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4440574 - Patent and trade secrets in Intellectual Property Law

Patents and Trade Secrets: The Best Way to Protect Your Business

If you are an innovative person who’s worried about their inventions, or if you’re a company owner who needs to protect its confidential business information, this article is written just for you. Patents and trade secrets are of the most common types of intellectual property protection. At first glance, these terms may look a bit similar, but still you should be aware that distinctive advantages and disadvantages reside in each of them and it is of great importance to choose the method that fits your circumstances and your goals.

Consider the Coca-Cola case for instance. If Coca-Cola had used patent protection for safeguarding its drink formula, it would have been protected only for a limited time and also wouldn’t have been a secret anymore. Thus the company definitely wouldn’t have been as wealthy and successful as it is now and would have lost its popularity only by choosing the wrong method of protection. 

So that’s how important it is to choose the suitable method of protection. A wrong choice would turn a giant company into a big loss, conversely, a right one can guarantee your business protection and make it a great success.

What Is Patent Protection Anyway?

In simple words, a patent is a legal document that grants an exclusive right to the creator of a new product or a process for a limited time. For obtaining patent protection there are certain registration formalities and payments depending on the law of the country from which you want to get the patent.

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What Does It Mean to Obtain a Patent? What Rights Do You Exactly Gain by Obtaining It?

The main value of a patent falls under the answer of this question. The patent holder can decide who may or may not use the patented invention. So when an invention is protected by a patent, it cannot be commercially made, used, offered for sale, sold or imported by others without the patent owner’s permission. However, you should be aware of the fact that this exclusive right is not unconditional, and that’s why learning about the cons and pros of a patent is of great importance.

What Are the Pros of Obtaining a Patent?

As mentioned earlier, the main benefit of patent protection is the monopoly that the patent holder gains on the invention. As long as you own the patent, you can use the patented invention in any form you want, meanwhile you have the right to take necessary legal actions against any usage that lacks your consent.

But what should you pay in exchange for obtaining this right? In other words, what are the cons? 

Registration formalities and fees

In order to obtain patent protection, you have to go through a  rather complex process of patent registration and pay the required fees which vary from country to country. So you need to reach for legal advice regarding the law of the related country before going through this procedure.

Time limitation

Patents are granted for a limited period of time which again varies in different countries. After the expiry of this period, your invention will fall under public domain, that is to say, everyone can exploit it and your permission won’t be a necessary requirement anymore. 

Territory limitation

Patent rights are only enforceable in the territory of the country or countries that have granted the patent to you. So, at least in the current state of the international patent system, there’s no such thing as a worldwide patent. The more countries give you the patent, the more protected your invention will be. This highly-recommended protection surely necessitates legal experts of different jurisdictions. 

Risk of disclosure

Note that patent rights are granted in return for the inventor’s full disclosure of the invention to the public. Indeed no matter how public the information is, while you have a patent, you’re protected. But the risk of shrewd infringement still exists.

 For example, if you create an improved perfume-spreading device which can spread the perfume to a certain distance, someone else may do the same only with spreading power in close distances. So competitors can easily make this device with slight differences that doesn’t violate your rights but appeals to the same buyers.

 Thus, if a new process is so vital and confidential that you never want your competitors to discover, you may need another type of protection which is going to be the next section and that is trade secret. 

What Kind of Secret Is a Trade Secret?

Suppose you are a company that provides products or services with unique features. For guaranteeing your income and of course protecting your special product or service from your competitors, you’d better keep the feature that makes your work exceptional as a secret. No matter if it’s a new formula or a special recipe.

 There are many popular examples of trade secrets that you’ve probably heard of, such as McDonald’s Big Mac “special sauce”, Google’s search algorithm and the most common one Coca-Cola’s recipe for their signature drink. 

So basically the types of work that you protect with trade secrets are secrets. These are things that might not be patentable, but are nonetheless commercially valuable. 

What Are Trade Secret Protection Advantages over Patent Protection?

No registration and payment

Unlike patents, trade secret protection needs no registration and as expected no payments.Thus, there’s no complex process in order to acquire trade secret protection. You literally don’t have to do anything to get a trade secret, except to do the things that make a trade secret, a trade secret. You must have a secret that you try to keep secret by for example, forcing people to sign non-disclosure agreements, training your employees not to disclose the secrets or even keeping them in safes.

No time and territory limitation

Trade secret protection is not limited to any time period. So the information can be a secret as long as you want it to be. Besides, since you don’t receive this protection from a specific jurisdiction, thus your secret is not limited to a certain place but it’s a secret everywhere. 

No risk of disclosure

Since you don’t have to disclose your invention to the public in order for the competent authority to give you trade secret protection- for it’s not obtainable from authorities at all- so there’s no risk of disclosure to the public. As long as you keep your invention a secret by means mentioned above, your confidential information will be safe.

What Are the Drawbacks of Trade Secret Protection in Contrast to Its Tempting Benefits?

You are responsible for maintaining the trade secrets.

As set forth above, trade secret protection involves taking necessary steps for maintaining this valuable confidential information, such as non-disclosure agreements or simply just keeping them in safes. Making any mistake in this regard, would directly hurt your business because once the secrecy is gone, there are no legal actions for you to take.

Trade secret protection is not necessarily suitable for any subject matter.

The difficulty of a trade secret protection is that, if your information concerns a specific method of building a device or any object, when putting it on the market, it would be susceptible to independent discovery and potentially reverse engineering. And when the information is unraveled, there’s nothing to do because you’re the one responsible for maintaining it.

 Conversely, if you protect this product under a patent, no matter how public the information will be, as long as you hold the patent, you can take legal actions against any form of exploitation which lacks your consent.

So you’d better use the trade secret protection mostly for process inventions.

What Is the Best Way to Protect Your Business?

Now it’s time to sum up and find out which one of these types of protection works the best for you. The answer to this question would be different depending on who you are, what your aim of protection is and what the item that you want to protect is. 

So be careful that there’s no absolute answer. While deciding about which protection to choose, you must take into account all relevant circumstances including your finance sources, how much time you have for being protected, your subject matter of protection and more importantly the vision you have for the future of your business. The method of protection taken by others may not be necessarily the suitable one for you. 

Last but not least, note that for choosing your suitable method, you need to consult with a business lawyer. That’s an essential requirement since patent laws may vary from one country to another.

Besides, you need to file an application in each country that you want your invention to be protected in, since in the current state of the international patent system, there’s no such thing as a worldwide patent. So the more countries that give you a patent, the more protected your invention will be.

Share your goals and circumstances with business lawyers and they’ll guide you in accordance with the law of any desired country of yours.

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