Do Patents Or Trade Secrets Offer Better Protection? The Answer May Surprise You!

By Rick Michaud
Question: My company develops special formulations for customers that are typically using virgin plastic resins. We replace that material with ours which contains various biomass, i.e., corncobs, sunflower hulls.

My question is how do we protect our formulations from competitors in the industry? We do not want to use patents as they tell everyone what our work entails.

Our Answer:

There are essentially two ways by which you can protect your formulations.

1. Via patents

While I understand your reluctance to use patents as once they publish the information is available to the general public, please bear in mind that a patent has a 20 year lifespan.

There is also no such thing as innocent patent infringement. It does not matter whether or not the infringing party knew of your patent.

2. Through the use of trade secrets.

Independent invention is a complete defense to infringement accusation. In other words, if someone comes up with your product on their own, or through reverse engineering, they have not violated your trade secrets. However, if you have a patent, they would still be an infringer.

The two are also mutually exclusive: you either obtain a patent or keep a trade secret.

Assuming that you wish to maintain your formulations as trade secrets, then you must treat them as such. One of the leading reasons why they fail is that the entity did not protect it as such.

Several Factors Go Into Protecting Something as a Trade Secret.

In order to qualify, the information must be identified as such.

* The information should not be generally available within a company and known only to those who need to know.
* The information should be kept under lock and key or password protected on one's computer.
* Those that know of this information should be informed that the company considers it such.
* It is a good idea for a company to have a trade secret policy that all employees read and sign.