There is a fundamental conflict between keeping an invention as
a trade-secret, and seeking a patent to cover it. The underlying
bargain for granting a patent is that in exchange for the exclusive
right to practice the invention, the applicant for patent has to
publicly disclose the invention rather than keeping it secret.
A valid patent has to contain a complete and enabling disclosure
of the invention. So if a patent applicant witholds signficant
information from the disclosure, then the patent may be invalid
because the disclosure is incomplete. A patent has a limited life
(a Canadian patent expires twenty years from the filing date) and
is only enforceable within the relevant jurisdiction. So a Canadian
patent is only effective within Canada. Patent applications are
subject to substantive examination, and if the application is not
approved then no patent will be issued.
A trade secret has no fixed term and there is no system of
registration. Potentially a trade secret can remain confidential
for ever. But if an invention is treated as a trade secret, there
is a risk that a third party may reverse engineer it, or may come
up with the same invention separately. If a third party
independently makes the same invention, then they could potentially
obtain a patent on the technology themselves and then the original
developers (having chosen to keep their discovery confidential)
could potentially be sued for patent infringement.
Some issues to consider when deciding whether to pursue patent
protection or to rely on secrecy include the following:
Not all inventions are patentable. To be patentable an invention
must be novel, inventive, have utility, and must not be subject
matter which the law excludes from patentability.
Some technology may be easy to reverse engineer, or it may be
very likely that third parties will make the same invention
Patenting can be expensive. If potential patent protection is
not going to provide a meaningful commercial advantage, then the
costs of patenting may not be justified.
Patent filings are assets of a company and can have substantial
Even if a company does not wish to aggressively pursue and
enforce patents, a good patent portfolio can be a valuable
defensive resource. The possibility of a counersuit can discourage
vexatious litigation and encourage settlements.
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.
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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