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Comparing patents and trade secrets © Copyright 1993-1995 Oppedahl & Larson LLP. Disclaimer: This is not legal advice.
Click for information on the purpose of this page. There is a tension between the notion of trade secrets and patents. One
approach to protecting intellectual property is to hold everything as a trade secret. The decision to apply for a patent includes
necessarily a decision to take some fraction of one's trade secrets and to give them away, in return for the grant of a patent.
The decision to apply for a patent does not necessarily require giving up all of one's trade secrets, however. One might have
trade secrets on inventions A, B, and C, and applying for a patent on C might not require giving up the trade secret status
of A and B. However, to obtain a U.S. patent on C, it is necessary that the application contain (1) enough to enable one skilled
in the art to practice C and (2) the best mode known to the applicant for practicing C. This might require revealing A and
B in the application. If so, it would probably make sense to seek patent protection on A and B as well as on C. Depending
on the time sequence, one could patent an invention and simultaneously keep secret an improved version of the invention. For
example, if a patent application for invention A is filed, and if an improvement A+ is conceived after the filing of the patent
application on A, the improvement A+ could be kept secret. If the only patent being sought is a United States patent, then
the decision to give up trade secrets to obtain a patent is not, at present, an irreversible one. The reason for this is that
a U.S. patent application is kept secret by the U.S. Patent Office until such time as a patent issues. At any point prior
to payment of the issue fee, an applicant could is permitted to abandon the patent application, in which case it would remain
secret thereafter. One should keep in mind, however, that the U.S. Patent Office has announced its plans to start a program
of publishing patent applications 18 months after filing, thus coming into harmony with the majority of countries having patent
systems. This change, if implemented, puts the U.S. applicant in the same position as applicants in other countries, having
to make a decision whether to seek a patent or rely on trade secret protection. At such time as the patent issues, it reveals
to the public any and all trade secrets that are contained within it. To review what was said earlier, recall that at the
time the patent application was being drafted, the drafter would have included within the application everything required
to enable one skilled in the art to practice the claimed invention. This means that the issued patent application will contain
not only the exact wording of the invention, but will also contain such other things as are required to enable someone skilled
in the art to practice the invention. In addition, when the (U.S.) patent application was being prepared, it had to include
the best mode known to the applicant for practicing the invention. This means the issued patent contains not only that which
is necessary to enable someone to practice the invention, but also discloses the best mode known to the applicant for practicing
the invention. As mentioned above, the U.S. patent system presently permits an applicant to "have it both ways"
regarding patents and trade secrets. If it turns out (after several years of patent prosecution) that patent protection is
not available, the applicant can simply abandon the application and retain the trade secrets therein. It is quite different
in most countries outside of the U.S., where each patent application is published 18 months after the priority date. Thus,
to give a common example, a patent application might be filed in the U.S. on a particular date, and a counterpart application
might be filed outside the U.S., for example in Europe, slightly less than one year afterwards. What happens next is that
the European Patent Office notices that the patent application is claiming priority from a U.S. application, and makes a note
to publish the application 18 months from the U.S. filing date. Thus, 18 months after the U.S. filing, the European patent
application becomes published, and all the trade secrets present in that application are no longer trade secrets. Again, as
mentioned above, the U.S. Patent Office has announced plans to begin publishing patent applications. Before relying on the
above discussion, you should find out whether the proposed publication procedures have been finalized. Depending on the country,
there are sometimes ways to withdraw an application in advance of the 18-month publication date, thus protecting its trade
secrets. Thus the applicant who wants to pursue patent protection outside of the U.S., and yet who wants to maintain trade
secret protection if patent protection proves unlikely, has to make a decision about this before the 18 months are up. For
some applicants the 18-month publication is not as great a drawback as it might seem. After all, some inventions get revealed
to the public automatically through sales of the patented product, in which case revelation of the product's secrets through
the 18-month publication would not make much difference. In any event, the applicant must consider the possibility of loss
of a trade secret through issuance of a U.S. patent or publication of a patent application in a country outside the United
States. Return to the Oppedahl & Larson LLP Patent Law home page. Last revised June 28, 1995.
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