Secrets and Patents
1. Consider keeping valuable information secret from your competitors.
Competitors cannot use information that only you know about. This provides you with a competitive advantage. Secrets are sometimes known as “confidential information” and “trade secrets”. In Australia they may be protected by the principles of Breach of Confidence under the common law.
Secrecy may be an option for any form of valuable information, not only inventions. Secrecy can be especially powerful for intellectual property that cannot be otherwise protected. Supplier and customer lists, company procedures, and recipes, are generally not patentable. They may, however, be very valuable and may be kept secret. The recipes for COCA COLA (TM) and KENTUCKY FRIED CHICKEN (TM) are secrets.
2. Manage your secrets properly and get protection from the law.
Courts may award damages when secrets are dishonestly obtained. The law, however, may protect not all secrets. While the requirements for legal protection vary between jurisdictions, it is generally favourable if the secret:
- is indeed secret;
- has commercial value because it is secret; and
- has been subject to reasonable steps under the circumstances to keep it secret.
Consequently, it is important to actively keep the information secret and mark all documents disclosing secrets as “CONFIDENTIAL”. Access to secret information should be strictly controlled. Electronic access may be controlled by passwords, and hard copies kept in a safe.
People who have access to the confidential information need to be made aware that the information is secret, preferably in writing. Employees and contractors should preferably have signed a confidentiality agreement. Consider including confidentiality clauses in employment and contractor agreements as a matter of course.
Developing a company secrecy policy for your employees to follow can strengthen protection. A patent attorney or intellectual property lawyer can check your policy to ensure it fully protects your secrets.
Records of the confidential information, its generation and by who, should be kept. If in doubt, a lawyer or patent attorney can assist.
3. Consider secrecy over patents
Inventions that are difficult to reverse engineer may be better protected by secrets than patents. A method for making a material, for example, may be difficult to reverse engineer by analysis of the material. Secrecy, however, may be an inferior form of protection for information, mechanical, and electrical technologies, which are generally easily reverse engineered. I strongly recommend patents for the protection such technologies.
Secrecy may also be an option when patent enforcement would be difficult. For example, it may be hard to discover if a competitor is using a patented method behind closed doors. A patent application discloses an invention and how to achieve it. If it is hard to enforce a patent, it may be better not to reveal the invention in a patent application by forgoing patent protection.
A secret may be kept indefinitely, which is greater than the maximum term of 20 years for a patent. A secret may be maintained long after a patent has expired provided the secret is difficult to discover.
4. Don’t try to patent a secretly used invention
An invention that is used secretly can’t be subsequently patented. Neither can an invention that is the subject of a published patent specification be kept secret. Only one of these two strategies can be legally employed.
It is, however, important to keep the invention secret, but not secretly use it, before filing a patent application.