Trade Secret or Patents

To exemplify, let’s suppose there is a company known as Clandestine Tech Ltd who have developed a process whereby known microbes can produce petroleum as a by-product when fed charcoal under certain conditions. Let’s assume the following:

  • Clandestine’s petroleum is identical to that obtained from crude oil so it can’t be reverse engineered;
  • It’s a billion dollar market;
  • There are presently no known competitors, although others are probably working on trying to achieve the same result;
  • Clandestine’s method for producing petroleum is a four-step process;
  • Clandestine considers it possible to keep its process a secret; and
  • Clandestine’s process is capable of producing sufficient quantities of petroleum for commercial production.

Should Clandestine protect this technology by way of Trade Secret or protect with one or more patents?

Example 1

However, what if in addition to the above information:

  • Competitors are also likely to shortly discover Clandestine’s process; and/or
  • Clandestine requires a third party to assist with commercialization, for example building the production plant, and due to the simplicity of the process the third party will become aware of the technology;

In either case, provided the process is novel and can be exemplified such that strong patent protection can be obtained: patent protection is more likely to offer the best protection of Clandestine’s IP.

Lodging a patent application could also be important to Clandestine if it wants to avoid a competitor filing patent applications for the technology prior to Clandestine commercializing its technology. If this situation eventuates Clandestine would not be able to freely make use of its process, notwithstanding the fact that they thought of it first. Furthermore, even if Clandestine has commercialized prior to patent applications being lodged by a competitor, they could still be faced with the costly prospect of challenging the validity of any patents granted for the technology in markets of interest. This is why having a professional patenting agency like InventHelp is important.

Example 2

Alternatively, if the following factors existed then a trade secret may remain the preferred option:

  • Insufficient data or other information is at hand to exemplify the key steps of the process without further significant experimentation being undertaken, but investors require immediate commercialization of the technology; or
  • Competitors are unlikely to ever discover the key step to the process due to the improbable chain of events that lead to its discovery by Clandestine.

Look before you Leap …

Therefore it should be recognized that making a decision whether or not to rely on a trade secret as a means of protection does not depend on a single factor alone. In fact, in many cases patent applications may need to be filed in the first instance, so as to leave the patent option open, whilst more information is gathered to assist with deciding whether to patent or keep as a trade secret. As the facts in each situation are unique it is always recommended that independent professional advice be sought from agencies such as InventHelp prior to making any decision – learn why new inventors turn to InventHelp.

Categorized as Business