Trade secrets can be a good way to protect the ideas and inventions that allow your company to maintain its spot in your industry. Make no mistake – trade secrets are not the same as patents, copyrights, or trademarks. The main distinction, and first advantage of trade secrets that you’ll notice, is that they keep information secret. This means only the people who need to know will know how your invention, product, or idea works or is made. At the same time, this also leads to one of the disadvantages of trade secrets, which is that you have to spend considerable resources keeping it a secret, potentially for as long as you’re in business.
So it’s not a perfect form of intellectual property protection, but there isn’t one. Like the others, trade secrets have their advantages and disadvantages. Let the intellectual property protection attorneys at Emerson Thomson Bennett explain the advantages and disadvantages of trade secrets so you can decide if it's the best form of IP protection for your business.
The Advantages of Trade Secrets
Trade secrets can offer several advantages when it comes to protecting your intellectual property. One of the main benefits is that you can keep your invention or idea secret. This means that you won't have to worry about competitors having access to the same information and/or technology as you. Other types of IP protection, like patents and copyrights, go into a public database, making them publicly available, though not necessarily easily available.
Cost of Trade Secrets
Additionally, trade secrets do not have a filing process, and therefore, no filing cost. How expensive they are outside of this depends on how large your business is, how competitive your industry is, and how often you need to break out your trade secret. For a small business, more often than not, trade secrets are not terribly expensive.
Length of Trade Secrets
In addition to being cost-effective and private, trade secrets also offer a longer period of protection than other forms of IP protection, such as patents and copyrights. Unlike patents which expire after a set amount of time, trade secrets remain protected indefinitely until they become public knowledge. Copyrights offer protection until the original author dies, plus an additional 70 years.
This means that once your work is protected by a trade secret, it can remain private for as long as you can keep it secret.
Acquiring Trade Secrets
Finally, trade secrets are much easier to acquire than other forms of IP protection. Technically, all you have to do to have the legal protection of a trade secret is to keep it a secret. There’s no filing that you have to do, as we said before. You do want to keep a record of any expenses or attempts to protect it that you’ve made, but that’s to serve as proof that it exists and has been a trade secret since its inception. These files and records are not a trade secret filing.
The Disadvantages of Trade Secrets
The main disadvantage of using trade secrets to protect intellectual property is that they are difficult to enforce. Unlike patents, there is no legal mechanism in place to ensure that the secret is kept private and not shared with competitors. There are legal repercussions, but the old saying for many people goes, “Ask for forgiveness, not permission.” Forgiveness will not grant you back your trade secret, though it may get you compensation.
Secrecy of Trade Secrets
Additionally, trade secrets can be at risk of being stolen or leaked due to the fact that they’re not publicly available. The secrecy works both ways in this instance. This means that you might not even know if someone has acquired your information until it’s too late. Depending on the competition in your industry, a trade secret could be the most difficult or the easiest form of IP protection to protect.
Price Tag of Trade Secrets
Speaking of protecting them, we said before that trade secrets can be cheaper than other forms of IP protection. This is true when you’re a small business without several competitors and thieves who are going to use subterfuge to take your trade secret.
People aren’t going to try to steal and sell the recipe for your cookies if you sell to one small town, but they may if you’re a multi-million dollar corporation. For businesses like this, expenses can go up. This can include security of all kinds and round-the-clock protection.
When Should You Use Trade Secrets?
Trade secrets have some crossover with other forms of IP protection when it comes to what they protect. Patents specifically can be used for several things that trade secrets can be used for.
When it comes to choosing to utilize a trade secret or a patent protection process, ask yourself, does your business need this invention to be a secret? A patent means you can use and be the sole license holder of it for twenty years. That’s twenty years you make money licensing it out. If you improve on it, and file another patent, depending on your industry, this can essentially act as a patent renewal.
But, once the patent expires, anyone can use it. Do you need your IP to be a secret? If so, you should use trade secrets. This is the only way for your invention or idea to stay secret for a long time. You shouldn't use trade secrets if your invention or idea needs public knowledge for it to work or be used by others.
Contact the IP Protection Attorneys at ETB Law
Businesses rise and fall off the back of their IP all the time. If your IP is so important to your success that one else can have it, you need a trade secret. If not, and you need to utilize something else, you need an experienced IP protection attorney.
If you file for the wrong type of IP protection, you’ll be left vulnerable, without protection, while anyone can utilize and take advantage of your IP. Don’t take that risk, contact the IP protection attorneys at Emerson Thomson Bennett today.