This discussion is getting a bit muddled because several different, but related, issues are being discussed.
Skybuck originally set up a scenario in which - a manufacturer was secretly producing some product which used technology Z before a patent describing technology Z was filed; and then - the inventor sues manufacturer for patent infringement. (a) The manufacturer's defense is that he was producing / selling the products well before patent application; or (b) The manufacturer argues the patent is invalid because long before the patent application was filed he was selling products secretly using this technology.
Starbuck asked would win this lawsuit the inventor/patent holder or the manufacturer? The trivial answer is - there's no way to know until the judge or jury rules.
In order to give a more considered answer more facts are needed. - In the scenario the "manufacturer was producing some product which used technology Z". Is Z a process or a material? If Z is a process, is it a method of doing business? - The patent describes technology Z. Does it claim technology Z? - Do all the acts in this scenario take place within the United States?
First, if the patent only describes but does not claim "Z", then there is no infringement.
Now, addressing question (b): If the technology is a process secretly conducted by the manufacturer and maintained as a trade secret, then the use of the technology generally does not constitute prior art. See
35 USC 102, the list of prior art includes (i) known or used by others, (ii) patented, (iii) published, (iv) on sale, and (v) patent application filed. Clearly ii, iii, and v do not apply in this scenario. Regarding (i), the courts have ruled that a properly maintained trade secret is not considered "known or used by others." (iv) is a bit more tricky, but again so long as the public has no access to the technology, it should not be considered prior art. So manufacturer's defense (b) should not prevail. Of course if the "technology" escapes the four walls of the manufacturer the situation is entirely different.
Now, regarding question (a): generally, in the United States, prior use is not a defense to infringement. There is an exception however.
35 US 273 specifically provides an exemption for a method of doing business:
It shall be a defense to an action for infringement with respect to any ... [business] method in the patent being asserted against a person, if such person had ... reduced the subject mater to practice at least 1 year before the ... filing date of the patent... and commercially used the subject mater before the filing date of the patent.
So, if the "technology" is a business method, the prior use defense might work. I am not aware of case law defining "business method." The exception has only been in the law for about 5 years.
None of the foregoing should be construed as legal advice; it just a general discussion of patent law.
Richard Tanzer patent agent