Addressing the boundary between patent disclosures and trade secret protection, the US Court of Appeals for the Federal Circuit reversed a jury’s findings of trade secret misappropriation, breach of contract, and improper inventorship, concluding that the asserted “trade secrets” were generally known and therefore not protectable under California law. The Court affirmed, however, a $1 million statutory damages award for trademark counterfeiting. International Medical Devices, Inc. v. Cornell, Case Nos. 25 1580; 1605 (Fed. Cir. Apr. 17, 2026) (Dyk, Reyna, Taranto, JJ.)
International Medical Devices, Menova International, and Dr. James Elist (collectively, the plaintiffs) manufacture and sell the Penuma® cosmetic penile implant. The plaintiffs sued Dr. Robert Cornell and associated individuals and entities after Cornell attended a Penuma® surgical training session under a nondisclosure agreement (NDA) and later helped develop a competing implant. The plaintiffs asserted claims for misappropriation of trade secrets, breach of the NDA, trademark counterfeiting based on unauthorized use of the Penuma® mark, and invalidity of two cosmetic implant patents for failure to name Elist as an inventor.
A jury found for the plaintiffs on all claims. After a bench trial on remedies, the district court awarded more than $17 million in trade secret and exemplary damages, entered a permanent injunction, and awarded $1 million in statutory damages for counterfeiting. Cornell appealed.
The Federal Circuit reversed the trade secret verdict in its entirety, concluding that none of the asserted trade secrets were protectable under California law. The Court concluded that the alleged technical trade secrets were disclosed in publicly available patents and thus were “generally known” as a matter of law.
In doing so, the Federal Circuit reaffirmed the long-standing principle that “that which is disclosed in a patent cannot be a trade secret.” Once information enters the public domain through patent disclosures, it cannot later be reclaimed as confidential business information through trade secret law.
The plaintiffs’ remaining alleged trade secret (a list of surgical instruments) fared no better. The Federal Circuit found that the list had been emailed to the defendants without any confidentiality designation or obligation, defeating any claim that reasonable measures were taken to maintain its secrecy.
Because the plaintiffs failed to identify any confidential information beyond the alleged trade secrets, the Federal Circuit also reversed the breach of contract verdict. The NDA expressly excluded information that was “generally available to the public,” and the Court found that an NDA cannot transform public domain information into protected confidential material.
The Federal Circuit reached a different conclusion on trademark counterfeiting, however, and affirmed the jury’s finding and the $1 million statutory damages award. The Court explained that the evidence showed that Cornell had advertised and offered Penuma® implants without authorization. Cornell argued that the Penuma® mark was registered only for goods, not services, and therefore could not support a counterfeiting claim tied to surgical procedures. The Court rejected that argument, concluding there was sufficient evidence that Cornell offered the Penuma® implant itself as a good, not merely a medical service.
Finally, the Federal Circuit reversed the jury’s finding that two cosmetic implant patents were invalid for improper inventorship. Elist’s alleged inventive contributions were the same three ideas asserted as trade secrets. Having already determined that those ideas were generally known in the prior art, the Court determined they could not constitute the “significant contribution to conception” required for inventorship. The Court also noted that the United States Patent & Trademark Office allowed the claims only after amendments added limitations not allegedly contributed by Elist, further undercutting the inventorship challenge.
Practice note: The decision offers a clear reminder that public disclosures, particularly in patents, can permanently foreclose trade secret protection, and that inventorship claims cannot be revived by reframing generally known ideas as confidential know how.
