Patent or Trade Secret

Registration of a patent is an effective method to protect the intellectual property of a company and claim the exclusive ownership of a technology. However, because of the consequent publicity, it will also allow for easier imitation when the patent’s documentation is publicly revealed. Alternatively, a company may choose to keep the information private as a trade secret, but internal procedures must be adopted to prevent disclosure. The following are some factors to be considered when taking appropriate protection of IP rights by a company.

1.Different Requirements for Right’s Granting:

According to the Patent Law of China, any invention or utility model for which a patent may be granted must possess novelty, inventiveness and practical applicability. Whereas, granting of a trade secret has a relatively lower threshold. In China, for technical information not qualifying as a patent or business operational information (such as a client list or specifications of a client’s products) but which should be unknown to the public, and has economic value to the company, can be protected as a trade secret as long as the company has adopted processes to maintain confidentiality.

2.Protective Measures For Trade Secrets:

Recently, more companies choose to delay the filing of a patent even when the invention will meet the requirement for patent application, and have alternatively set up a strict procedures and sophisticated measures to protect their trade secrets, including
a. categorizing of technical documentation as normal, intermediate secret, and confidential, and restricting document accessas appropriate.
b. have employees and business partners sign non-disclosure agreements to prevent any improper disclosure or use of proprietary information without prior approval.
c. adding a non-compete clause to the employment contract is another practical way to prevent an employee who has access to trade secrets to work for a competitor.

3.Patent Detection:

Filing a patent is rewarding against the competitors manufacturing same or similar products also the intangible assets generated will also be reflected and evaluated during M & A transactions subsequently. After investing resources, money and effort when conducting research and development, many companies urge an immediate filing for a patent. This relies heavily on valid research, analysis and opinion from patent professionals in terms of identifying patentability. “Patent detection” is a cost-effective service for those companies who wants to identify and detect the potential patent rights that could be protected by law. In this process, IP professionals would arrange a series of meetings with the chief engineer, program developer and technicians to help the company analyze, categorize, divide, and select the most valuable and innovative points and advise on suitability for patent registration. A small fee is applicable for the initial consultation service, and at that point the potential costs would be submitted to the client for investigation of the possible innovation points and preparation and submission of the documentation.

Our experienced IP team is a department of Watson & Band, a comprehensive law firm with more than 300 professionals, which is regarded as a top tier law firm within the IP area. Our IP legal service includes detection, registration, and filing invalidation requests to the State Patent Re-examination Board, anti-unfair competition practice. You may contact us via our public account for more information.