his/her disclosure enabling, the inventor bears the risk on this issue of whether those of ordinary skill in that can be expected to possess or know where to obtain this knowledge. In re Howarth, 654 F.2d 103 (CCAP 1981).  “To avoid the risk, [he/she] need only set forth the information in his specification…” And you should want to avoid this risk, as the ATI case demonstrates.

In the ATI case, the patent disclosed two impact crash sensors, one was a mechanical sensor and the other was an electronic sensor. The patent described the mechanical sensor at length (figure 1). But it only provided one short paragraph and one “conceptual” drawing (figure 11) about the electronic sensor. The court found the thin disclosure of an electronic sensor was not sufficient to inform one skilled in the art how to make the invention with the electronic sensor. Since the claims were broad enough to cover both mechanical and the non-enabled electronic sensors, all of the patent claims were found invalid.

USPatent5231253_Fig1

USPatent5231253_Fig11

The description of the electronic sensor in the patent failed to disclose a structure or circuitry  for the sensor. The court found that ATI could not rely on prior art knowledge of front electronic impact sensors because ATI stated that the novel aspect of the invention was the side impact sensor. The court said, “given that the novel aspect of the invention is a side impact sensor[], it is insufficient to merely state that known technologies case be used to create an electronic sensor. Moreover, there were no electronic sensors in existence to detect side impact crashes at the time the application was filed.

Also, the court stated electronic sensors are of the same class of technology as mechanical ones: “Electronic side impact sensors are not just another known species of genus consisting of sensors, but are a distinctly different sensor compared with the well-enabled mechanical side impact sensor [described]…”

As the ATI case demonstrates, it is best not to get close to the line between what is and is not enough detail to enable a person skilled in the art to make and use your invention. Instead you should spend the time to provide the level of detail, with respect to each variation of the invention, so there can be no question. And that often involves describing details known to one skilled in the art.

Posted on

LEGO Patent Demonstrates Why Your Patent Application Should Describe Alternative Versions of the Invention

LEGO_Fig4

To protect an invention broadly, a patent application should describe alternative versions of the invention. When developing an invention it may be that several variations of the invention or a component of the invention are considered before a final version is settled on for production.

You often have a better chance of obtaining broad patent protection if those unused variations of the invention are included in the application along with the final version.

The LEGO Patent and Alternatives

The patent on the LEGO building block toy (U.S. Patent No. 3,005,282) provides a good example. The patent includes not only the iconic block that many recognize, shown at the top of this post. But it also includes six other versions that I have not seen on the market and may not ever have been on the market. Figure 1 shows a version that only has a top plate 10 and no sidewalls 12.

LEGO_Fig1

 

Figure 8 shows an alternative block having two internal projections 22 rather than three shown in figure 4.

LEGO_Fig8

Figure 9 shows an alternative block having X-shapped projections 23 rather than circle shaped projections 22 shown in figure 4.

LEGO_Fig9 Figure 10 shows an alternative block having somewhat star-snapped projections 24.

LEGO_Fig10

Figure 11 shows an alternative block having multi-component projections 25 that appear similar to the projections 24 of figure 10 but with the corner curved portions removed.

LEGO_Fig11

Figure 12 is an alternative block comprising a square shape rather than a rectangle shape and having one projection 22.

LEGO_Fig12

How Disclosure Impacts Patent Scope

Claim 4 of the LEGO patent is directed to a toy building block having “…at least one secondary protuberance extending from said inner face of said bottom wall…” The secondary protuberance is a general reference to the projections that extends below the plate 12, such as projections 22.

However because the patent described many alternative styles of such projections 22, 23, 24, 25, the “secondary protuberance” in the claim would not be limited to cylindrical or circular projections 22 shown in figure 4. Instead, the term “secondary protuberance” should be given a broader meaning to cover different shapes and types of protuberances.

However, it is possible that if the LEGO patent only included cylindrical projections that the claims might be limited to projections of that shape. See my discussion of Tronzo v. Biomet, Inc., 156 F.3d 1154 (Fed. Cir. 1998) for more on this point.

