To understand the difference between pursuing a trade secret and a patent, think for a moment about the pharmaceutical industry and Coca-Cola. A popular beverage for decades, Coca-Cola’s classic recipe is one of the most famous examples of a trade secret in action. The method for creating the soft drink’s flavor is not protected by any patent, which is why it’s remained a secret for so long. A patent requires you to divulge the details of your creation to the public, and a patent only lasts for a limited time. That’s why, for example, lower-priced generic versions of popular pharmaceutical drugs flood the market after a certain amount of time has elapsed.
If you’re working on an invention or innovation, you might be considering different means of protecting it. Here are some factors to consider when deciding whether to seek a patent or maintain a trade secret.
Will your product matter for more than twenty years?
A patent will protect your intellectual property (IP) from copycats for two decades, and after that, your idea is fair game for competitors. If you believe your creation has the longevity to remain relevant for generations to come, it might be worth taking steps to preserve it as a trade secret.
Can copycats recreate your intellectual property?
The law offers avenues to protect yourself if your trade secrets are stolen, but there’s nothing stopping anyone from reverse-engineering your idea. This is especially pertinent if your product will be used by the general public or you feel someone is bound to make a similar discovery soon. Once a copycat has its hands on your idea, you’re at the mercy of marketing. For example, the sandwich cookie Hydrox, consisting of two chocolate cookies with a creme filling, was created before Oreos, but there’s a good chance you’ve never heard of Hydrox cookies. In cases like these where complexity isn’t your idea’s strength, it might be wise to pursue a patent.
Is your product patentable?
Part of the reason it’s so wise for Coca-Cola to keep their formula under wraps as a trade secret is that food products are hard to patent. For a food or recipe to be legally protected, it must be clearly “new” and “nonobvious.” Regardless of what field your product serves, the features that would separate it from competition might be difficult to patent. If so, you might be better off keeping what makes it special a secret.
Are you willing to do the work to protect your secret?
Under the Uniform Trade Secrets Act, you could be protected from “misappropriation” of valuable trade secrets, defined approximately as information that maintains value by actively being kept secret. It’s said that no single contractor knows the entire Coca-Cola formula; each only ever works on their part of the operation. The impetus is on you to make sure your secret remains a secret, whether that means enforcing NDAs or seeking litigation in the case of a leak.
