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 independently.
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 book value.
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.
