One of the principal differences between trade secret and patent protection is their duration. A utility patent has a term of twenty (20) years from filing, while a trade secret can have a potentially unlimited term, as long as the secrecy can be maintained. Another significant difference is the scope of protection. A patent generally confers an absolute right to stop anyone from making, using, or selling the patented invention.

A trade secret is only protected from improper acquisition and use. It is entirely proper for someone to independently develop and use the trade secret, and even to reverse engineer the trade secret by studying and analyzing the owner’s commercial product. Therefore, although they may have a shorter duration, patents generally afford more complete protection.

Another substantial difference between patents and trade secrets is the scope of the subject matter they protect. Some trade secrets, for example customer lists, do not relate to a type of information that can be patented. Other trade secrets, for example a minor improvement to a process, is so close to prior art that it would not be possible to obtain a patent. Sometimes there is no choice but to rely on trade secret protection.

Patent and trade secret protection are generally considered incompatible because when a patent issues or a patent application is published, its contents are made public, destroying any secrecy. A patent applicant cannot hide confidential information about the patented invention because the patent laws require complete disclosure, including a written description and an explanation of the manner of making and using the invention in terms that would allow a person of ordinary skill in the relevant technical area to make and use it. Moreover, the inventor must disclose the best mode of the invention at the time of filing in order to gain the right to exclude others from practicing the invention. Legal rights regarding trade secrets arise from the relationship between two or more parties generally in contract. As such, if trade secret information is wrongfully disseminated, for example, by publication on the web, anyone who lawfully received the information is free to use it. The only recourse is against the person or entity that violated a duty by disseminating the information. This limitation may indicate that patent protection is the better option for those concepts that qualify.

To find out more please access our IP Primer page.