Which is a Better Approach for Protecting Your Innovation – Patents or Trade Secrets?

The intellectual property of a company is its most important asset. A patent is an independent right is given for creation, invention, or a new way of doing something or offering a specialized solution to a problem. To obtain a patent, practical information about the invention must be revealed to the people in a patent application.

  • Patents and trade secrets are two successful ways of protecting a creation or an invention. However, patents and trade secrets use different strategies to provide protection. Hence, it is vital to know about the benefits and drawbacks of patents and trade secrets before adopting the suitable one. While patents can be used to restrict anyone from using your inventions, trade secrets only protect others from using your information or innovation if the subject information was “plundered.” Trade secret law does not protect against your independent work.
  • A patent is an exclusive right granted for a creation, which is a product or a process that provides, in general, a new way of doing something or offers a new specialized solution to a problem. To get a patent, scientific information about the invention must be revealed to the public in a patent application.
  • Patents and trade secrets are intended to safeguard inventions using different strategies. A patent gives one the right to prohibit others from making, using, selling, or importing a claimed product or process, in a chance of fully public revealing of your invention. Trade secrets cover relevant and secret information from the formula, an approach to business information that derives its commercial value from being kept private, and the company’s consistent efforts to maintain trade secrets as secret. Google search algorithm is an excellent example of a trade secret. The same information or data can be protected under a patent as well as trade secrets.
  • The main advantage of trade secrets is that they are not revealed to the general public. A well-kept secret could probably last forever, but there is an associated risk. The non-disclosure obligation of the trade secrets in public gives its owner the advantage of earning an economic benefit. However, it is not necessary to keep the information a secret for a lifetime. When the trade secret loses its monetary value or protection, it can be made available. Trade secrets protect the owner’s secret from fraud or theft by supporting the trade secret owner to keep the information secret, making it highly intimate. Trade secrets can be patented by their owner at that point when it is no longer in need of being kept confidential.
  • Patents are given for a tenure of 20 years by the Indian Patent Act, 1970. After the ending of a patent, anyone can commercially misuse the invention. The public may use the innovations for their interest, and the patent holder might not have any right over it anymore. Trade secrets are a better option than patents in such cases sincethe term period is unending. There is no restriction period for trade secrets since they remain secret until they are transferred to someone.
  • Patents, on the other hand, can only be protected through public disclosure. Patentright is granted to its inventors or creators under the Patent Act, 1970, to reveal theirinvention in exchange for specific requests to the public.A patent is invalidated if the inventor abstains from explaining essential details. Thus, patents are directed to protect the comprehensive concept, while trade secrets cover the entire information of the product or process. In the case of patenting technical innovations, the invention is demanded to satisfy the requirements such as utility, novelty, innovative step, patentable subject matter, and business usage.
  • On the other hand, trade secrets have no such particularized criteria and there is no such review process to examine trade secrets. One of the biggest obstacles in the case of patents is the eligibility of the subject matter. A trade secret is related to anything, provided the owner keeps it secret, offering some competitive advantage and monetary value. The underlying requirement of the patent system is for the patent owner to reveal the invention in the patent application, which contradicts the need for trade secret protection.
  • Even if an infringer individually develops the patented creation or invention, this will not provide any security for patent infringement. This issue is not applicable to trade secrets. The trade secret owner is feeble to prevent a competitor who chooses to duplicate a product or process protected by trade secret by reverse engineering. Hence, trade secret protection is applicable against unfair users, whereas patent protection is based on distinguished principles of claim infringement.
  • When it comes to the commercialization of the invention, the licensing of patented technology is very easy. The technology to be licensed is defined precisely, and license terms can be set out quickly in a license agreement. However, the licensee must be satisfied that they receive an actual trade secret in trade secrets, not something from the public domain. Hence there is no proper explanation of a trade secrets agreement.
  • The expenses included in patents are comparatively more as compared to trade secrets. Patents need application fees, filing fees, patent renewal fees. But, again, the cost is different for different jurisdictions. Trade secrets are relatively inexpensive, and it essentially includes administration costs for internal processes. But on the other hand, trade secrets only have the cost required to maintain their safety and protection, giving trade secrets an advantage over the patent. One most crucial warning to the popularity of trade secrets is digitization. With continuous data leakage, hacking, and so on, trade secrets are more exposed.


However, protecting intellectual property through patents is costly and does not contain several types of content, like customer lists, which are essential. Therefore, a viable alternative is a trade secret that enjoys protection under US law, and the related costs are comparatively lower. Hence the patents and trade secrets have a different set of benefits. For example, a patent protects a new and valuable invention, whereas a trade secret protects useful and confidential information. In addition, a patent grants the patent holder a right to exclude others from making, selling, using, or importing the invention.

At the same time, the trade secret protects only from misappropriation. Therefore, one must use a practical method before choosing between patents and trade secrets. Ideally, protecting an invention using a blend of patents and trade secrets may help one derive the maximum