Trade Secrets v. Patents

Trade secrets and Patents are simply two kinds of intellectual property rights that secure information. Patents protect information that qualifies patentability standards, while trade secrets can shield patentable information that can add commercial value to the holder. Therefore, the same can be guarded by the trade secrets patents and the trade secrets. At this point, the necessity to choose the form of IP rights arises.

What are Trade Secrets?

Trade secrets include methods, processes, or any other company information that determines the monetary value of the business that a company is making a generous effort to keep secret. 

What are Patents?

Patents give the patent holder the sole right to prohibit others from manufacturing, selling, making use, or carrying an invention or service in trade for the full public declaration regarding the invention. 

What is the difference between trade secrets and patents?

The first and basic difference between the two is that the patent is publicly disclosed, whereas the trade secret is hidden from being disclosed. The other differences are as follows:

  • Trade secret protects estimable and secret knowledge, whereas Patent protects a new and valuable invention.
  • Trade secret protects from any misuse of sensitive information, whereas the Patent grants the patent holder an exclusive right to prohibit others from manufacturing, selling, making use or importing the invention.
  • There is no formal procedure to obtain the secrecy to the information in trade secret, whereas for obtaining the patent rights, an application is submitted at the patent office.
  • A trade secret has expiry until the persons who know the secret does not leak it whereas the patent rights are valid for a limited period, post that, it is renewed by paying the prescribed fee. In India, the validation of a patent is for 20 years.

Between Trade Secret and Patent, which one is favourable?

One notable fact is that there is no concrete law in India to protect the trade secret. On the other hand, a well-framed law protects the interest of the Patent holder.

While in India, the trade secret is supported based on the law of equity and common law action of violation of confidential information, which amounts to a breach of contractual obligation. The solutions which are open to the trade secrets owner is to receive an injunction restricting the licensee from revealing the trade secret, return of all secret and exclusive information and compensation for any damages sustained due to exposure of trade secrets.

In India, a person is contractually obliged not to reveal any knowledge that is exposed to him in confidence. The Indian courts have upheld a restrictive clause in a technology transfer agreement, which imposes a licensee not to disclose or use the information received under the contract for any of the faith other than that has been recognised in the said agreement

What to pick between the patent and trade secret completely depends on the corporation or inventor and the type of invention.


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