Patent vs Trade Secret: Which way to go?

Transcript

this next question comes from sarah and sarah's a paralegal at a large enterprise they're trying to reduce costs and um one of the executives said why are we spending money on patents let's just trade secret everything right trade secrets are free and let's uh let's unpack that a little bit so [Music] um a trade secret is anything that is uniquely known to your enterprise that gives you advantage over your competition now it can't be in the public domain and you know anything that's shipping out to a customer that can reverse engineer it really isn't appropriate for trade secret protection but if it's an internal process you know maybe something that the factory does more efficiently maybe it's you know who your suppliers are who your customers are and what their contact information is every enterprise has trade secrets and um the executive was correct and that there's no money you have to pay with a law firm to protect those trade secrets but you do have to do certain things you have to it has to be pretty clear what your trade secrets are um some companies will actually inventory them here's the formula for this product um here's the list of suppliers and they would also then have to make their employees aware of the fact that those are secrets so you put confidential on things or company proprietary and if they're labeled and people know what they are then you have the ability to get a court to enforce uh those trade secrets you know often when you go to work for a company you'll sign a bunch of documents one of them will be a confidentiality agreement or a secrecy agreement and that can talk about the trade secrets in the program and stuff like that so if the employees are aware of what the trade secrets are and you remind them and you put these safeguards in place right you don't post it on the website or make it publicly available it's truly kept as a secret trade secret protection is excellent but the big caveat is if it's going to end up in the hands of the public you can't keep it secret anymore almost anything can be reverse engineered today that wasn't always the case but now every chemical compound can be found out any circuit you know um software can be decompiled so it really isn't an appropriate protection in those circumstances now in talking with this executive the next thing that came up was we'll just do defensive publications defensive publications are inexpensive not going to spend the money on the patents we'll do defensive publication right and that's a fancy term and all that it means is that um instead of keeping something as a trade secret which somebody might like later patent and cause you problems or filing a patent on it which is expensive we will give it to the public domain we'll publish it right without filing a patent on it so it's no longer a trade secret once you've published it it um after a period of time there's a one-year grace period but after a period of time it's not appropriate for filing a patent on anymore but what it does is it defends you from anybody else trying to file a patent on it so you have this this innovation you come up with very low priority not worth spending the money on to to secure patent rights you publish it so that later if anybody else tries to get a patent on it you have your defensive publication to say hey look look look you cannot stop me from doing this you may have a patent but your patent is invalid because indeed i have published it first so in the u.s we talk about first a file system that's generally the law around the world but really the way to think about it is the first a published system because the first and first person to publish it um has the ability to file patent and on it in the u.s you have that one-year grace period you know there isn't the grace period overseas so often when you publish it it's gone forever but um publishing it gives you the right in the u.s to file within a year on that idea and nobody else even if they file their patent first if you've published it first that can knock out their patent and your subsequent patent to capture it um would would protect you or you know maybe you don't file a patent on it so i think when you're when you're considering an innovation capture program you always have to everything starts off as a trade secret maybe that's fine maybe it's an internal process and and that's going to be great um there are certain things that look they're going to be out there they can be reverse engineered and you know maybe that's a publication is once once you send it out there but certainly if you write up a document uh you publish it there's services that will do this for you um inexpensively it has to be somewhere where it can be found you know it's indexed like a library or something like that but there's electronic equivalence of that just search for defensive publications and you'll see some examples or ask in the comments below and i can point you in the direction of a couple that we use but you know if you're not going to file a patent on it for whatever reason consider a defensive publication it at least preserves your right to continue doing that or to do it in the future without somebody else staking claim to that innovation with their own patent so considering all three of those options so that you're only spending the big dollars you know patents are expensive you're only spending that money on your best innovation and the other stuff is either trade secret or given to the public domain uh formally in a defense of publication so i hope that that that helps and after explaining um that to the executive and um didn't really like the term of giving it to the public domain it sounded like this free thing this defensive publication that was uh really handy and inexpensive so it wasn't that attractive as he thought about that but but nonetheless consider all of that stuff before you commit to writing a patent because if you call up uh you know your favorite patent attorney they often are going to start tracking you right toward a patent but before you do that you should be thinking about these other options so i hope that helps any event um let me know if you have any other questions and i'll get to it in one of my future videos just put the questions in in the comments below or or send send us an email and and we'll get around to answering your question in a quick um five to ten minute video so everybody stay safe and we'll we'll talk to you next week