For many businesses, intellectual property is their most important asset. It is the one thing that separates the company from all others, and it can allow any business to remain competitive. It is for this reason that any business with intellectual property must go to great lengths to protect it in the form of either a patent or a trade secret.
There are substantial differences between these two concepts. As a business owner, you must weigh the pros and cons of each one so that you can make an informed decision regarding your business. The right decision can help your business thrive for years to come.
Patents are rights the government provides. It allows you to gain ownership over your invention so that no other entity may manufacture it. Certain criteria must be in place for the patent office to accept your invention. According to guidelines, it must be "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof." You must prove that your invention is novel, useful and "not obvious." One downside with patents is that they do come with fees. In addition to the primary cost, you have to pay annuity fees every year.
Numerous companies implement trade secrets. Arguably, the best-known example is Coca-Cola. The company never filed a patent for its secret formula. Instead, the recipe remains in a vault somewhere. Numerous companies, including Kentucky Fried Chicken and Bush's Baked Beans, do something similar. When a company files a patent, it must disclose every aspect of the innovation. Patents only last 20 years, so it is possible after a certain amount of time other companies could produce a similar product. Trade secrets last as long as the company wants them to, and there are no filing fees whatsoever. Both processes have their advantages, and you must do what is ultimately in the best interest of your business.