PATENTS VS. TRADE SECRETS: BATTLE OF THE STRATEGY

Patents and trade secrets provide two different approaches that can be utilized to protect your invention.  While patents require public disclosure of features of the invention to obtain, trade secrets have the exact opposite requirement- secrecy.  Patents are typically considered to provide a stronger form of protection, but there are various situations in which trade secret protection may be preferable.

 So, how does one decide which protection to seek?  Consider the following before making your decision:

What is the invention?

Patentable subject matter includes new, non-obvious, and useful processes, machines, articles of manufacture, and compositions of matter.  If the invention does not meet these requirements, then trade secret protection may be preferred. Also, will a patent provide strong enough protection for the invention? Or, are there easy ways to design around the product that could not be protected by the patent?  This is important in determining whether a patent will be commercially valuable.

 Is the invention reverse-engineerable?

Typically, the conventional rule of thumb is that if the invention is reverse-engineerable,  (i.e. if somebody who is legally in possession of the product could figure out how to make it), or if the invention may be independently developed, then patent protection should be pursued.  Other considerations include determining who is able to obtain the technology, whether the invention is detectable in the product, and how one would be able to detect an infringing product.  Still another consideration is whether the invention is actually part of an internal manufacturing process rather than in the commercial product.

Is 20 years enough time for protection?

Patent protection lasts about twenty years. After that, the patent becomes in the public domain.  If the technology has applicability longer than 20 years, trade secret protection may be preferred.

What is the cost versus the benefit?

Patent protection is decidedly more expensive than trade secret protection, which does not require any formal filing with a government agency.  However, internal measures should be taken to ensure secrecy of the trade secret which will result in some added cost to the company, such as the costs incurred in securing systems and manufacturing facilities.  Both trade secret protection and patent protection may have litigation costs, which may be unpredictable.  Still another consideration is that the strength of patents can be a swinging pendulum based on court decisions that strengthen or weaken issued patents.

Both patents and trade secrets provide value to a business.  However, due to changes in the law and in modern business practices, deciding whether to file a patent or maintain an invention in trade secrecy is now a more complex analysis as there is risk in both protection approaches.  Accordingly, an intellectual property attorney should be consulted.

At Renner Otto, we have experienced attorneys who are able to develop creative strategies to protect innovation.  Please feel free to contact us to assist with your innovation.