Alternative protection methods
You can use protective measures such as trade secrets, rapid production and development to great advantage. These may complement use of formally registered rights (such as patents and trade marks) or automatic rights (such as copyright).
A trade secret can provide effective protection for some technologies, know-how and other forms of innovation. Ideally, however, you should back it up by signing confidentiality agreements with every person who has knowledge of your secret.
A confidentiality agreement is often used to stop employees from revealing your secret or proprietary knowledge during and after their employment or association with your business. This agreement will give you evidence of your agreement and a legal recourse if it is breached.
Relying on trade secrets is useful when the IP is unlikely to result in registrable rights or you wish to retain exclusive use beyond the maximum lifespan of a patent (20 years).
The recipe for Coca-Cola and the KFC secret herbs and spices are good examples of long-kept trade secrets.
A trade secret strategy is most appropriate when it's difficult to copy the construction, manufacturing process or formulation from the product itself - that is, when reverse engineering is difficult.
Potential issues and problems
Secrecy does not stop others from inventing the same product or process independently and exploiting it commercially. It does not give you exclusive rights, and you might be vulnerable when employees with this knowledge leave your firm.
Trade secrets are also difficult to maintain over longer periods or when a larger number of people are aware of the secret. Secrecy is harder to enforce and protecting it is potentially more costly than registered rights because it relies on the complexity of proving a breach of confidence under common law.
For this reason, contractors and employees are often asked to provide written undertakings not to compete with your business after they leave. It is often much easier to prove this than to prove breach of confidentiality. These undertakings are difficult to enforce and may need to be prepared by your legal adviser.
Rapid production and development
Some products have a short life span and are produced quickly and put out into the marketplace before any competitor can copy or compete with the product. Businesses often adopt a strategy that combines the use of trade secrets with rapid production and development in order to protect these kinds of products. For products with a longer development and production cycle and higher research and development costs, a patent is usually more suitable.
Brand loyalty and rapid production
Building brand loyalty, usually with a trade mark, is a useful adjunct to a rapid production and development strategy, because once your product is in the market you can do nothing to prevent others copying it if you have decided against the protection of a patent.
Ensuring that customers recognise your brand as the market leader may therefore be the best way to gain the competitive edge.
Last Updated: 05/12/2012