This article is written by Annu Gond, Pt.Som chandra Dwivedi Vidhi
Mahavidyalay,Prayagraj(U.P.), B.A.LL.B,5th year during her Internship at Ledroit India.
List of topics covered in article
- A brief overview
i) What is patent?
ii)What is trade-secret?
iii)Trade secret vs.patent?
- Introduction
- Protection strategy on your invention
- Illustrations
- Case laws
- Conclusion
Patents and trade secrets are generally considered alternative means of protecting inventions, they can work together in earlier stages of the innovation process. Thus, the best solution to protect an invention may rely on multiple forms of intellectual property protection. While a patent can protect inventions or innovations, a trade secret can also protect information like data, client lists, software, and other things that can be kept as a trade secret. Patents and trade secrets differ from each other primarily due to the nature of intellectual property rights protection each of them offers.
Ex:- a company’s unique customer list, a secret recipe(e.g., KFC’s chicken recipe).
Patents
Patent is a legal document granted by a government, giving the owner exclusive rights to use, produce, and sell their intellectual property for a limited period, typically 20 years.A patent protects inventions that include new and useful processes and improvements. The rights include the right to exclude others from making, selling, using, or importing the patented invention. However, in exchange for exclusive rights, the patentee must disclose their invention publicly.
Ex:- a new type of engine, a pharmaceutical drug.
Trade Secret
A trade secret can be any business information that derives its value from its secrecy. It can be a method, a technique, a process, research and analysis data, a formula, a recipe, a device, an instrument.The trade secret generally holds value to others who cannot obtain it legally and requires reasonable efforts to maintain its secrecy. The protection provided by a trade secret is very different from that provided by a patent. Some examples of trade secrets include recipes for Coca-Cola, Google’s search algorithm, KFC’s chicken recipe, etc.
Patents vs. Trade Secrets
As patents and trade secrets provide different types of protection, deciding between the two generally depends on the type of innovation a patentee is trying to protect.
Patents and trade secrets are mutually exclusive in many aspects. However, a comprehensive Intellectual Property strategy combining patents and trade secrets can be commercially beneficial for a business and bring greater value to a patentee or an organisation. The most successful Intellectual Property strategies generally use a blend of both patents and trade secrets.
Keywords: intellectual property,patents,trade secrets,legal
Introduction
Suppose you have developed a gaming programme for youth , After a year you decided to launch it publicly.You saw a great response from the public. Now you are worried that this programme might get copied from someone. What would you do for protect it?
Now, imagine your mother runs a bakery shop.one day she experimented and created a new kind of pudding.she started mass production of puddings and over the months the shop was known for pudding.what was the secret recipe? Do you want it to be known by the people? What will you do to keep this as a secret?
Both the word patent and trade secret may seem similar but they are different from each other.
‘Patent’ means the right which are granted to any person , who has invented something noival, unusual and innovative whereas ‘trade secret’ can be defined as any formula or any technique which is kept as a secret.
Patent and trade secret are most relevant form of intellectual property rights. A patent provides a limited-time monopoly on an invention in exchange for public disclosure for a 20 years, while a trade secret protects confidential information for an indefinite period.
Which protection strategy suits your invention in india?
Intellectual property rights (IPR) provide the legal framework to protect your ideas, inventions, and brand identity. India, with its growing economy and vibrant entrepreneurial ecosystem, has established comprehensive laws to secure these rights. Understanding how to protect your intellectual property rights in India can help you maintain a competitive edge and avoid costly disputes.
Intellectual property rights are legal rights granted to creators and inventors to protect their original works and inventions. These rights encourage innovation by giving creators exclusive control over the use of their creations for a certain period. In India, the government has enacted various laws to regulate and enforce these rights, including the Patents Act, Trademarks Act, Copyright Act, and Designs Act.
Choosing between a trade secret and a patent depends on several factors, including the nature of your innovation, business goals, and risk tolerance. Consider the following:
- Is your invention patentable?
Protects novel and useful inventions.
- How long do you need protection?
Trade secret:- Indefinite, as long as the information remains confidentiual.
Patent:-20 years from the date of filing (can be extended in some cases).
- Can your invention be reverse-engineered?
If competitors can easily reverse-engineer your invention, a patent may be necessary. Trade secrets are best for information that can’t be easily replicated, like proprietary processes or confidential data.
- Do you have the resources for patenting?
Patents can be costly to obtain and maintain, so trade secrets may be a more cost-effective option for smaller businesses.
Trade-secret illustrations:
•Coca-Cola’s secret formula: A red and white label with the Coca-Cola logo on a bottle with a padlock over it.
•KFC’s secret recipe: A chicken with 11 herbs and spices and a padlock over it, or a drawing of a chef with a secret recipe in a vault.
•A manufacturing process: A diagram of a manufacturing process with a “secret” stamp on it, or a factory with security guards watching it.
Patent illustrations:-
•The curvy, iconic shape of the original Coca-Cola bottle.
•The ornamental design of furniture, jewelry, or the exterior of a car.
•Computer icons, like emojis, and the design of a user interface.
