Using Patents and Trade Secrets to Protect Innovation

Patents and Trade Secrets

Patents protect inventions and Trade Secrets protect secret information which provides a competitive advantage. Research and development information that is maintained subject to the appropriate safeguards is protectable as a trade secret. The use of research and development may be protectable as an invention.

A patent application must provide the following:

(a) Description of the invention; (b) Sufficient information to enable one skilled in the art to use it; and

(c) Description of the best modes of practicing the claimed invention as well as describe the actual claims made.

Once a patent application is sent to the USPTO, it is recorded and processed by the United States Patent and Trademark Office. That procedure takes anywhere from many months to several years.

Best Mode

One issue regarding a patent application is whether the best mode known to the applicant is sufficiently disclosed. The applicant must describe the best way to practice the invention in their application. The best mode is measured at the time the application is filed. Thus, improvements in making or using the invention that occur after application can be maintained in secret.

Patents in Relation to Trade Secrets

The inventor of matter eligible for patent protection must elect whether to avail himself or herself of such protection, accepting the attendant obligations, or whether to retain the matter as a secret, relying upon the protection extended to trade secrets by the common law and by certain statutes. Certain situations indicate a clear advantage in one form of protection over the other. For instance, if the discovery is to be embodied in a product that will be sold, patent protection would probably be the better choice.

Patents and Trade Secrets are inconsistent

You must choose a patent or a trade secret. You cannot chose both. Although patent and trade secret protection may be simultaneously available for related components of an article or steps in a process, one cannot chose both.

A patent constitutes a public disclosure of the invention. One cannot not publicly disclose a secret and then claim it’s a secret. Also, if you don’t file for a patent then the inventor may have challenges related claims of priority of first inventor status.

One who suppresses an invention may not only forfeit the right to a patent, but might also lose the status as ”first inventor” for purposes of opposing a patent application of a subsequent inventor. Thus, a claim of trade secret and patent protection for the same matter is inherently inconsistent if the matter is published, and open to intense fact scrutiny if the matter held as a trade secret by the first ”true” inventor is asserted against a later ”inventor” of the same subject matter.

Secret use of a patentable invention raises an inherent question as to whether such use constitutes ”concealment” or ”suppression.” If it does, a subsequent inventor may be eligible to receive a patent although such a subsequent invention cannot meet the novelty test of the Patent Act. Thus, a second person to invent something may get a patent over the opposition of the first inventor if the latter made the invention in the United States and suppressed or concealed the invention. Yet the same second person may be denied a patent if the first inventor published the invention in some obscure journal prior to the second’s claimed invention date, provided that the one could reasonably locate the prior art reference. In both situations, the second inventor has not invented something novel and was equally unaware of the first inventor’s work.

Requirement of Disclosure in Exchange for Patent Monopoly

The patent monopoly conferred upon the inventor is given in exchange for the full disclosure and public dedication of new and useful invention. Disclosure of the invention, and of the manner and process of making and using it, must be made in clear and concise terms so that any person skilled in the art could make and use it; the disclosure should indicate the best mode contemplated by the inventor for carrying out his invention. Given the statutory requirement of full disclosure, attempting to secure a patent and yet withhold statutorily-required information as a trade secret would appear to jeopardize the validity of any patent that issues on the basis of such application. On the other hand, retention of information related to a patent but not required to be disclosed as a trade secret is permissible.

Level of Invention Required for Patent

The standard for patent protection is more exacting than that required for trade secret protection. Matter which is not patentable may nonetheless be maintained as a trade secret.
Risk of Loss

A patent provides protection against innocent as well as willful infringement. Thus, unlike the owner of a trade secret, a patent holder can redress infringement even against one who innocently practices the invention. Additionally, the patent owner’s right to prevent all others from making, using, or selling the patented invention lasts for the duration of the patent regardless of how many infringers there are. Proliferation of use of trade secret matter will extinguish the protected status which is based upon secrecy and once the patent expires, protection ceases. By contrast, trade secret protection is of indeterminate duration because it lasts until the matter becomes generally known.

Trade Secret Protection of Matter for Which a Patent Application is Pending

Protection afforded under the patent laws does not commence until the patent is granted, the grant is deemed to put the world on notice of the patentee’s claims. Yet there is always some period of time between the date of filing and the issuance of a patent. Prior to the grant of patents, trade secret protection applies if the matter otherwise meets trade secret standards. Consequently, wrongful use or disclosure of secret matter, even though that matter will be disclosed by the patent, prior to the issuance of the patent is actionable. Recovery for such wrongful use or disclosure is entirely independent of whether the patent application ripens into a valid patent or if the patent subsequently proves unenforceable.

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