Further, as the patent discloses versions of the block with different numbers of projections, e.g 1, 2, and 3 projections, the patent was able to claim the broader “at least one secondary projection” rather than being limited to “three secondary projections” that are shown in the well known version of the block. In that way, a competitor cannot get around the patent by using 2 or 4 projections to avoid a “three secondary projections” limitation. Instead the use of 2 or 4 projections would be covered by the “at least one secondary projection” limitation of the claim.

Your patent application should probably follow the lead of the LEGO patent in providing alternative versions of your invention. This gives you a better opportunity to get broader protection on your invention and it blocks your competitors from patenting the alternative versions of your invention.

Posted on

Four Finger Glove Design Patent NonInfringement Suit

Contraband Sports LLC sells workout products, including its gloves for use in weight lifting. Fit Four LLC sent a notice of intellectual property rights violation to Amazon alleging the Contraband’s gloves infringed Fit Four’s Design patent D652,607 (the ‘607 patent). This resulted in Amazon taking down Contraband’s gloves from Amazon, “during the busy holiday season and less than one week before Christmas.”

Contraband filed suit for declaratory judgement that its gloves do not infringe the ‘607 patent. The complaint asserted the following differences, among others, between its glove and the ‘607 patent:

Contraband_Complaint1

The ‘607 patent provides mostly plain surfaces on the front and back of the glove. Contraband’s gloves includes a number of design features that are absent from the ‘607 patent.

The ordinary observer test is applied in design cases to determine whether the accused design is substantially similar to the patented design and therefore infringes. The test provides: “if, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other.” International Seaway Trading Corp. v. Walgreens Corp., 589 F.3d 1233 (Fed. Cir. 2009). Also, “‘when the claimed design is close to the prior art designs, small differences between the accused design and the claimed design are likely to be important to the eye of the hypothetical ordinary observer.”

A quick review of the patents cited in the ‘607 patent reveals the following prior art US Patent 1,954,262 directed to a four finger glove for golf:

US1954262

This golf glove has a distinct angled bottom edge that nether the ‘607 patent nor the Contraband glove have.

The hook and loop (VELCRO) strap, shown above, stands out in comparing the ‘607 patent and the Contraband glove. It is probably one of the biggest things standing in the way of a conclusion that Contraband’s glove and the ‘607 patent are substantially the same.

Contraband likely wants it’s products back on Amazon. It might file a motion for preliminary injunction to get a early ruling for that purpose. Nevertheless, there’s almost no time to get relief before Christmas for holiday sales purposes. Therefore, it may need to rely on its pursuit of damages in this case if it ultimately succeeds in showing non-infringement.

Citation: Contraband Sports LLC v. Fit Four LLC, No. 1-17-cv-24615 (S.D.Fl 2017).

Posted on

How to Find a Competitor’s Patents or Patent Applications – Part 2

Each patent application generally must name the inventor(s) of the subject matter of the patent application. Therefore, one way to find your competitor’s patents or patent applications is to know the inventor name(s) on the patent or patent application.

But, unlike inventors, patent owners do not necessarily have to be identified on or in a patent application. So searching for patents or patent applications by inventor name may give you a better chance of finding relevant results than does searching for a patent owner or assignee.

The challenge is to identify the name or names of the possible inventor(s) at a competitor, assuming that the competitor is a business entity, such as a corporation or LLC. Below are a few places to look.

Secretary of State Corporate Records

It is possible that the inventor is the owner or officer of the company, particularly if the company is small or medium sized. To discover the officers of a company, you can look at the corporate filing with the secretary of state (or equivalent) in the state where the company is incorporated. Corporate officers or members/managers of an LLC may be named in the articles of incorporation or formation or in annual reports filed by the corporation or LLC. Many times, these documents may be downloaded from the secretary of state website for free or for a small fee.

Trademark Filings at the USPTO

If the company has filed to register a trademark with the United States Patent and Trademark Office (USPTO), it is possible that an officer has signed documents filed in connection with that application. Therefore, you can search the USPTO for your competitor’s trademark applications or registrations. Then you can look at the file history of those applications/registrations to see who signed the relevant filed documents. Sometimes this doesn’t work because an attorney can sign the required documents on behalf of the applicant. So it could be that no officers are identified in the file history of a trademark application.

