Canada: Protecting Innovation in the Chemical and Metallurgical Process Industries

There are various means by which business organizations can protect innovation by preventing unfair use by competitors of the organization's innovations, while preserving the innovator's right to use. These include patents, trade secrets, and naturally occurring competitive advantages. Intelligent use of these tools requires consideration of the implications on the business organization's ability to freely commercialize the innovation in the marketplace. Deciding between these tools is not so straightforward, especially where technology innovation is susceptible to alternative forms of protection, such as in the chemical and metallurgical process industries. For example, many innovations in the chemical and metallurgical process industries relate to processes whose commercial exploitation does not require their public disclosure, and which are difficult to reverse engineer from the ultimate commercial product deriving from such process. Potentially, such technologies could be either patent protected or protected as a trade secret. Impressing on this is the importance of preserving the right to use the technology, which imports the consideration of defensive publication.

Defensive Publication vs. Trade Secrets

If the invention is of marginal value, it may be difficult to justify the costs of patent protection. Other IP-unrelated competitive advantages may be sufficiently significant to outweigh any benefits associated with securing patent or trade secret protection. These IP-unrelated competitive advantages include:

  1. first mover advantages;
  2. excessive time lag before competitors recognize market opportunity;
  3. significant R&D catch-up hurdles;
  4. brand power;
  5. network effects; and
  6. oligopolistic market conditions.

As well, it may be difficult to justify choosing trade secret protection, having regard to the risk of infringing future patent rights of a later-innovating competitor and becoming blocked from using the invention. If the innovator keeps the invention a trade secret, a competitor may later develop the same invention and still be able to secure patent protection. Generally, being blocked by such a competitor's patent is less of a concern in those jurisdictions (eg. some European states) that recognize prior user rights (prior user rights do not appear to be sufficiently recognized in Canada and the United States to completely remedy this situation, especially with respect to chemical/metallurgical and other industrial processes). Generally, prior user rights insulate prior users of an invention in a jurisdiction from patent infringement liability to competitors with later-arising patents in that jurisdiction so long as the use precedes the competitive patenting.

Even when prior user rights are not available, these patent infringement risks are tempered by the fact that a later-innovating competitor could, of course, choose to rely on trade secret protection. Also, even if the later-innovating competitor chooses patent protection, infringement risks are tempered by virtue of the fact that, because the subject innovation is amenable to trade secret protection, infringement detection is more difficult in these circumstances. Having said that, the potential consequences of infringing such competitor's patent may be sufficiently significant (eg. business failure) that assuming the risk that a competitor will independently develop and patent the same invention, and be able to detect infringement, may not be worth it, thereby eliminating the trade secret protection option from consideration.

In these circumstances, instead of patent or trade secret protection, there may be a justifiable bias towards defensive publication so as to create prior art that blocks competitors from obtaining patent rights for the same invention, and thereby preserve the innovator's right to use and commercialize the invention (hence the characterization of the publication as "defensive"). Although other forms of public disclosure trigger prior art consequences in some jurisdictions, prior art consequences are triggered in a wider number of jurisdictions when the public disclosure is elevated to the form of a "publication".

For example, technologies in the chemical or metallurgical process industries that are susceptible to trade secret protection, but also warrant consideration for defensive publication, may include laboratory equipment and methods, internally-used material handling equipment, minor improvements to chemical or metallurgical processes, or simple non-core technologies. Bias to either one of trade secret protection or defensive publication depends on, amongst other things, the likelihood and consequences of infringing a competitor's future patent and the likelihood of detection of such infringing activity. For laboratory methods or internally-used material handling equipment, competitive patenting activity is more likely to be low, infringement detection is more likely to be difficult, and the consequences of infringement are not likely to be significant. In such cases, there may be a justifiable bias towards maintaining trade secrecy. On the other hand, where potential infringement consequences are higher, such as for marginally improved chemical/metallurgical processes, and especially where relatively little value is likely to be extracted from protecting the technology by trade secret, such as in the case of simple non-core technologies, the bias may swing towards defensive publication.

Patent vs. Trade Secrets

If the invention is of more than marginal value, and there are no other ways available to assist the innovating organization in recouping its R&D costs, its protection through patenting or trade secrecy is more likely to be warranted.

