Trade secret VS patent, how should enterprises choose?

With the progress of science and technology and the promotion and encouragement of intellectual property rights, more and more enterprises begin to realize the importance of intellectual property protection. How to choose the appropriate way of intellectual property protection, balance the protection of intellectual property rights and the cost of protection, has become an important issue in the process of formulating and implementing intellectual property strategy.

Patent protection and trade secret protection, as two important ways of intellectual property protection, have proud successful cases in intellectual property protection. The most successful case of trade secret protection is the well-known Coca-Cola formula. It is the protection of trade secrets that makes this company maintain its dominant position in the market competition for nearly a hundred years, and it has been selling well so far. There are also some well-known brands in China, such as Yunnan Baiyao, Film Huang and other formulations, which are also protected by trade secrets. There are also many successful cases of patent protection. For example, Qualcomm dominates the world by virtue of its patents in the field of communications, and even opens a "Qualcomm tax" to harvest mobile phone manufacturers around the world, making a lot of money. Many well-known pharmaceutical companies also monopolize some drugs through patent protection and obtain excess benefits.

What are the similarities and differences between patent protection and trade secret protection? How should enterprises choose in the process of intellectual property protection?

Trade secrets are technical information and business information that are not known to the public, can bring economic benefits to the right holder, are practical and have been kept confidential by the right holder. Trade secrets need to have three basic characteristics at the same time, namely, secrecy, value and confidentiality. The scope of trade secrets is relatively broad, as long as it is not well-known general information in the industry, constitute trade secrets. The patent right is granted by the patent administration department of the State Council and needs to have novelty, creativity and practicality at the same time. After obtaining the patent right, the creator of the invention shall have the exclusive right to use the invention for a specified period of time. During this specified period, no unit or individual may manufacture or sell the invention without the permission of the patentee.

The difference between trade secrets and patents is mainly in the following aspects:

(1) Rights are created in different ways. The acquisition of trade secrets belongs to the original acquisition, as long as the intellectual labor results are obtained, do not need to apply for not authorized. As long as the right holder has taken measures to keep confidential the technology that has not yet been disclosed, trade secrets will also arise. The acquisition of patent rights, in addition to the need to produce intellectual labor results, but also need to apply to the patent administration department of the State Council, after examination and approval to obtain patent rights.

(2) The conditions for the creation of rights are different. One of the basic characteristics of trade secrets is confidentiality, so the acquisition of trade secrets is based on the requirement of not disclosing technical information. The acquisition of patent rights is to exchange publicity for protection, and the acquisition of patent monopoly rights is based on the premise that the whole society is aware of its technical solutions.

(3) The scope of the subject of the right is different. There is no clear restriction on the subject of obtaining the right of trade secret. As long as the independent subjects obtain the same or similar technical scheme through independent research and development, creation or other legal means, and they are not disclosed to the outside world, then these independent subjects become the subjects of obtaining the right of trade secret, even if there is a competitive relationship between them. In general, an invention can only be granted a patent right, and the subject with the patent right is unique. Even if other people make the same invention, they can no longer obtain the patent right.

(4) The acquisition and maintenance costs of trade secrets and patent rights are different. The maintenance cost of trade secrets is mainly reflected in a series of confidentiality measures taken to make trade secrets confidential. The usual confidentiality measures include isolation measures within the enterprise (setting up a confidential library, installing electronic monitoring devices, restricting visitors and customers from contacting core business information), narrowing the list of core information employees, keeping and destroying documents, and establishing a set of management processes on trade secrets. The cost of obtaining and maintaining patent rights mainly includes patent application fees, agency fees and annual fees, which are generally open, transparent and can be budgeted.

(5) The duration of protection and the mode of protection are different. There is no time limit for the protection of trade secrets. As long as the rights holders of trade secrets and others are not disclosed, they will always be protected by law. However, in terms of protection, if a competitor obtains information about a trade secret through independent research and development, or even reverse engineering based on the product of the trade secret obligee, the trade secret will be used legally and free of charge. The protection period of patent right, in our country, the protection period of invention patent is 20 years, and the protection period of utility model and design patent is 10 years. After the patent right is obtained, the patentee will have exclusive enforcement rights. If other people want to obtain the right to use the patent, they must reach an agreement with the patentee and pay for the use. Even if other people develop the same technology on their own, they cannot use the technology.

(6) The scope of protection is different. The scope of protection of trade secrets is relatively vague. After the infringement occurs, it is usually difficult to determine whether the perpetrator constitutes an infringement of trade secrets, and the success rate of civil cases is low. The scope of protection of patent rights is determined according to the provisions of the law. To determine whether the perpetrator constitutes infringement, it is mainly based on the technical characteristics of the implementation and the technical characteristics of the patent claims. Compared with the protection of trade secrets, it is much clearer.

As far as enterprises are concerned, whether a technological innovation achievement is to apply for patent protection or to protect technological secrets needs to be determined according to the characteristics of the technology. In general, trade secrets are usually biased towards application to process innovation and service innovation, while patents are more biased towards application to tangible products. If a technology has effective security measures, and can prevent the disclosure of technical solutions, and want to protect the technical solutions for a long time, then it can be protected by means of trade secrets. If the technical solution itself does not achieve a complete leading level, the same technology can easily be developed by others or the same product technology can easily be reverse-engineered by competitors to obtain its key information, then protection in the form of patents can be considered. Of course, for the more advanced technologies developed, they can also be protected in the form of trade secrets first, and then protected in the form of patents at the right time.