## Facts

- Harshaw Chemical Co., a division of Kewanee Oil Co., researched synthetic crystal growth for radiation detection and developed proprietary processes for crystal growth, encapsulation, and raw-material purification.
- Harshaw treated certain process information as trade secrets and required employees to sign nondisclosure agreements.
- Former Harshaw employees left and helped form or join Bicron Corp., a competitor that soon achieved similar crystal-growing results.
- Kewanee alleged Bicron’s success resulted from misappropriation of Harshaw’s trade secrets by the former employees.
- The federal district court, applying Ohio trade secret law in a diversity action, found misappropriation and entered a permanent injunction barring use or disclosure of specified trade secrets until they became public or were lawfully obtained.

## Issues

1. Whether the federal patent laws preempt state trade secret law when the asserted trade secrets concern subject matter that may be patentable.
2. Whether enforcing Ohio trade secret remedies for misappropriation conflicts with federal patent objectives of disclosure and preserving the public domain.

## Decision

- The Supreme Court reversed the Sixth Circuit and held that federal patent law does not preempt Ohio trade secret law.
- The Court upheld state authority to protect trade secrets so long as state law does not conflict with federal patent policy.
- The Court found no impermissible conflict because trade secret protection targets improper acquisition or breach of confidence and does not bar independent discovery or reverse engineering.
- The Court concluded that trade secret protection does not withdraw material from the public domain; protection ends when information becomes publicly available by lawful means.
- Justice Douglas dissented, reasoning that strong state protection over unpatented subject matter risks restricting what should remain free for copying absent a valid patent.

## Legal Principles

- State trade secret law is not preempted by federal patent law absent a direct conflict with federal patent objectives or rules.
- Trade secret protection is compatible with the patent system because patents offer a disclosure-for-limited-exclusivity bargain, while trade secrets provide conditional protection against wrongful acquisition or disclosure.
- Trade secret law does not prohibit independent invention, accidental disclosure, or reverse engineering; it protects only against misuse of confidential information or other improper conduct.
- Preserving the public domain is not impaired by trade secret law because only information not publicly available is protected, and protection ceases upon lawful public disclosure.
- The patent system does not require inventors to seek patents; choosing secrecy over patenting does not itself frustrate federal patent policy.

## Conclusion

The Court held that enforcing state trade secret remedies for misappropriation does not conflict with federal patent law, because trade secret protection operates as a limited, conduct-based restraint that leaves room for lawful discovery and keeps the public domain free once information becomes publicly available.


Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974)