Keeping It Secret
Innovation is the life blood of lots of businesses and as budget considerations of most companies and individuals tighten there must be a consideration of how best to protect that innovation. The protections available for innovation as intellectual property include, both patents and trade secrets.
An innovation must meet certain criteria to be patentable, notable exceptions to patentability are business methods and software innovations, unless it involves a technological feature. Even if an innovation meets the criteria, consideration must be given to the commercial value of obtaining a patent versus the cost. Obtaining a patent can be costly and involves an investment of time.
A trade secret on the other hand comprises formulas, practices, processes, designs, instruments, patterns, or compilations, some of these may be patentable, but in any event must be confidential.
To decide between patenting or keeping it as a trade secret ask yourself can your innovation be reverse engineered and/or has it got a life span over 20 years? If it cannot be reverse engineered or will potentially last over 20 years, or conversely will have a very short lifespan, then trade secrets may be an option.
Next, can it be kept confidential? To paraphrase ‘today’s innovation is tomorrow’s chip paper’ unless King Canute like efforts are applied to keep it secret. Keeping something secret is always difficult and to maintain a trade secret conditions must be met. The innovation must not be generally known or readily accessible, it must have commercial value because of its secrecy and steps must be taken by the owner of the innovation to ensure it is kept secret. This boils down to – only a few selected and trusted individuals in a company should know and fully understand the innovation, it should not be discussed or shared with anyone else regardless of whether they are employees in the company or not, and all efforts must be taken to ensure that all aspects of the innovation are kept confidential.
Trade secrets have been the life blood of fashion-based or short product life industries for years but in the longer term this can work against you. You must be aware of the potential downfalls of going down the trade secret route, as your own secrecy means the innovation is not public so others can apply for patents. The system might bite in other areas as well – as you may be limited to prior user rights against other’s patents and of course limit your licensing opportunities because of the need to keep the innovation secret.
The trick is to make a conscious decision and normally get an intellectual property professional’s perspective. They don’t bite and can give free fast off the cuff advice. The best solution is to make a regular IP audit of your innovations so at least you know what can and what should be kept a secret.