Trade secrets and patents provide a textbook example on where IP strategy and commercial strategy meet to choose a form of protection with a lasting impact on a business. In order to explain the choice, we must first give an overview of the two rights and how they differ:

Patents – These rights involve a trade-off: Inventors receive strong protection in the form of an exclusive monopoly for a period of time in return for public disclosure of the invention. Patent rights generally last 20 years after creation. During a patent term, even if another inventor independently has a “lightbulb moment” and comes up with the same invention as you completely separately, you still have exclusive rights, and can stop the other from using (and patenting) the invention.

Trade secrets – trade secrets cover exactly what they say the cover – sensitive information relevant to your business and not shared outside your organisation. Unlike patents, they have no time limit: as long as they stay secret they get legal protection. But if someone independently discovers the same thing you keep secret, you generally will have no rights under trade secret law to prevent them from using it.

So on the one hand you have strong protection of limited duration that involves disclosing your invention (patents). On the other hand you have potentially perpetual protection that depends on how good you can keep the secret and how hard it will be for your competitors to discover it for themselves.

Which route should you take for your innovation?

Once you've made a the initial decision to protect an innovation, you then choose how to best protect it. That protected innovation (your IP) then becomes an asset of your business that you have to maintain (which is where IP governance comes in). Making the decisions to protect and how is all guided by the business's IP strategy.

This article by ipVA is part of a series by ipVA on the basics of IP and business known as the Intangible Handbook. ipVA provides IP strategy services and products that help businesses and investors better understand and manage IP. For more, see the rest of our site or get in contact.