Websites

You can check the competitor’s website to see if it identifies persons that could be inventors.

These are some ways to identify possible inventors. For more ways to find competitor patents read my prior post on this topic: How do I find my competitor’s patents or patent applications?

Posted on

Convinced by Patent Pending or Will They Search Before Licensing Your Invention?

When you approach a potential purchaser or licensee of your invention, the potential purchaser or licensee might do their own research to determine whether they think you are likely to obtain a patent. They can do that in the same way that you can do it, by performing a novelty search on your invention.

Consider again the case of Penalty Kick Management v. Coca-Cola Company, 318 F.3d 1284 (11th Cir. 2003), which I discussed yesterday. Penalty Kick Management (PKM) wanted to license its Magic Windows invention to Coca-Cola. And Coca-Cola was interested to the point of proposing to pay PKM $1 million plus a per label royalty for an exclusive global license. Not bad.

The Magic Windows invention consisted of “a scrambled message on the inside of a beverage container label which could be decoded and read only after the beverage container was emptied. The message would be read through a colored filter printed on a label on the opposite side of the container, directly across from the coded message.”

USPatent_5953170

But before signing the global license, Coca-Cola did a patent search on PKM’s patent applications directed to the Magic Windows invention, “to determine, inter alia, whether PKM could actually provide Coca-Cola with exclusivity over the concept embodied in Magic Windows.”

In the search, Coca-Cola found a copy of international patent application WO9309525 (“Virtual Image patent application”) filed before PKM’s patent applications. The Visual Image patent application “revealed that the two main concepts of Magic Windows – using a colored filter to decode a disguised message and placing the filter on the side of a bottle label opposite the coded message, already existed in prior art.”

Based on the Visual Image patent application, Coca-Cola concluded that the Magic Windows concept was in the public domain. It further concluded that PKM could not provide the patent exclusivity Coca-Cola was seeking. It cut off negotiations on a license with PKM.

PKM ultimately obtained US Patent 5953170, “covering some, but not all, aspects of Magic Windows.” Apparently, the narrowed scope of this patent did not interest Coca-Cola.

Not every case will turn out like it did for PKM. Sometimes a companies will be interested in an invention regardless of its patent prospects. Sometimes a company will accept a license where there is a higher royalty rate if a patent is granted an a lower royalty rate if it is not. Further, not every company will conduct an intellectual property review.

Nevertheless, patent pending alone may not convince a diligent licensee who determines that you cannot get the protection they are looking for. That is to say, the value of patent pending may be proportional to the actual novelty of your invention, at least for licensees that do their homework.

Posted on

Why They Won’t Sign Your Nondisclosure Agreement

You want to pitch your invention to a company. Sure, its possible they won’t sign your Nondisclosure Agreement (NDA) because they want to steal your invention. But, how could they want to steal your invention if they know little or nothing about it?

Even if they know a little about the general subject area and are interested in learning more, there may be a less nefarious reason they won’t sign the NDA. And that reason arises from the old saying “the left hand doesn’t know what the right hand is doing.”

If you approach a larger company, the person or department you are talking to might not know what another person or department in the company is doing or has done in a particular technology space.

The left-hand-right-hand-saying above is generally a criticism (except in the biblical sense), but its not necessarily that the corporation is disorganized. It may simply be that the corporation does not want to deal with the administrative hassle of surveying the whole company every time an invention is submitted to determine whether someone or some part within the company is already working on this invention or has in the past.

Some companies will require that you have a patent application filed or a patent issued before they will talk to you. Why should the company take on the surveying hassle, particularly when they don’t even know enough about your idea to know whether they will like it? Some won’t and its not necessarily because they want to steal your idea. It is because they want to protect themselves from you accusing them of stealing the invention when they actually had it before they talked to you or received it independent of you.

Consider the case of Penalty Kick Management v. Coca-Cola Company, 318 F.3d 1284 (11th Cir. 2003). Penalty Kick Management (PKM) developed a beverage label marketing and production process known as “Magic Windows.” Magic Windows consisted of “a scrambled message on the inside of a beverage container label which could be decoded and read only after the beverage container was emptied. The message would be read through a colored filter printed on a label on the opposite side of the container, directly across from the coded message.”

