At Hansen Reynolds, we understand that the decision to pursue patent protection is not a one-size-fits-all approach. As our partners Toby Reynolds and Matt Gavronski discuss, multiple strategic factors come into play when determining whether to patent an invention or keep it a trade secret.
The Value of Trade Secrets
“Patents are great, but they only last about 20 years,” Matt points out. “You need to apply analytical thinking – is this something worth disclosing to the public? Because that’s the deal with getting a patent.”
If an invention is difficult to reverse engineer from the product alone, keeping it as a trade secret may be the wiser path. Trade secrets can provide protection indefinitely, as long as they remain confidential. The classic example is the Coca-Cola formula, which has remained a trade secret for over 90 years.
Patent Considerations
On the other hand, patents grant a limited monopoly and make inventions publicly known. This route may be preferred if licensing opportunities exist or if cross-licensing could be leveraged against potential patent infringement claims.
“Sometimes patents also have horse-trading value down the road,” notes Toby. “If someone threatens to sue you, it’s nice to have some patents in your back pocket to maybe trade with them instead of having to pay a ransom.”
As Matt confirmed while consulting with in-house counsel for a large telecommunications company, in some fields a preferred strategy is to patent as many developments as possible so future disputes can be resolved through cross-licensing arrangements.
Factors for Patent Prosecution
When evaluating whether to patent, companies must weigh factors like the invention’s competitive advantage, potential for monetization through licensing, and alignment with the company’s goals.
Rather than leaving it to the inventor’s unbridled enthusiasm, Matt advises, “It’s best if patent decisions are part of the product development process, with a patent review committee providing analysis.”
The more lawyers integrate with clients’ innovators and processes, the better they can guide patenting strategy. “Once you understand what’s driving the innovation, you can make an educated decision on viability and expenses like patentability searches,” Matt states.
No Universal Solution
Ultimately, there is no universal answer to patenting. Each situation requires a nuanced strategy tailored to the client’s circumstances, industry, and patent portfolio.
“It depends on if you’re a new startup in an emerging technology or a legacy company that has operated in its space for decades,” explains Matt. “With that context, you can optimally advise when and if patenting is the right move.”
By truly understanding our clients’ businesses and immersing ourselves in their innovation processes, Hansen Reynolds serves as a trusted strategic advisor on patent prosecution and IP protection.