Businesses must decide how to protect their ideas, products and methods. They can apply for a patent or keep valuable information secret. Patents offer legal protection for a limited time but require public disclosure. Trade secrets can last indefinitely if they meet legal requirements and remain secret.
Long-term protection without public disclosure
A U.S. utility patent generally lasts 20 years from the relevant filing date, subject to certain adjustments and exceptions. Owners must also pay required maintenance fees to keep their patents in force.
Trade secrets do not require public disclosure or patent filings. Under the federal Defend Trade Secrets Act, information may qualify as a trade secret if it has value because it is not generally known or easy to discover and the owner takes reasonable steps to keep it secret.
The Coca-Cola formula is a well-known example. The company has kept its recipe secret for more than a century rather than patenting it. Businesses can also use confidentiality agreements to help protect private information, although these agreements cannot prevent every lawful disclosure.
Costs and legal protection
Patents can involve filing fees, legal costs and ongoing maintenance fees. Trade secrets avoid patent filing and maintenance fees, but businesses must still invest in security. They can limit access to sensitive information and train staff to protect it.
The legal rights also differ. Federal patent law protects patented inventions. Someone may break the law by making, using or selling a patented invention without permission. Offering it for sale or importing it without permission may also break the law.
Federal trade secret law protects valuable business information. A business can seek legal help if someone improperly obtains, uses or shares its trade secrets.
However, the law does not stop competitors from developing the same idea on their own. They may also discover the information through lawful methods, such as reverse engineering.
Choosing the right protection
Trade secrets can protect valuable methods as they improve, without requiring a new patent application for every change. For example, a factory may keep its production process secret while making improvements.
Patents may offer stronger protection when competitors can easily copy or discover an invention. A patent can protect the invention covered by its claims, even if a competitor develops it independently.
The best choice depends on the invention, the risk of copying and the business’s ability to keep information secret.