When is it appropriate to apply for a patent for inventions? And when should you instead preserve the invention as a trade secret? We have prepared an overview of the most important things you should think about in this regard.
The first thing you should think about is what kind of invention it is. Patenting is only applicable for technical solutions to technical problems. Protection of, for example, business plans, ideas and discoveries must instead be sought through trade secret protection.
Furthermore, you should think about how ground-breaking the invention is. Patenting requires that the invention is new and that it differs significantly from what is known before, so-called “invention height”. For trade secret protection, it is sufficient that the invention is not publicly known and that it is commercially valuable / gives you a competitive advantage as long as it is kept secret.
In addition, you should think about how easy it is to keep the invention a secret. The trade secret protection is not particularly suitable for, for example, inventions that can be derived through so-called “reverse engineering” of a product. If the invention is to be put on the market, patenting can therefore in many cases be the only protection option.
If you choose to patent an invention, the patented technique is made available to the public. The publication increases the risk of competition from legal alternative solutions. By choosing secrecy, you avoid this risk. With secrecy, on the other hand, you risk someone revealing the invention, either by so-called “reverse engineering” or by leaking information. For that reason, secrecy can be perceived as more uncertain that patent protection.
This is related to the need for predictability and control. The advantage of a patent is that, through the application process, you get the patent authorities’ assessment of whether you actually have an exclusive right, and if so, what you have an exclusive right to. As a rights holder, you then know your rights before any intervention takes place. In the case of secrecy, the question of protection only arises after the secret has come into the hands of others. At the same time, anyone is free to challenge a registered patent, for example by claiming that the invention does not have sufficient novelty or “invention height”. So, there is no guarantee.
You should also think about the need to be able to sell, license out and pledge the invention. It is easier to sell a patent right. Too wide a spread of an invention will quickly lead to the secret being “blown” and thus losing its protection as a trade secret. Unlike patents, it is not possible to pledge a trade secret.
The choice between patenting or protection as a trade secret must also be assessed in the light of what it costs to obtain protection. Patenting can be expensive – especially in the case of extensive international protection. Before choosing to apply for a patent, it may be wise to carry out an analysis of third party rights in order to identify existing patents or other intellectual property rights that may limit the company’s freedom of action – a so-called “freedom to operate” investigation. In addition, application fees and annual fees must be paid to maintain the right. Trade secret protection, on the other hand, arises automatically, by virtue of the secrecy, and requires no registration costs.
Sometimes a combination of both patenting and trade secret protection may be the best approach. A rather practical solution is for the core of the invention to be patented, while the other surrounding solutions are kept as a trade secret.