Protecting intellectual property so that you have the right to control and monetize it is one of the most important aspects for nearly every business. However, the type of intellectual property protection that you choose to use can make a drastic difference in what you are able to do over the long term.
Patents and trade secrets are used to protect things such as processes, patents, and recipes, but there is still a distinct difference between the two types of protection and what they will do for your ownership of the intellectual property over a period of time.
When we think of a patent, we often think of having the exclusive right to an invention. However, we do not usually realize that patents extend far beyond physical objects. Formulas for new substances, recipes for a particular dish, and unique processes can all be patented. A patent will typically give the holder of the patent exclusive rights over control and monetization for a period of 20 years. This means you have two decades to decide how you will use your invention, who can use it, and how much you will charge them to do so.
However, there is a big trade off for patents. In order to obtain one, you have to disclose all of the details of your invention to the patent office and the disclosure will be released to the public when the patent is approved. Anyone can study and read it, but they will not be allowed to use it for their own purposes without getting your permission, at least until the patent has expired.
Patents are often used for companies and things that are expected to become outdated after a while, such as electronics. Cell phone manufacturers, for example, will often invent a new technology that is faster and better, but they will only benefit from the patent for a short time because it is likely that before the 20-year period is up, the technology will have been surpassed by something new. That means hanging on to the exclusive rights longer than that will not be important.
When it comes to trade secrets, there is no registry office or any type of control over them. Instead, trade secrets get their value because they are a secret and only the people who know the details have the ability to use them. This is what makes them profitable. When the secret is exposed, it essentially loses its value along with any profitability the secret holders had.
A perfect example of a trade secret is the recipe for Coca-Cola. The company has kept its formula a secret for more than 100 years. Only a few people know the formula and a written copy of it is locked up in Atlanta. Why go through all the trouble of protecting it? The formula is not patented. It will never be released to the public, and if someone within the company did release it, their best product would be ruined.
Trade secrets can be valuable for an indefinite period of time, but they carry a lot of risk; that is why they are not as popular with many businesses. However, we do know that they can be very valuable, as Coca-Cola has proven.
Contact an Experienced Business Law Attorney
If you have new ideas for your business and are not sure what the best way to protect them may be, contact the attorneys at Verhagen Bennett LLP today. We will advise you of your legal options and help ensure that your valuable business information is protected.
© 2019 Verhagen Bennett LLP — This article is for general information only. The information presented should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.