Is Trade Secrecy Always Possible?

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The possibility of protection and a company’s capability to protect a secret is indeed an important factor to be considered while defining the nature of protection. Though many factors may be in favor of trade secret protection over patent protection, the incapability of an organization to maintain secrecy is a very important factor and may shift the balance.

The kind of information sought to be safeguarded, measures required for protection, nature of business, organization’s stature, and so on play a very important role in defining a company’s capability to protect a trade secret. If the information sought to be protected is of a nature that it can be easily understood from available sources or from the products of the company, then patent protection may be preferred. For example, the composition of a vegetable salad may be easily ascertained from the product and patent protection may be a better option. (The assumption here is that the composition is patentable.) However, trade secret protection may be a better option if the information is a process for making cakes.

A company may not be capable of protecting information because it may not have the resources to implement measures required under the trade secret law. Furthermore, if the nature of a company’s business is such that the information must be accessible to a large number of people it may not be possible to maintain secrecy. For example, if the information sought to be protected is a machine for making fiber, which has to be operated by many workmen, secrecy may not be easily maintainable.

Under such circumstances, patent protection may be a better strategy. On the other hand, an apparatus to carry out blood tests, which is operated by only one individual or a few individuals may be maintained as a trade secret if the company is not interested in selling the machine over the shelf. Decision-making with respect to the strategy of protection may vary based on many factors, whose weight may vary based on the circumstances. Before making a decision on protection strategy, every company must carry out an analysis of all relevant factors including the capability of a company to maintain secrecy by assigning appropriate category weight. It is important for a company to evolve a model that includes all relevant factors and enables objective decision-making.


Authored by Dr. Kalyan C. Kankanala

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