A patent is an agreement between the inventor and the federal government under which the inventor receives an exclusive right to use the invention while having an obligation to make it public. A trade secret refers to any information or method giving the owner an exclusive competitive advantage if used in the business. The aim of a patent is to make the invention public while the aim of a trade secret is to keep the information hidden from publicity. While patents are limited in time, trade secrets are not. Another distinctive feature of a patent is its ability to protect the invention from being used by anyone except the owner of the patent for commercial purposes. A trade secret is not provided with such protection, as it can be used by another person if being discovered by legitimate means. The person can patent already existing trade secret if he/she discovers it. Therefore, patents appear to have a higher level of protection than trade secrets do. However to be eligible for attaining a patent, the person has to comply with certain formalities while the process of becoming an owner of a trade secret is less complicated.
Identifying the main differences between these forms of intellectual property helps to determine the factors influencing the choice between them. The first factor that needs to be taken into account is whether the information that needs to be protected can be easily developed or discovered by another person or company. Patents are more suitable for such cases, as they grant protection in case of reinvention. Trade secrets have weak protection, and in the event of reinvention, the owner will lose the exclusive right to keep the information. The costs needed to be spent on keeping the information in secret is another factor that should be considered. If these costs are higher than the initial value of the invention, a patent can be more suitable. Besides, the objective of the inventor and the type of invention influence the choice. If the invention’s usefulness is limited to a particular business area, and the owner wants to use it in private business and receive material benefits in such way, then trade secret appears to be a better option. If the invention is useful for society and the owner wants to share it with publicity while keeping certain rights for it, a patent can be chosen. For example, if the person possesses a secret recipe, shared only among the members of the family, related to preparing a unique homemade cheese that is considered exclusive and expensive, trade secret can be a good solution. If the process of making the cheese can be repeated only in this certain region and only by following the unique recipe, the chances for the reinvention of the process is rather low. Besides, the process of maintaining the invention in secret does not involve any big investments. The invention of the recipe is useful for this particular business and can benefit the owner if used in this area. The invention cannot be regarded as extremely useful to the society, and is more likely to benefit the owner if kept in secret.