Innovation drives economic growth. Businesses invest in patents and trade secrets to develop new processes and products, making intellectual property (IP) protection methods more crucial than ever.
While both offer advantages, the choice depends on the nature of the invention, business strategy, and long-term goals. In the Philippines, the Intellectual Property Code (IPC) governs these rights, further providing guidelines for proper IP protection for your brand.
As such, this article will help you understand the basics of patents and trade secrets, their key differences, and which protection method best suits your business.
What is a Patent?
A patent is granted to provide rights and protection to the inventor after an invention is disclosed to the public. It also seeks to restrain and prevent unauthorized persons from unjustly profiting from a protected invention.1
To obtain a patent, an invention must meet three key criteria:
- Novelty – An invention shall not be considered new if it forms part of a prior art (Section 23, Chapter II, Part II, IP Code)
- Inventive Step – An invention involves an inventive step if, having regard to prior art, it is not obvious to a person skilled in the art at the time of the filing date or priority date of the application claiming the invention. (Section 26, Chapter II, Part II, IP Code)
- Industrial Applicability – An invention that can be produced and used in any industry shall be industrially applicable. (Section 27, Chapter II, Part II, IP Code)
Patents grant the owner the exclusive right to use, license, or sell the invention for 20 years from the filing date.2 However, patents require full disclosure of the invention, meaning competitors can access detailed information once the patent expires.
What is a Trade Secret?
In Air Philippines Corporation v. Penswell, Inc., the Court emphasized that a trade secret is defined as a plan or process, tool, mechanism or compound known only to its owner and those of his employees to whom it is necessary to confide it. The definition also extends to a secret formula or process not patented but known only to certain individuals using it in compounding some article of trade having a commercial value.3
Article 4(g) of the IP Code includes “protection of undisclosed information” under the term “intellectual property rights”, which includes trade secrets. Unlike patents, trade secrets are not registered with IPOPHL and do not require public disclosure.
Trade secrets can last indefinitely, provided confidentiality is maintained. This is how the Coca-Cola company protects its decades-long brand identity.
Patent vs. Trade Secret: Which Should You Choose?
Choosing between a patent and a trade secret depends on various factors, including the nature of the innovation and business goals. Here’s a comparison:
- Duration: Patents offer protection for 20 years, while trade secrets last indefinitely if kept confidential.
- Disclosure: Patents require full disclosure, while trade secrets remain confidential.
- Legal Protection: Patents provide legal enforcement, preventing others from using the invention. Trade secrets rely on contractual agreements and internal security measures.
If your brand requires confidentiality to maintain its quality and identity over time, then trade secret protection is better for you. Otherwise, having it patented is the proper recourse.
Conclusion
Understanding the differences between patents and trade secrets helps businesses make informed decisions about protecting their innovations. A patent may be the best option if your invention can be reverse-engineered or requires strong legal protection. A trade secret is preferable if confidentiality can be maintained since public disclosure would reduce competitive advantage.
Consult with an accredited IP attorney to determine the best strategy for your brand’s protection. For more information, contact us at admin@pinollaw.com.
2 Section 52, Part II, Chapter II, IP Code
3 G.R. No. 172835
