When considering how to protect sensitive and valuable information, companies are often faced with a choice: to file a patent or keep a trade secret. In this blog post I will outline some of the pros and cons of both and let you decide which you think might best accommodate your particular asset. The first component we must look at is time: while a patent can only stay valid for about 20 year, a trade secret can last indefinitely, so long as the secret is not revealed. The trade secret process requires no formalities or bureaucracy which allows it to go into effect immediately. On the other hand, because of that lack of formality, there is no legal code protecting it from being replicated or stolen. In other words, the only line of defense with a trade secret is the ability to keep it secret. Another disadvantage of a trade secret is how vulnerable your product may become to the public market. If your product is one that can be reverse engineered, third parties may be able to obtain the secret information by legitimate means and even file to patent the secret. Depending on the patentability of a given product, companies have to assess the pros and cons of these various methods of protection and make the decision based on a very precise calculated risk.
http://www.wipo.int/sme/en/ip_business/trade_secrets/patent_trade.htm
The difference between trade secret and patents are like night and day. I wish there was a legal compromise between the two forms of intellectual protection. One big con of patents is they are are not well protected because someone can easily find the details of patent online. This should not be so easily accessible.
ReplyDeleteexactly. but i feel like it also depends on several other factors, e.g. locations? if you have it in countries where black market selling is the norm, patents wouldn't help much in protecting the valuable info im guessing.
ReplyDeleteThere actually is legal protection for trade secrets. Although, you're right in fact, once revealed, the trade secret looses efficacy. However, companies are allowed to take legal action if they feel that trades secrets have been violated (for example, by employees):
ReplyDeletehttp://www.uspto.gov/ip/global/patents/ir_pat_tradesecret.jsp
Coming from a math / cs background, i'm a big fan of trade secrets - seems like it may actually be more effective than patents in some regards.
ReplyDeleteI feel that trade secrets should only be implemented in cases where the engineering background of the product is difficult to decipher, e.g. Coke's formula. To implement a trade secret in a product that can be reverse-engineered would be asinine, as a competitor could simply take apart the product and learn how it works.
ReplyDelete