USPatent_5953170

PKM wanted to license Magic Windows to Coca-Cola. The parties entered into a Non-Disclosure Agreement and PKM disclosed Magic Windows to Coca-Cola. Coca-Cola proposed to pay PKM $1 million plus a per label royalty for an exclusive global license. But, Coca-Cola did not enter into a license with PKM because Coca-Cola undertook an intellectual property review (a patent search) of the Magic Windows invention and determined that the Magic Windows invention was in the public domain.

Coca-Cola subsequently used the label in an Argentinian marketing promotion. And PKM sued for breach of the NDA, among other things.

However, Coca-Cola was able to show that in the same month it was talking to PKM, it asked another company, BrightHouse, to create a promotion for the upcoming 1996 NFL season. There was no indication that Coca-Cola gave Brighthouse PKM’s information. One of the ideas that BrightHouse subsequently presented was a Magic-Windows-like concept. Therefore, Coca-Cola received the invention independently from Brighthouse. Later, it received a magic-windows-like concept from ITW, Coca-Cola’s regular label printer, without the use of any of PKM’s information.

The NDA excluded information that was (1) “is rightfully received from a third party” or (2) Coca-Cola could “establish was subsequently developed independently by [Coca-Cola or its subsidiaries or affiliates] independently of any disclosure” by PKM, or (3) in the public domain. The court concluded that all three of these exceptions applied so that the NDA did not cover PKM’s Magic Window invention.

One can see how PKM–from the outside in the beginning–might think that Coca-Cola stole PKM’s invention. And companies that refuse to sign an NDA might simply not want to deal with such claims.

Posted on

The Case for Excluding Solely Oral Disclosures from Nondisclosure Agreement Coverage

“If the orally disclosed confidential information is important, then the disclosing party probably should confirm it in writing to protect itself from the hell of trying to prove a solely oral disclosure.”

Nondisclosure Agreements (NDAs) sometimes specify that the confidentiality obligations cover disclosures in any form, whether that be oral or written. On one level this make some sense. Why should it matter how I disclose it to you? If its confidential, you need to keep it secret.

However, practically, enforcing or defending an alleged breach of an NDA in connection with a solely oral disclosure can be difficult and expensive. Therefore, solely oral disclosures may be completely excluded from NDA coverage. However, it is more common to allow coverage of oral disclosures, but only if they are confirmed in writing to the receiving party within a certain amount of time after the oral disclosure. For example an NDA may provide:

“For an oral disclosure to be within the scope of the NDA, it must be designated confidential at the time of disclosure and followed by a written memorandum to the receiving party within twenty days of the oral disclosure clearly providing notice of what specific information was confidential.”

Why should coverage for oral disclosures be limited in this way?

Receiving Party’s Concerns

The receiving party should want the disclosing party to clearly explain what is confidential in writing. Memories are feeble. Can you remember exactly what was said in a meeting one year ago? Will everyone agree with your memory of what happened, particularly if there are financial incentives for the other party to remember something else?

The cost of defending disputes involving oral disclosures is likely to be high. Each person who was there when the oral disclosure occurred will likely have to be deposed and questioned about what happened. Such factual disputes will not be resolved quickly. Instead of all that, why not just create a written document which explains what was disclosed?

You might ask: Can’t we just rely on someone’s meeting notes? If they are not circulated to the other side close after the time of disclosure, the other side may question when they were created and whether they are accurate.

The requirement that the oral disclosures be documented and sent to the other side quickly, is likely to prompt early identification and, possibly, resolution of disagreements regarding what was disclosed. It allows the receiving party the opportunity to object that the written memorialization of the oral disclosure is inaccurate. Therefore, the receiving party should review such confirmatory memos closely to ensure they accurately reflect what was disclosed orally.

Allowing an NDA to cover solely oral disclosures increases the chance of disputes regarding what was disclosed. It also is likely to drive up the cost of defending a claim of NDA breach.

Disclosing Party’s Concerns

Doesn’t the disclosing party want to avoid providing limitations on what oral disclosures will be covered by an NDA? In theory, yes. But practically proving breach of an NDA based on an oral disclosure will probably be expensive and difficult.

