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Originally Posted On: https://bltg-ip.com/trade-secret-vs-patent-key-differences-explained-for-innovators/

Trade Secret vs. Patent: Key Differences Explained for Innovators

Learn the critical differences between trade secrets vs. patents. Read now to choose the best protection for your innovation!

The number of patent filings has increased globally over the last three years. According to the World Intellectual Property Organization, 3.46 million patent applications were filed in 2022. While patent popularity increases, patents are not always the best choice for protecting intellectual property.

Consider a trade secret vs. patent when determining the type of intellectual property protection you need.

What Is a Patent?

A patent is a legal tool for protecting intellectual property. Generally, patents protect new and useful inventions. One of the most important patent benefits is your ability to prevent others from making, selling, using, or importing goods that would infringe upon the patent.

Holding a patent can give you a competitive advantage, as others will have to create their own method for producing a similar but different invention to compete. There is also potential for revenue, as you can sell the right to use the patent to others.

What Is a Trade Secret?

Protected intellectual property is a trade secret. The information must not be generally known or easily discernable.

Otherwise, it would be too common to be a worthwhile secret. A trade secret can be almost anything:

• Formula
• Pattern
• Compilation
• Device
• Method
• Technique
• Process

Some trade secret advantages include its cost-effective price tag, broad protection ability, and potential for notoriety. Some of the world’s most well-known brands have trade secrets that have been maintained for decades and even centuries.

• KFC seasoning blend
• Coke recipe
• Bush’s Baked Beans flavor profile
• WD-40 product formula
• Google’s search algorithm

How To Obtain a Patent

Obtaining a patent requires carefully preparing a detailed application. Each application is unique, based on the type of innovation you seek a patent for. A computer software patent will focus on explaining coding, while a product invention may focus on a mechanical design or movement.

Once the application is ready, submit it to the United States Patent and Trademark Office (USPTO). Once received, the USPTO will review the application and compare it to previously filed applications and patents. Once proved to be new, the USPTO issues the patent.

Denied applications are rejected, and the rejection can be appealed. The entire patent application process typically takes two to three years.

However, it can take longer if your invention is complicated. In many situations, the agent reviewing the patent application may request additional information and edits to clarify the explanations and information provided in the application.

Once approved, a patent lasts for a 20-year term. Extensions are possible if you meet specific requirements.

Securing a patent can range from $30,000 to $75,000. The cost will depend on the country, the type of patent, and if you hire legal counsel.

How To Obtain a Trade Secret

You do not have to file an application or do any administrative review to obtain a trade secret. There is no official registry for trade secrets. To create your trade secret, take the steps necessary to establish that the information is confidential. 

You can do this by requesting employees with access to the information to sign a non-disclosure agreement, creating company policies for sharing the information, and adding security measures to prevent unauthorized access.

Obtaining a trade secret can happen quickly if you implement protection procedures and clarify that the information is protected. Once you establish your trade secret, you can potentially have it forever as long as you maintain the secret and its protections.

The cost of creating your trade secret will depend on the internal measures you implement.

How To Protect a Patent

Because you have to declare the details of your patent in your application, you must take steps to protect it from day one. Then, once you receive patent approval, you must enforce your patent to ensure you retain the protections it affords you. Take these steps to protect your patent at each phase of the process.

• Keep it a secret while applying
• File a provisional application
• File for international protection
• Enforce through legal channels

How To Protect a Trade Secret

Protecting your trade secret requires slightly different strategies because you never have to share the secret publicly. As long as you remain diligent, you can seek enforcement of the other legal agreements you have in place to protect your intellectual property. Take these steps to protect your intellectual property.

• Identify and restrict access
• Clearly label “confidential
• Use confidentiality agreements
• Share on a need-to-know basis
• Create employee awareness
• Use cybersecurity measures
• Enforce through legal channels

Choosing: Trade Secret vs. Patent

Neither a trade secret nor a patent is always better than the other. Choosing between a trade secret and a patent will depend on several factors. A patent gives you legal protections and rights in exchange for public disclosure. Trade secrets require no disclosure, but your legal protective rights go through different channels.

A trade secret can be a smart choice if your product or process is not easily reverse-engineered. Google has managed to keep its algorithm a secret since the early 2000s.

Consider your budget, as a patent can be expensive to obtain. Financial restrictions may lead you to choose a trade secret approach.

In contrast, a patent can provide you with a clear course of recovery if someone violates your rights. You only have to prove that you hold the patent and that the other party violated it.

Pursuing recovery for a leaked trade secret can be more challenging. In addition, you can’t put a secret back in the box once exposed.

Do I Need a Lawyer?

While you can decide between trade secret vs. patent on your own, this may not be the best approach. Instead, consider speaking with an intellectual property lawyer. They can help you create an IP strategy guide customized to your needs.

The lawyers at Berkeley Law & Technology Group work with innovators to help them protect their intellectual property. With our two offices located in Beaverton, OR, and Austin, TX, we discuss innovation protection options with inventors from across the country. We focus our practice on helping start-ups and those beginning their journey.

Protect your intellectual property by letting our lawyers use various protective tools.