When it comes to protecting intellectual property, inventors have two main options: to keep their inventions as trade secrets or to patent them. Both options have their advantages and disadvantages, and the choice ultimately depends on the nature of the invention and the goals of the inventor.
A trade secret is any confidential information that provides a business with a competitive advantage. Examples of trade secrets include customer lists, formulas, processes, and designs. Trade secrets are protected by keeping the information secret and limiting access to it. Trade secret protection can last indefinitely as long as the information remains confidential.
Patenting an invention, on the other hand, grants the inventor a monopoly over the invention for a limited period of time. In exchange for this monopoly, the inventor must disclose the details of the invention to the public. This disclosure allows others to learn from the invention and build upon it once the patent expires. Patents typically last for 20 years from the date of filing, and after that, the invention enters the public domain.
So, when should an inventor choose trade secret protection over patent protection, and vice versa? Let’s take a closer look at the pros and cons of each option.
Trade secrets can be advantageous when:
- The invention is difficult to reverse engineer: If the invention is difficult to reverse engineer, then trade secret protection may be a good option. For example, a recipe for a food product may be difficult to reverse engineer, making it a good candidate for trade secret protection.
- The invention has a short commercial lifespan: If the invention is likely to become obsolete quickly, then trade secret protection may be a good option. For example, if a company develops a new smartphone app that is likely to be replaced by a newer, better app in a few years, then trade secret protection may be more appropriate than patent protection.
- The invention is related to a company’s core business: If the invention is related to a company’s core business and provides a competitive advantage, then trade secret protection may be a good option. For example, a soft drink company may choose to keep the formula for its signature drink as a trade secret.
Patents can be advantageous when:
- The invention is difficult to keep secret: If the invention is difficult to keep secret, then patent protection may be a better option. For example, a new machine that is large and visible would be difficult to keep secret, making it a good candidate for patent protection.
- The invention is likely to be copied: If the invention is likely to be copied, then patent protection may be necessary. For example, a new drug may be copied by other companies if it is not patented, making patent protection necessary to recoup research and development costs.
- The inventor wants to license or sell the invention: If the inventor wants to license or sell the invention to others, then patent protection may be necessary. Without patent protection, others could copy the invention and sell it without paying the inventor.
In conclusion, the decision to keep an invention as a trade secret or to patent it depends on various factors. Both options have their advantages and disadvantages, and the choice ultimately depends on the nature of the invention and the goals of the inventor. If the invention is difficult to reverse engineer, has a short commercial lifespan, or is related to a company’s core business, then trade secret protection may be a good option. If the invention is difficult to keep secret, is likely to be copied, or the inventor wants to license or sell the invention, then patent protection may be necessary. Ultimately, it is important for inventors to carefully consider their options and seek the advice of a qualified intellectual property attorney.