There is a bias towards trade secret protection where there is confidence that the invention could be maintained in secret and where it is unlikely that the same invention will be independently developed or reverse-engineered by a competitor. This bias becomes eroded when circumstances exist which increase the risk of loss of trade secret protection. The following circumstances increase the risk of loss of trade secret protection:

  1. extent to which the invention is easily visible in the marketed product or service;
  2. existence of relatively high employee/contractor mobility or competition for key employees;
  3. government regulation requires disclosure of information to a government authority;
  4. existence of many potential customers and concomitant increased opportunity for information exchange;
  5. sales process requires information exchange between vendors and customers;
  6. customers receive on-going technical support, thereby creating further opportunity for information exchange;
  7. nature of the innovator's business requires regular collaboration with third parties;
  8. business strategy includes licensing of invention to third parties;
  9. problem solved by the innovation is something which pervades the industry, and there is a high probability that competitors are continuing, in parallel, to expend R&D efforts, searching for a solution to this same problem; and
  10. existence of significant market opportunity, attracting competitors to develop same invention.

The bias against trade secret protection becomes even stronger if there is an aversion to accepting the potential consequences associated with the independent development and patenting of the same invention by competitors.

Patenting is the preferred choice when its deterrence power is high or when licensing potential for the invention is attractive. Generally, patents, rather than trade secrets, are the favoured vehicles for licensing. The value of patents as licensable rights increases where:

  1. the territorial reach of a business organization is limited;
  2. the invention is embodied in a non-core technology;
  3. the invention relates to a disruptive technology; and
  4. the patent landscape is fairly crowded and there is a concomitant increase in the risk of an infringement claim by a competitor.

Patenting may also be necessary to make potential investors feel more comfortable when financing the associated business venture. Further, patenting is more attractive where the innovator can realize value from the patent's ability to facilitate knowledge transfer, open the door to third party collaborations, and thereby inspire collaborative or third party development of foreground or improvement technologies which are potentially useful to the original innovator.

In parallel with filing a patent application, defensive publication of the invention could be effected so as to trigger more immediate prior art consequences, and assist in preserving the innovator's right to use the invention, versus waiting for the patent application to publish in the normal course of prosecution of a patent application (typically, 18 months after its filing).

Technologies that are relatively more valuable, and that are also susceptible to both patent and trade secret protection, may include more significant chemical/metallurgical process improvements or pioneering process technologies. In these cases, a bias towards patenting exists when the technology has been jointly developed, or where licensing is a desired business strategy, or where employee mobility is likely, as these circumstances increase the risk of information disclosure that destroys trade secret protection. As well, the bias exists where government regulation requires disclosure of information to a legislated body, such as the Energy Resources Conservation Board created under provincial legislation in Alberta, which, in regulating the design and construction of new oil & gas projects in Alberta, could force the disclosure of potentially valuable trade secret information in order to help evaluate the environmental impact of the project. The bias also exists, or is further strengthened, when there is significant risk that competitors will independently develop the same technology. Independent competitive development chips away at the exclusivity previously enjoyed by the original innovator who chooses trade secret protection, thereby undermining the original innovator's competitive position. If there is a belief that the competitor will choose to patent the independently developed technology, this, combined with an increased risk of infringement detection arising by virtue of an increased risk of information disclosure through third parties (ie. the joint developer, licensees, or former employees), increases the risk of exposure to patent infringement consequences, and further biases the decision-making towards patenting.

A decision-making tool, in the form of a flowchart, is attached, as a general guide to deciding whether any invention should be protected by way of patent, trade secret, or defensive publication. Of course, this tool is merely a guide, and could be modified so as to recognize further intermediate levels of value and risk and their relevance to possible outcomes, and also to suit personal preferences, objectives, and philosophies.

To view the Guide for Choosing Between Patents, Trade Secrets and Defensive Publication, click here.

To read the full-length version of this article, click here.

About Ogilvy Renault

Ogilvy Renault LLP is a full-service law firm with close to 450 lawyers and patent and trade-mark agents practicing in the areas of business, litigation, intellectual property, and employment and labour. Ogilvy Renault has offices in Montréal, Ottawa, Québec, Toronto, Calgary and London (England), and serves some of the largest and most successful corporations in Canada and in more than 120 countries worldwide. Find out more at

Ogilvy Renault joins Norton Rose Group on June 1, 2011.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.