Trade Secret Vs Patents

Intellectual Property Rights (IPRs) are the intangible assets created by the human mind. The governments have taken immense steps by creating legal frameworks to protect these assets through various means intended for the benefit of the innovator for disclosing his / her invention. This includes the offering of monopoly to the innovator. The widely accepted and known IPRs are patents, trademarks, copyrights, and geographical indications, which are protected through statutory laws. This blog discusses the relatively lesser-known IPR, “Trade secret” and how it differs from the Patents.

Trade Secrets:

The main aim of the IPR laws is to promote new technologies, artistic expressions, and inventions while advancing economic growth. However, it is always not feasible to protect the company’s inventions / intellectual assets through patents alone. Trade Secrets are of great value in these circumstances and offer to protect confidential information, which is classified as a secret having high commercial viability. Examples of trade secrets include secret formulae/recipes like KFC, Coca-Cola, etc.

Since no registration or filing requirements are in place for trade secret protection, there are high risks associated with trade secrets, particularly when the secret is divulged to a third party. Unauthorized copying and duplicate products/processes are the major impact factors that would also result in a severe economic impact on the actual owner of the Trade secret. Therefore, the company has to take greater measures on its own to protect the confidential information to maintain the secrecy to the fullest extent possible.

Trade secrets offer a profitable option for protection since it does not have to fulfill governmental regulations like applications or registrations. Further, they also offer the companies many advantages like perpetual monopoly until the secret is divulged to a third party. However, they are considered to be the weakest of the IPR protections since it may lose its protection when there is a failure in the face of the company to take appropriate/reasonable measures to maintain the secrecy.


Patents on the other-hand offer protection through monopoly for a limited period i.e., normally 20 years for the disclosure of the information to the public. Since, competitors have access to the products, manufacturing processes, and/or formula after a patent request is filed, it promotes healthy innovation competition and would result not only in economic significance but also results in technological advancements.

However, the monopoly for a period of 20 years offers to exclude the others from making, using, selling the invention without the consent of the patent owners. Any violation of the above would ensue in infringement of the protected inventions and would result in the costly litigations that might result in injunctions, royalties, damages, etc. Hence, companies would always take necessary legal steps like licensing, assignments, etc. before practicing the protected inventions. These will ensure the protection of the economic interests and growth of the innovator companies. Further, patent protection enables the innovator to gain larger market shares, control competition, etc.

Additionally, patenting involves regulatory processes like filing and registration with stricter norms; they offer the highest protection to the inventions by stricter enforced under the law.

Author: Govindhaswamy Srinivasan, a Principal Associate – Patents at Khurana & Khurana, Advocates and IP Attorneys.  In case of any queries please contact/write back to us at

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