With all due respect to Patents and Trademarks, Trade Secrets may provide your most significant corporate IP value, at least initially. After all, your trade secrets represent the techniques, processes, technology and knowledge that only you have and own, giving you a clear advantage over your competitors. Trade secrets are your secret sauce, if you have one.

Further, trade secrets, in contrast to patents and trademarks, cost nothing to acquire and maintain and have no expiry date. So why expose these, ever?

1. Discovery: If your technology, products or services can be fully understood, revealed, re-engineered and essentially copied, you have no essential trade secrets.
2. Risk of Leakage: If your trade secrets are in the brains or hands of those who may be weak links exposed to industrial espionage, cyber-attacks, theft, headhunting, greed or vengeance, your trade secrets are at constant risk.
3. Commercial Leverage: In order to spread the usage of your innovation beyond your team, to empower partners and distributers, you need to take risks in exposing your products or services and the trade secrets that enable them to be deployed. In this way, trade secrets place powerful challenges or limits on your ability to grow.
4. Unwitting Exposure: It is much more common than you would think for company secrets to be unwittingly revealed. Sales and marketing love showing off their wares, engineers often want to prove their brilliance by writing it all down, and potential partners or investors may flatter and tease it out. If this happens, patents may be your recovery plan, if you recover in time.

I have a client with a very powerful technology that was developed based on timely and very expensive research. They intended to keep their core technology as a trade secret, but at some stage, the engineers working on a patent (not with me!) spilled out all the beans and in the end exposed much too much information in the resulting patent application, seriously compromising their trade secrets.

Actually, all was not lost, and we were able to still file relevant patents on these previously maintained trade secrets before the information was published. In effect we converted their trademark strategy into a patent strategy, which in the end, I believe, will work out for the best. Why?

Because if you cannot keep a trade secret, it ceases to be one. When you place your technology in some else’s hands so they can study it, test it and re-engineer it, most technologies, although not all, can be revealed and copied, if not otherwise protected. With such technologies, patents and designs may be necessary, and the only way to maintain your monopoly on your technology or products.

While your trade secret can be kept a secret, and you take the necessary measures to make sure it stays this way, you are in great company. After all, Coca-Cola, KFC and Google search algorithm aren’t bad acts to follow. But if your trade secrets cannot be kept effective secrets, or the secrets are at risk of being revealed, you will also need a powerful patent protection strategy to keep control of your innovation or tech, and to enable its commercial expansion.  

To the Future!

Yaron Damelin – Strategic IP Management Consultant