INTRODUCTION
A trade secret is an information that is classified as confidential and provides a company with a competitive advantage. As stated in Burlington Home Shopping Pvt. Ltd. v. Rajnish Chibber, if it were revealed to a rival, it would result in significant injury to the owner.1
Meanwhile, a patent is a unique privilege given for an innovation, that is a product or procedure that provides a structural reform for a challenge. An invention must meet the criteria for innovation, non-obviousness, and industrial usefulness in order to be eligible for a patent.
Trade secrets and patents fall in same domain but differ significantly which induces a lingering dilemma. When compared to trade secrets, patenting rights is expensive and requires adhering to compliance requirements. Moreover, patents require disclosure of information and is only protected for a limited duration of 20 years. The benefits of patent protection, however, are essential because even if an independent discovery is made, the initial product will still be protected by a patent.
This study proposal focuses on developing up a strategy for selecting an effective technique of intellectual property protection that is favourable to the organisation.
LITERATURE REVIEW
Various eminent scholars have drafted research papers in this domain judging the effectiveness of patents and trade secrets for IPR protection. The following review critically analyses these prospects.
"Unlike conventional incomplete contract models, we take into account not only the fact that the value of such knowledge is not verifiable, but also the imperfect excludability and non-rivalrous nature of knowledge." (Bhattacharya, Guriev, 2006) 2
Imperfect excludability refers to a situation when a potential buyer having access to information, unintentionally receives a portion of its worth, which could harm the seller's negotiation strategy. Meanwhile, it can be challenging for the seller to agree to an exclusive sale due to the non-rivalrous nature of knowledge. These factors, which clearly influences efforts to preserve intellectual property, must be carefully considered.
"Under patent law, due to compulsory publication of pending patent, an invention enters the public domain and after prosecution is completed, if the claims are not allowed, he is left without legal protection for his idea." (Mahon, John, 1968)3
Considering that inventions are immediately available, patents are unquestionably a dangerous strategy. Additionally, a person cannot rely on trade secret protection as the concept no longer qualifies as a secret and is made public knowledge. As a result, the advantages of trade secrets have eclipsed the idea of patents.
"Patents and trade secrets are not incompatible but complementary and obtaining the benefit of both can be accomplished." (McGurk, Michael, Jia, 2015)4
The previously proposed solution of combining trade secret and patent can be seen as an all-inclusive solution to the perennial problem. This idea is supported by the argument that the mere patent filing does not nullify the provision of trade secrets since the initial eighteen months of the patent application are kept private, making it clear that an applicant may file for trade secrets during that time while coming up with a new solution to protect the company's rights under IPR.
After analysing, certain issues surface which are objectivised and expected outcomes are also laid down to incentivise the research's future prospects.
ISSUES IDENTIFIED
The following loopholes and issues surfaced during analysis of the present literature:
- Does imperfect excludability and non-rivalrous nature of knowledge must be thoroughly thought of while participating in intellectual property protection?
- Do trade secrets supersede patents protection under the domain of IPR?
- Is intersection of patent and trade secrets, a comprehensive way to deal with IPR protection?
RESEARCH OBJECTIVES
- To determine the necessary pre-requisites before involving in a contract regarding IPR protection.
- To compare the impact of trade secrets and patents on intellectual knowledge protection.
- To sort a midway between the two approaches for an all-inclusive protection of IPR.
RESEARCH METHODOLOGY
The desired methodology for this domain of research is a mixture of doctrinal as well as non-doctrinal. The obvious reasons behind such choice are that trade secret protection requires recognising classified data and pursuing legal action against illegal disclosure, both of which are closely related to the doctrinal approach to legal analysis. The process for getting a patent, in contrast, includes performing a patentability search and developing a monetization strategy that considers the effects of patents on society and discusses the claimed knowledge in light of societal morality, leaning towards a non-doctrinal approach.
Therefore a mixed approach would expand the scope of the research by widening its ambit in field of patent and trade secret protection through legal analysation and social impact.
EXPECTED OUTCOMES
The research brought up a number of concerns; its most likely consequence is the discovery of a feasible solution to the problems. Various research outcomes that have been observed are:
- Patents and trade secrets come together in a dynamic equilibrium between publicity and secrecy. Moreover, trade secret protections are seen by the USPTO as "an adjunct to patent safeguard." Therefore, trade secret security is in a good situation than patents and must be used by the organisation for future protection their IPR.
- The lack of a formal law in place makes India's position on the matter of trade secrets unclear and hence utilizing trade secrets without any well drafted legislation would attract non ethical obligation and penal provisions. Thus, a well drafted policy solely designated for trade secrets must be devised to avoid the escalated problem
- While discussing the intellectual knowledge it might be challenging to show uniqueness of such inventions as the sole concern is non accessibility of information in public domain. Therefore, patents and trade secret must be used concurrently to gather the beneficial imparts of both approaches.
CONCLUSION
Companies increasingly depend on IPR, which make up a sizeable amount of many companies' assets nowadays. Almost any company's knowledge or technique that is kept confidential and that gives an edge over its rivals is now protected by trade secret law. Security of trade secrets may last indefinitely. However, special rights are also granted to the patent owner under IPR. All protection provided by trade secret law is lost the moment a trade secret is accidentally or intentionally released publicly.
Many commercial and marketing factors substantially influence the decision among patents and trade secret law. Moreover, this dilemma has crossed the company's legal decisions. In nutshell, certain approach suitable to the applicant must be followed and as researcher the choice must be taken by considering the requisites and balancing the pros and cons of trade secrets and patents and the inclusive approach of utilising them together.
Footnotes
1. Burlington Home Shopping Pvt. Ltd. v. Rajnish Chibber, 1995 IVAD Delhi 732.
2. Patents vs. Trade Secrets: Knowledge Licensing and Spillover, Sudipto Bhattacharya, Sergei Guriev, Journal of the European Economic Association, Vol. 4, No. 6 (Dec., 2006), pp. 1112-1147 (36 pages) https://www.jstor.org/stable/40005239.
3. Mahon, John J. Jr. "Trade Secrets and Patents Compared." Journal of the Patent Office Society, vol. 50, no. 8, August 1968, pp. 536-553. HeinOnline, https://heinonline.org/HOL/P?h=hein.journals/jpatos50&i=562.
4. McGurk, Michael R., and Jia W. Lu. "Intersection of Patents and Trade Secrets." Hastings Science and Technology Law Journal, vol. 7, no. 2, Summer 2015, pp. 189-214., https://heinonline.org/HOL/P?h=hein.journals/hascietlj7&i=226.
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