HomeIntellectual PropertyTrade Secrets vs Patent (Explained: All You Need To Know)

Trade Secrets vs Patent (Explained: All You Need To Know)

Trade secrets and patents are different forms of intellectual property differing in how they protect their holders. Keep reading to find out how!

Keep reading as we have gathered exactly the information that you need!

Let me explain to you the difference between trade secrets and patents!

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Difference Between Trade Secrets vs Patent

Have you wondered what is the difference between trade secrets and patents?

Well, you are at the right place.

In this article, I will tell you exactly what is a trade secret and a patent and tell you how they differ in key ways.

To start with, in Canada, a trade secret is considered to be any information that has a commercial value, is kept secret, and is subject to reasonable measures taken to protect its secrecy.

In essence, trade secrets can encompass a broad range of business information and data.

On the other hand, a patent refers to an instance when the government grants you (or the inventor) the right to prohibit others from using, selling, or creating the patented invention for a certain period of time.

Typically, a patent is granted for a maximum of 20 years.

Now that we have generally defined trade secrets and patents, let’s look at how they differ.

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Scope of Information

The first difference between a trade secret and a patent is the scope of information that they cover.

Trade secrets encompass a much broader category of information than patents.

Any information that has value to a company, that is secret, and where the company takes measures to protect can be a trade secret.

However, a patent will cover information that is novel or inventive.

For example, a customer list may qualify as a trade secret whereas it will not be patentable.

Secrecy of Information

For a trade secret to be protected by the court, the information must be “secret”.

In other words, information will not be considered trade secrets if the information is accessible to the public or is freely shared with others with minimal restrictions.

On the other hand, a patent is a public information.

When the government grants you a patent, you are given a “monopoly” over your invention for a period of time but you are required to publish your invention.

Protection Duration

Trade secrets and patents differ in how long they are protected by law.

A company’s trade secrets can be protected for an indefinite period of time.

For so long as the company has valuable information that is secret and takes active steps to keep it a secret, the information will be afforded trade secret protection.

However, a patent will provide the inventor protection for a limited period of time.

In Canada, patent protection applies for 20 years from the date it was filed.

Exclusivity of Information

When you’re dealing with trade secrets, it’s important to understand that many companies can come up with trade secrets that target the same thing or relate to the same thing.

This means that multiple parties can be afforded trade secret protection relating to the same thing.

In other words, trade secrets are non-exclusive as several parties can develop the same thing using independent measures and through legitimate means.

For example, two companies can develop a software product providing the same features and functionalities through their independent development efforts.

On the other hand, a holder of a patent has the exclusive right over the patented invention.

This means that nobody can make, use, or sell the same thing without the patent holder’s authorization.

Reverse Engineering

Generally, the law allows companies and individuals to reverse engineer a product.

The process of reverse engineering consists of someone taking a product, disassembling it, and trying to figure out how it works with the intention of using that information to compete with the product maker.

Reverse engineering is the basis of allowing competitors to enter the market and promote innovation.

If a product is sold containing trade secrets, competitors can potentially reverse engineer the product, and develop something similar.

The sale of a product is akin to a publication of trade secrets may include.

However, a product that is patented cannot be reverse-engineered as the patent holder has exclusive rights over that invention.

Commencement of Legal Protection

Trade secrets and patents differ with respect to the moment the right holder is protected by law.

A holder of a trade secret is immediately protected by law.

This means that a company that develops or acquires information that is qualified as a trade secret is immediately protected.

On the other hand, the patent holder is given legal protection over the invention from the moment the patent is filed.

Legal Disputes

Having a trade secret or a patent is important to protect the rights of the holder of the trade secret or inventor of the patent.

However, there are situations when the holder must file a lawsuit in court or engage in legal proceedings to protect its trade secrets or patents.

When that happens, a party invoking trade secrets will have the burden to prove that the information used by the defendant was in fact a trade secret and must be protected by law.

On the other hand, a patent holder will not have the same obstacle to overcome.

With respect to patents, the party challenging the patent has the burden to prove that the patent is not valid.

This is because the party who is granted the patent is presumed to be the owner of the patent and exercising rights on a valid patent.

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So there you have it folks!

What is the difference between trade secrets and patents?

In a nutshell, both trade secrets and patents are a form of intellectual property that may be highly valuable to their holders.

The main difference between a trade secret and a patent is that trade secrets can include any information that is valuable and secret whereas patents are protections offered by the government to an inventor and are made public.

Companies can potentially use legitimate and independent means to develop the same trade secrets whereas patents are exclusive to the patent holder.

Every company should evaluate its options in pursuing a trade secret strategy or filing for a patent.

If you are dealing with trade secrets or patents and need legal advice, be sure to consult with a qualified attorney on the topic.

Good luck!

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