Trade Secrets vs Patents

Innovation is the lifeblood of SMEs, but a tight budget means you must consider how best to protect your innovations. Are Patents or Trade Secrets the best choice?


An innovation must meet certain criteria to be patentable. There are exceptions to this rule, including business methods and software. Even if an innovation meets the criteria, you must consider the commercial value of obtaining a patent versus the cost. Obtaining a patent can be costly and involves an investment of time.

Trade Secrets

A trade secret can include any of the following:

  • Formulas
  • Practices
  • Processes
  • Designs
  • Instruments
  • Patterns
  • Compilations

Some of these may be patentable, but must be confidential.

How to Choose

If your innovation cannot be reverse engineered or will potentially last over 20 years then trade secrets may be an option.

Can it be kept confidential? Keeping something secret is difficult and to maintain a trade secret conditions must be met. The innovation must not be generally known or readily accessible and it must have commercial value because of its secrecy.

Only a few trusted individuals in a company should know and understand the innovation. It should not be discussed or shared with anyone else regardless of whether they are employees or not.

Keeping a Trade Secret also means that the innovation is not public so others can apply for patents. You may also be limited to prior user rights against other’s patents and limit your licensing opportunities because of the need to keep the innovation secret.


The best decision you can make for your Intellectual Property is to seek the advice of an IP professional.

Contact us today for a free no-obligation consultation.