Generally, reverse engineering is allowed under federal trade secret law, the Defend Trade Secrets Act (DTSA). The Texas Uniform Trade Secret Act, for example, defines reverse engineering as the process of studying, analyzing, or disassembling a product or device to discover its design, structure, construction, or source code.. Her practice focuses on patent and trade secret litigation with an emphasis on software, network and internet technologies. When performing reverse engineering, however, it is critical to be aware of the contractual obligations and rights from purchase, end user license, and other agreements that may impact the scope of permissible reverse engineering. Ms. Prescott has experience before U.S. district courts nationwide and she has handled all aspects of litigation, including pre-suit Qiuyi (Autumn) Wu is a litigation associate in the Boston office of Fish & Richardson P.C. Reverse engineering refers to the process of working backward from an available product to understand what its parts are, how it functions and/or how it was made. DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. There, the court found that private parties may not expand the statutory definition of improper means under California trade secret law to include reverse engineering. In that case, the defendant gave a device embodying the alleged trade secret to a third party to reverse engineer in violation of the defendants duty of confidentiality to the plaintiff. Her practice focuses on patent litigation across a wide range of technologies, primarily in the fields of biotechnology, life sciences, and mechanical arts. The United States Supreme Court has ruled that state trade secret laws may not preclude discovery by fair and honest means, such as reverse engineering. Yes. The United States Supreme Court has ruled that state trade secret laws may not preclude discovery by fair and honest means, such as reverse engineering. For example, a Texas court found that an alleged breach of an agreement that required defendant to maintain the confidentiality of and not reproduce the technology-in-dispute was sufficient to maintain a trade secret misappropriation claim under Texas law. A California court, on the other hand, handled a similar situation differently. Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 476 (1971). The Texas Uniform Trade Secret Act, for example, defines reverse engineering as the process of studying, analyzing, or disassembling a product or device to discover its design, structure, construction, or source code.. The DTSA prohibits misappropriating trade secretsthis means acquiring trade secrets by improper means, such as theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means. The DTSA explicitly declares that reverse engineeringby itselfis not an improper means. But, reverse engineering combined with an improper means will violate the DTSA. In denying the motion to dismiss the trade secret misappropriation claim, the court recognized that reverse engineering is only a proper means if it is not prohibited, including by a contract. The Supreme Court further confirmed the legitimacy of reverse engineering in Bonito Boats, Inc. v. Thunder Craft Boats, Inc., where it held that the public at large remained free to discover and exploit the trade secret through reverse engineering of products in the public domain or by independent creation. 489 U.S. 141, 155 (1989). While reverse engineering in violation of an End User License Agreement could be the basis for a breach of contract claim, it could not be the basis for a trade secret misappropriation claim. California explicitly recognizes reverse engineering or independent derivation alone shall not be considered improper means. Similarly, in Texas, reverse engineering unless prohibited is statutorily defined to be a proper means of obtaining information. Contract provisions imposing obligations not to reverse engineer or restricting the purpose for which reverse engineering can be performed are generally enforceable. Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 476 (1971). And different states may view reverse engineering contract provisions differently, which may in turn affect claims for misappropriation of trade secrets. For example, if. Generally, reverse engineering is allowed under federal trade secret law, the Defend Trade Secrets Act (DTSA). 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Generally, reverse engineering is allowed and will not violate trade secret laws by itself. The DTSA prohibits misappropriating trade secretsthis means acquiring trade secrets by improper means, such as theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means. The DTSA explicitly declares that reverse engineeringby itselfis not an improper means. But, reverse engineering combined with an improper means will violate the DTSA. California explicitly recognizes reverse engineering or independent derivation alone shall not be considered improper means. Similarly, in Texas, reverse engineering unless prohibited is statutorily defined to be a proper means of obtaining information. The comments to the Uniform Trade Secrets Act, which most states have adopted in some form, recognize that it is lawful to conduct reverse engineering, provided that the analyzed product was obtained by a fair and honest means, such as purchase of the item on the open market.. Law Firms: Be Strategic In Your COVID-19 Guidance [GUIDANCE] On COVID-19 and Business Continuity Plans. While reverse engineering in violation of an End User License Agreement could be the basis for a breach of contract claim, it could not be the basis for a trade secret misappropriation claim. Is reverse engineering permissible under federal trade secret law? Contact the authors or visitFishs Intellectual Property Law Essentials. For example, a Texas court found that an alleged breach of an agreement that required defendant to maintain the confidentiality of and not reproduce the technology-in-dispute was sufficient to maintain a trade secret misappropriation claim under Texas law. In denying the motion to dismiss the trade secret misappropriation claim, the court recognized that reverse engineering is only a proper means if it is not prohibited, including by a contract. Can parties contract away the right to reverse engineer? Reverse engineering refers to the process of working backward from an available product to understand what its parts are, how it functions and/or how it was made. If a defendant conducts reverse engineering in breach of a contract, that activity may serve not only as the basis for breach of contract, but in some courts, as the basis for a trade secret misappropriation claim. Contract provisions imposing obligations not to reverse engineer or restricting the purpose for which reverse engineering can be performed are generally enforceable. Can parties contract away the right to reverse engineer? For example, if the product that was reverse engineered was stolen or obtained through lying, then there is still trade secret misappropriation. Is reverse engineering permissible under state trade secret laws? The DTSA explicitly declares that reverse engineeringby itselfis not an "improper means." But, reverse engineering combined with an "improper means" will violate the DTSA. The Supreme Court further confirmed the legitimacy of reverse engineering in Bonito Boats, Inc. v. Thunder Craft Boats, Inc., where it held that the "public at large remained free to discover and exploit the trade secret through reverse engineering of products in the public domain or by independent creation." 489 U.S. 141, 155 (1989). Yes. Crafting a Comprehensive Trade Secret Strategy, Recent Developments in Trade Secrets Damages, Webinar | Post-Grant for Practitioners: Post-Grant Appeals, Webinar | Successful Strategies for Patenting Bioinformatics and Computational Genomics. For example, if the product that was reverse engineered was stolen or obtained through lying, then there is still trade secret misappropriation. The comments to the Uniform Trade Secrets Act, which most states have adopted in some form, recognize that it is lawful to conduct reverse engineering, provided that the analyzed product was obtained by a fair and honest means, such as purchase of the item on the open market.. And different states may view reverse engineering contract provisions differently, which may in turn affect claims for misappropriation of trade secrets. There, the court found that private parties may not expand the statutory definition of improper means under California trade secret law to include reverse engineering. When performing reverse engineering, however, it is critical to be aware of the contractual obligations and rights from purchase, end user license, and other agreements that may impact the scope of permissible reverse engineering. More questions? Katie Prescott is a principal in the Silicon Valley office of Fish & Richardson P.C. Is reverse engineering permissible under state trade secret laws? Generally, reverse engineering is allowed and will not violate trade secret laws by itself. Is reverse engineering permissible under federal trade secret law? A California court, on the other hand, handled a similar situation differently. The . The Supreme Court further confirmed the legitimacy of reverse engineering in Bonito Boats, Inc. v. Thunder Craft Boats, Inc., where it held that the public at large remained free to discover and exploit the trade secret through reverse engineering of products in the public domain or by independent creation. 489 U.S. 141, 155 (1989). Build a Morning News Brief: Easy, No Clutter, Free! In that case, the defendant gave a device embodying the alleged trade secret to a third party to reverse engineer in violation of the defendants duty of confidentiality to the plaintiff. 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