Let’s say you (or your company) have developed some technology with significant commercial value. To protect your exclusive ownership of this technology, your first impulse may be to file a patent application. However, before starting down that road, you should consider whether that technology can be better protected as a trade secret. The key to this question centers on the fact that, once you file a patent application, the design and functionality of your invention is wide open for your competitors to see, simply by accessing the public records of the U.S. Patent Office.
Let’s take two examples:
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You invent a new instrument that performs a common, but critical, mechanical function in a significantly more efficient fashion than the existing equipment on the market.
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You invent a complex technological innovation that creates a new or improved product for your customers, in a manner that is not transparent to them or other outsiders.
In both cases, you have developed new technology that gives your business a valuable competitive edge which is important to protect. But they likely call for two different avenues of legal protection.
In example #1, your invention is embodied in a piece of equipment that the skilled engineers of your competitor may be able to “reverse engineer”. That is, after getting a unit of your equipment, they could break it down sequentially and figure out how to replicate that unit, maybe with their own “tweaks” to disguise the fact that your equipment is their source and/or to further improve performance. Since you cannot effectively protect the secrecy of your developments, you might choose to file for patent protection so that, if someone else tries to “knock off” your invention, your patent becomes a potent weapon in the fight to stop them.
In example #2, where you are confident that your competitors will not be able to pierce through to see “how you do it”, you should consider the path of maintaining strict internal secrecy over your innovation as a “trade secret”, rather than the public path of filing for a patent. This requires well-planned management discipline: the information is securely designated and sequestered as confidential; access to the key information is limited to a select, trusted “need to know” group; your employees sign legally binding confidentiality and inventions agreements; and, if you use any independent contractors, you monitor their project activities and use additional contract language to make clear that you own anything they create for you as a “work for hire”. These basic steps help legally establish the developments and related information as your proprietary trade secrets, while keeping them from the prying eyes of your competitors.
This type of choice is often critical to protecting the “crown jewels” of your business. Speak with an experienced intellectual property attorney for guidance in making the best choice.
