Trade Secrets

Trade Secrets

The decision of whether to seek a patent should be weighed against the option of maintaining a trade secret. Some innovations like the process for making nooks and crannies in Thomas’ English Muffins are valuable for many years while they are maintained as a trade secret. Obtaining a patent would provide strong protection for a period of time, but then the idea is made available for others to use free of charge.

A trade secret is a great form of intellectual property protection as it can last forever. However, a trade secret, unlike a patent, does not prohibit a second company from inventing the same innovation and using the innovation. The second company can even seek patent protection for the innovation. While there is some protection for the first company to continue to use the trade secret, the protection under 35 USC §273 is full of limitations and gaps.

Some innovations are not candidates for trade secret protection as the innovation is discernable by reverse engineering the product after the product is made available to the public.

In some instances a company may have an idea that could be protected by either a trade secret or a patent. The company may prefer a trade secret but worries about the leakage of the trade secret as there are many employees, vendors, and clients that know aspects of the trade secret. While those with access have signed appropriate agreements, it may be difficult to prove which person was the source of the leak. There is also a risk that some competitor may eventually independently develop the same solution and be unreachable using trade secret laws.

One option is to file a United States patent application with a non-publication request. This patent application goes through the examination process without a publication of the pending application. At the tail end of the process, the company can decide to turn down the offered set of patent claims. The reasons to turn down the patent claims may be that the offered claims are too narrow to justify publication of the trade secret by the issued patent. The reason to turn down the offer of the patent claims may be a desire to stay with trade secret protection as there is not a current fear that a competitor is close to developing the protected innovation or received leaked information.

Filing a United States patent application with a non-publication request means that the company is not planning to obtain patent protection beyond the United States. So this option is not perfect, but may be a good choice for a company with the vast majority of revenue coming from the United States.

A quirk in the newest patent laws from the America Invents Act is the implicit ability to take a long-standing trade secret and now apply for patent protection in the United States. Some call this “evergreening “a trade secret.