Trade Secrets vs. Patents

Often, an inventor must decide whether he or she would like to preserve a particular innovation as a trade secret or try and obtain patent protection for the innovation. A number of factors should be considered when making such a decision. For example, the cost associated with attempting to obtain patent protection, the expected scope of protection for such a patent, and the ease with which the innovation may be reverse engineered can be factors that are relevant to such a determination.

An additional factor that can be evaluated when deciding whether to try and patent an innovation or, alternatively, keep the innovation as a trade secret, can be how difficult or easy it may be to identify a third party infringing any patent rights a party may have to the innovation. If patent rights to a particular manufacturing method may be difficult to identify as being used by a competitor, the costs associated with trying to patent the method may outweigh the benefits of having a patent for that method. This is particularly true if the method can be effectively maintained as a trade secret.

On the other hand, patents can provide easily identified intellectual property assets. Such assets can be considered to have significant value when they provide commercially significant protection for a product or range of products. This is particularly true when the use of a patented innovation can be easily identified in a particular product offering or range of product offerings and/or service offerings.