If there were only two people in the room when the disclosure occurred, you and the other party. It will be your word against his or her. The classic he said vs. she said. And unless you are able to show some defect in the other party’s credibility related to the NDA, you will likely loose because you have the burden to show a breach.

If there were multiple people in the room and you get a lot of agreement from them on what happened, then you might have a better chance. However, you are still going to spend a lot of money in deposing and gathering evidence from each of them to prove your case.

Therefore, if the orally disclosed confidential information is important, then the disclosing party probably should confirm it in writing to protect itself from the hell of trying to prove a solely oral disclosure.

Couldn’t we keep solely oral disclosures covered by the NDA as a fall back and just plan to never rely on it? Yes, this might work if the other side will agree (i.e. they didn’t read this post) and you are only going to be the disclosing party and not the receiving party–that is, if the NDA is not a Mutual NDA.

Conclusion

Limiting solely oral disclosures from coverage by an NDA is generally beneficial to the receiving party. This is riskier for the disclosing party, but documenting confidential disclosures in writing is likely to help the disclosing party avoid disputes about what was disclosed and protect its confidential information.

Posted on

Problems with Nondisclosure Agreements: Lack of Subject Matter Limits

Can you send me a form Nondislcosure Agreement (NDA)? Lawyers get this question often. But, ideally you don’t want a form NDA, you want one or more NDAs tailored to the situations where they will be used.

People often sign NDAs without thinking too much about them. But not all NDAs are the same. And there are situations where an NDA can come back to bite you in ways you might not expect. Let’s look at the subject matter scope of an NDA.

Many form NDAs will have very broad definitions of what is considered confidential information that should not be disclosed. You might see something like:

Confidential Information shall mean any data or information that is competitively sensitive material and not generally known to the public, including, but not limited to, information  relating to any of the following: product development, inventions, product plans, marketing strategies, documentation, reports, data, database, customer lists, customer relationships, customer profiles, business plans and results relating to past, present or future business activities.

This provision provides no limitation on the subject matter that is confidential. That is, it does not limit the confidentiality obligations to a particular technical field or product.

The lack of a subject matter limitation could be a problem if the other party to the NDA starts disclosing confidential information to you in a field that you have an interest in entering. If so, that party might effectively block you from entering a given field merely by disclosing confidential information directed to that field or product. This problem can be avoided by providing field or product subject matter limitations in the NDA.

Take, for example, the case of ConFold Pacific, Inc. v. Polaris Industries, 433 F.3d 952 (7th Cir. 2006). Polaris hired Confold to conduct a reverse logistics analysis of Polaris’ shipping needs to determine how best to deal with goods returned by customers. This was conducted under an agreement titled “Mutual Non-Disclosure Agreement–Logistics Consulting Version.”

After the agreement was signed Polaris requested proposals, from Confold and 8 other firms, for designs of returnable shipping containers to replace its disposable shipping containers. Polaris did not accept any of the proposals. But a few years later Polaris designed a returnable container and began having it manufactured by another firm.

ConFold sued Polaris for breach of the NDA alleging that Polaris’s returnable container was based on the container that ConFold submitted. But the court found that, among other things, (1) the NDA title suggested that the scope of the NDA was confined to reverse logistics analysis, and (2) that the limiting language of the NDA of “ConFold has information relating to its proprietary software systems, documentation, and related consulting services which it considers to be proprietary,” and “software systems, documentation, and related consulting services” referred to the reverse logistics analysis itself. The court concluded that the language of the NDA limited the confidential subject matter to the reverse logistics consulting. And, the returnable shipping container design was outside of that scope.

Further, evidence showed that ConFold had a form NDA “specific for design” but it did not ask Polaris to sign it.

If Polaris signed an NDA without any subject matter limits, it could have been on the hook to ConFold for the returnable shipping container design. This probably was not what Polaris intended when it hired ConFold for the reverse logistics consulting.

Providing subject matter limits in an NDA is an important step to prevent the NDA from covering subjects that you didn’t intended to cover and from blocking your future product development or business efforts.