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Should I apply for a patent or keep my innovation as a trade secret?

Some innovations are best protected by a patent. Other innovations are best protected by keeping them as a trade secret, know-how, or confidential information.

Each option has its advantages and disadvantages. Some of the factors that might influence the choice one way or the other are:

Factors in deciding to patent an innovation Factors in deciding to maintain an innovation as a trade secret

The innovation can be easily copied or reverse-engineered.

A patent will deter 'copycats' from reverse-engineering a new product or service and then profiting from your innovation.

The innovation is a process that is not apparent or visible to anyone other than the innovator. It will be difficult to identify or even know if there are 'copycats' or infringers.

Patenting such a process will make it public knowledge, and it will be difficult to identify 'copycats' and 'free riders'.

My business is in the high technology sector where innovation moves ahead at a fast pace.

Whoever files a patent application first will gain the economic benefits of the patent. Whoever does not patent, or whoever files the patent application second, will not realise any economic benefits. In a sector where innovation moves ahead quickly, there is sometimes a race to be the first to patent.

The innovation is a process that is not apparent or visible to anyone other than the innovator and staff, and there are no apparent licensing possibilities.

If it is practical to protect the innovation by keeping it a secret among your staff, robust confidentiality agreements might offer adequate protection. This way you will not incur patenting costs.

The innovation can be used in industry sectors other than my own, and I want to be able to license my innovation to licensees in those other sectors.

Normally, a patent will facilitate the licensing process, and will present a more robust proposition than would a know-how licence.

The innovation has a short product life cycle.

There might be many reasons for a short product life cycle, including the rate of change of technology. This suggests that competitive advantage gained by being the first to market, and marketing strategies used to stay there, might be more effective strategies than patenting - particularly if the product life cycle is shorter than the time to apply for, and be granted, a patent.

I plan to export the products or services of my innovation.

A patent in the countries where you plan to export will help you deter or stop 'copycats' who reverse-engineer your product or service and try to profit from your innovation.

The cost of patenting.

After you have realistically estimated the profits from your innovation, and taken into account the usual business risks associated with your estimates, you will need to compare these results with the cost of patenting.

You can then make a considered decision about whether the cost of patenting is commercially justified.

I need to partner with a manufacturer to get my product or service into the market place.

Normally, a patent protects your innovation better against abuse by your manufacturer than a confidentiality agreement protecting know-how.

The innovation is still under development.

When you file a patent application you start a process with strictly enforced steps and time frames. If you apply for a patent too early, you might sacrifice a patent with the most robust scope and claims. Weighing up these risks is a difficult task.