Relevant case laws:-
M/S Gujarat Pottling Co.Ltd. & Ors vs The Coca Cola Co. & Ors on 4 August, 1995
In the Gujarat Bottling Co. Ltd. v. Coca-Cola Ltd. case, the Supreme Court upheld a Bombay High Court injunction preventing the Gujarat Bottling Company (GBC) from manufacturing other soft drinks at its plants after a one-year notice period. The ruling affirmed the lower court’s order that GBC could not bottle any beverages other than Coca-Cola during the notice period, which was based on the terms of their agreement.
Background: The case involved a dispute between Coca-Cola and its bottler, Gujarat Bottling Company (GBC).
Core Issue: GBC sought to use its bottling plants to manufacture beverages for other brands after the one-year notice period in their contract had expired.
Lower Court’s Decision: The Bombay High Court issued an interim injunction prohibiting GBC from manufacturing any other brand during the one-year notice period.
Supreme Court’s Ruling: The Supreme Court upheld the Bombay High Court’s order, finding that the injunction was valid and dismissing GBC’s appeal. The court’s decision reinforced the contractual obligations of the bottler and the enforceability of the one-year notice period.
John Richard Brady And Ors. vs Chemical Process Equipments P. Ltd. And … on 6 July, 1987
Equivalent citations: AIR1987DELHI372, AIR 1987 DELHI 372
In this case, the defendant was not allowed to sell or further manufacture a machine which had been innovated after he had got to know confidential information from another party . It was held that irrespective of whether there is a contract which governs the production or not, any information which had been disclosed cannot be put for unfair use as this against the principle of equity.
Steer Engineering Private Limited vs Glaxosmithkline Consumer Healthcare … on 18 October, 2019
Equivalent citations: AIRONLINE 2019 KAR 1965, 2020 (1) AKR 147
Bench: Chief Justice, Mohammad Nawaz
In this case, steer engineering as a company which specialises in food and manufacturing of drug delivery systems and it developed an extrusion process for popular product (horlicks) , there was a dispute regarding the extrusion process Glaxosmithkline had already developed a product on their own which did the same function as what was made by steer engineering . The trial court held that the agreement entered relating to the intellectual property was confidential under the master service agreement and was the confidential information of the Glaxosmithkline and had nothing to do with the supplier.
Prof. Dr. Claudio De Simone & Anr. vs Actial Farmaceutica Srl.(Formerly … on 17 March, 2020
Equivalent citations: AIRONLINE 2020 DEL 592
In this case, plaintiff was a owner of a manufacturing company for drugs and had the patented formula in the U.S., he agreed on importing to it in India . The plaintiff entered into a separate agreement entered with the defendant and revealed information which was meant to be a trade secret. The plaintiff did not have a patent for the same in India, and after his patent expired,the defendant company manufactured the same product. The delhi High court held that the information that was treated as a trade could not be considered as one,and once the patent has expired all the information comes into a public domain and cannot be further protected based on being a trade secret.
Parviom Technologies Private Limited vs Karthik Devraj And Others on 16 September, 2022
Conclusion
While a patent can be used for protecting information in the form of an invention subject to fulfillment of certain conditions, a trade secret can be used for protecting any information. It is noteworthy that patent rights can be used for preventing any third party from using the invention in any manner. However, trade secret protection can be agitated only when there is any kind of misuse. In the case of a patent, there must be a disclosure of all the information but in the case of a trade secret, the secrecy of information is to be maintained.
For maintaining a trade secret, only certain restrictive practices need to be developed, however, for patenting any invention, a patent application must be filed before the respective patent office, and after grant annuity has to be paid. Therefore, expenditure in the case of maintaining a patent is much more than maintaining trade secrets.
Also, the term of protection is limited to 20 years in the case of patents but if appropriate practices are maintained, a trade secret can be protected for an infinite time.Both trade secrets and patents offer important legal protections, but they serve different purposes. Trade secrets are ideal for businesses that want to keep proprietary information confidential for as long as possible. Patents, on the other hand, provide a powerful legal right to prevent others from using or selling an invention, but at the cost of public disclosure and a time limit.
Patents and trade secrets offer different types of protection, so choosing between the two will depend on the type of innovation you’re trying to protect.Works that are protected by copyright may also include trade secrets. This most commonly occurs in computer programs and testing materials. The U.S. Copyright Office has special procedures for registering computer programs that contain trade secrets.
In other instances where a copyrighted work contains a trade secret the applicant can request special relief from the Copyright Office to take steps to ensure that the trade secret is not disclosed in the registration application. Both trade secret and patents are powerful tools for protecting intellectual property but they operate in fundamentally different ways and serve strategic purposes. A patent is legally enforceable against others who use the invention, even if they independently create it, whereas a trade secret is only protected against theft or misappropriation and is not enforceable of a competitor independently develops the same information.
Trade secret are not protected under laws and regulations in India.The concept flow from the common law principle of equity, breach of confidence and contractual information. These principles are relevant in india.There is no formal registration required under this. Trade secret can also be protected as copyright laws. In patent anything to be patent must meet the following requirement:- novel, usefulness, unique.Getting a patent is very long process . But it is important to get a patent for your invention as it will build a higher market share and more recognition.This will also increase the monetary value of the product.
