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Trade secrets

According to some observers, the US Patent system is undermining innovation.   In KSR International versus Teleflex Inc., the US Supreme Court ruled that  patents must be “more than the predictable use of prior art elements according to their established functions” or  in my layman’s words, you can’t patent something that should have been obvious.  The drug industry is worried that this obviousness test could apply to  controlled-release drugs, polymorphs, new dosages and formulation, enantiomers, etc.

An alternative to patenting ideas is to keep the IP a trade secret.  A trade secret can be defined as   Any information that is (i) secret, (ii) used in a business, and (iii) which confers upon its owner a business advantage over competitors who do not know or use the information.  This information can include  formulas, patterns, designs, compilations, programs, devices, methods, techniques, data or processes.  An example of a trade secret is Coca-Cola’s formula for its flagship brand.

Use Patents When: Use Trade Secrets When:
-Long market life -Not eligible for patent protection
-Can be reverse-engineered -Short life cycle
-Protection can/will be enforced -Patent hard to enforce
-Corporate policy -Hard to reverse engineer