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Pre-Filing Counseling: Patent or Trade Secret?
At this early stage, you have conceived an invention, maybe have reduced it to practice as a working model, and perhaps have even begun generating some profit from it. You are now considering patenting your invention.
Before investing in the undertaking of obtaining a patent, you need to consider whether such investment would be worthwhile for your business. For some inventions, a business may very well fare better if it kept the invention a trade secret.
For example, The Coca-Cola Company has protected as a trade secret its method for producing a world-renown beverage. Even if recent reports are true regarding the publication of the ingredients, no one can credibly deny that there at least was a very successfully-held trade secret. Also, copyists would still need to know how to use the disclosed ingredients to obtain a similar beverage.
If Coca-Cola had patented its invention instead of guarding it as a trade secret, the world would have been able to read how the beverage was made as soon as the patent was granted. Then, after the patent expired, Coca-Cola could no longer block competitors from making beverages the same way. An effective trade secret though can theoretically last forever.
In contrast, patent protection would probably be better for a new ergonomic handle for a snow shovel, the handle being fashioned by bending specific angles at specific points along the handle’s formerly-straight length. In this case, a trade secret would be virtually impossible to maintain, as anyone can easily see the essence of the invention, and the typical engineer in the field could copy the handle. However, an effective patent could block competition for perhaps fifteen to approximately nineteen years.
The time period of protection for an invention and the ease of reverse-engineering the invention are only two of the many factors to consider when determining whether to apply for patent protection or to maintain a trade secret. A trade secret will cease providing protection if a competitor independently develops the same invention, but a patent is effective against competitors regardless of whether the competitor’s action would involve copying or independent development. Thus, the ease of independent development is another factor to consider.
Another consideration is how difficult it would be to obtain the patent. An invention that is difficult to patent, for example, computer software or a business method, may be more suitable for trade secret protection. Also, many inventions can be relatively easy to patent but very difficult to enforce. For example, a simple recipe for a superior backed good, that is, an invention that most people could practice in their own homes, would be difficult to enforce, so it would probably be better to keep the recipe a trade secret in a guarded factory.
Accordingly, before deciding to apply for a patent, one should consider whether the subject invention would not be better protected as a trade secret. An effective dialog between the client and the patent attorney can match the legal options in the various countries of interest (a patent is necessary in each country for which the protection is desired) with the specifics of the invention’s technology and the client’s business goals.
If the ultimate decision is to apply for patent protection, I strongly recommend that the applicant consider commissioning a prior art search, which is the next topic of discussion.