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the most common type of patent, the invention must
be new, useful and nonobvious.

Nonobviousness usually is the most difficult require-
ment to establish during patent prosecution. There are
many patents related to the construction industry, in-
cluding construction processes, equipment, materials
and even business methods. Patent infringement litiga-
tion can be very expensive from both an attorneys’
fees perspective and a potential damages perspective.

Therefore, it is recommended that indemnification
and defense costs are handled contractually at the be-
ginning of the construction project. Note that the 2007
and 2017 versions of the AIA A102 and A103 provide
for the contractor to be reimbursed for costs associ-
ated with infringement in certain circumstances, but
the A101 does not.

Trade secrets
Trade secret issues also may arise in construction
projects and related business ventures. Trade secrets
can cover virtually any type of information that is not
generally known to the public, is economically valuable
to the owner, and is the subject of reasonable efforts
to maintain its secrecy. For example, trade secrets can
cover business or technical information, pricing infor-
mation, customer lists, construction methods, and pro-
cesses. Trade secrets are covered by state law, but most
states have generally similar laws. If you have informa-
tion of value that you want to protect under trade se-
cret law, it is recommended that you enter
confidentiality agreements and/or non-disclosure
agreements with each employee or entity who needs
to know the information. Once that information is pub-
licly known, trade secret protection ceases, and the
value of the previously-protected information dimin-
ishes. Jeff Reichard is a member of the
construction and intellectual property
practice groups in the Greensboro,
NC office of Nexsen Pruet, PLLC who
regularly practices at the intersection
of IP and construction. If you
have any questions about this
article, please email Jeff
at jreichard@nexsenpruet.com.

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nexsenpruet.com The North Carolina Construction News — March-April 2018 — 5