Patent vs. Trade Secret: What’s the Best Route for IP Protection

A common dilemma in many industries including Tech is whether to protect industry advantage through the use of a patent or opt for trade secret protection. Both are viable tools that can be implemented for the safeguarding of intellectual property, with each offering unique advantages suited for different types of protection.

This blog explores the nuances of each option, helping you decide which might be the best fit for your needs.

What is a Trade Secret?

A trade secret consists of essential information, including formulas, practices, processes, designs, and instruments, that provide a business with an advantage against the competition. Measures are put in place to ensure that these trade secrets are closely safeguarded from being available to the public and the competition.

Protection Offered by Trade Secrets:

Trade secrets protect a wide array of information, potentially including sales methods, distribution methods, consumer profiles, advertising strategies, lists of suppliers and clients, and manufacturing processes. The key criterion is that the information must confer a business advantage precisely because it is not generally known.

Unlike patents, trade secrets are protected without registration, meaning a trade secret can be protected for an unlimited period as long as its confidential status is maintained. Protection measures typically involve security protocols, confidentiality agreements with employees and partners, and more sophisticated measures for sensitive information.

Selling or Licensing Trade Secrets:

Trade secrets can be sold or licensed under contractual agreements, which typically include strict confidentiality clauses to prevent dissemination of the information.

What is a Patent?

A patent is a formal right granted for an invention, which allows the patent holder to exclude others from making, using, or selling the invention for a period of up to 20 years from the filing date of the patent application. The invention must be novel, non-obvious, and have some practical utility.

Furthermore, patents can enhance a company’s valuation, attract investment, and open opportunities for licensing and partnerships abroad.

Patents vs. Trade Secrets

The choice between using a patent or a trade secret often depends on the specific nature of the information or invention and how easily it can be independently discovered or reverse-engineered.



Trade Secret


Protects new, useful inventions

Protects valuable, confidential information

Method of Protection

Grants exclusive rights to make, sell, use, and import

Guards against unauthorized use or disclosure

Disclosure Requirements

Requires public disclosure of the invention

Information must remain secret

Acquisition Process

Involves a formal application and examination by the patent office

No formal application or registration required

Time to Take Effect

Typically 2-3 years

Effective as long as secrecy is maintained

Duration of Protection

Limited to 20 years

Can last indefinitely, as long as it remains secret


Ranges from $30,000 to $50,000 per patent, per country

No application fees; costs involve maintaining secrecy and internal procedures

Choosing Between Patents and Trade Secrets:

Nature of the Invention/Information: If the invention can be easily reverse-engineered once publicly disclosed, patent protection might be more appropriate. Conversely, for processes or information that can be kept confidential and are difficult to reverse-engineer, trade secret protection might be more advantageous.

Cost Considerations: Obtaining a patent can be costly and time-consuming. If budget constraints are significant, maintaining a trade secret might be a more cost-effective strategy.

Longevity of Protection: If the value of the invention extends beyond the life of a patent (20 years), and if it can be kept secret, trade secret protection could provide long-term benefits.

Competitive Environment: In highly competitive fields where rapid innovation occurs, the shorter-term protection of patents might be more appropriate to prevent swift imitation by competitors.


Both patents and trade secrets provide critical tools for protecting intellectual property, but the nature of the invention, specific business circumstances, and long-term strategic goals should inform the decision to use one over the other.

Consulting with an intellectual property attorney is strongly recommended for advice tailored to your particular situation and to ensure that your intellectual assets are effectively protected. Their expertise can guide you through the complexities of IP law and help you make the most informed decisions to safeguard your innovations.

Understanding the landscape of intellectual property rights, particularly the distinctions between patents and trade secrets, empowers businesses and inventors to maximize the value of their innovations. As technology and markets evolve, so too should your strategies for protecting your intellectual property. Whether through patents, trade secrets, or a combination of both, the right approach can provide a crucial competitive edge and support sustainable business growth.

For those navigating the intricate world of IP, Legal Advantage offers expert guidance and strategic services tailored to protect and maximize your intellectual assets. Contact us today to explore how we can support your innovation with robust IP strategies tailored to your specific needs and industry demands.