To Patent or Not to Patent, That is The Question

#secret by Christian Ditaputratama licensed under CC BY-SA 2.0

#secret by Christian Ditaputratama licensed under CC BY-SA 2.0


Certain unpatented intellectual properties, such as trade secrets and proprietary information, can be of utmost importance to a business. For example, it is believed that the lasting success of The Coca-Cola Company is attributable to one of the world’s most guarded trade secrets – the Coca-Cola formula.


Trade secret generally means valuable business information that is not known to others and has been maintained in secrecy. In Canada, misappropriation of trade secrets may give rise to remedies in contract, property, tort laws and in equity, if there is unauthorized use of a person’s confidential information to the detriment of that person.


Unlike patents, trade secrets are vulnerable to a third party’s discovery. As soon as the secret is discovered through an examination of the product or other honest way, the discoverer has the full right of using it.


More fundamentally, because trade secrets and confidential information are rooted in the relationship of confidence, they cannot simply be characterized as “property”:


The word property as applied to . . . trade secrets is an unanalyzed expression of certain secondary consequences of the primary fact that the law makes some rudimentary requirements of good faith.  Whether the plaintiffs have any valuable secret or not the defendant knows the facts, whatever they are, through a special confidence that he accepted.  The property may be denied but the confidence cannot be.  Therefore the starting point for the present matter is not property . . . but that the defendant stood in confidential relations with the plaintiffs, or one of them.


As a patent requires full and complete disclosure of the invention, a patented product or process cannot be simultaneously protected by trade secrets. However, under some circumstances patents and trade secrets may coexist with respect to a complicated system. For example, one of the components of the system can be patented while the design parameters and process required to make and install the whole system can be maintained as secrets.


Trade secrets are strategic choices that are opposite to patents in nature. Therefore, any decision about going one way or the other should be assessed on a case-by-case basis.



Sufficiency of Patent Disclosure Rests on Bargain Rather Than Guessing


Gambling by Alan Cleaver licensed under CC BY 2.0


The patent system is based on a “bargain” between the inventor and the public: the inventor receives exclusive rights in his or her new and useful invention for a limited period in exchange for complete disclosure of the invention to the public.


Consistent with this policy rationale, the inventor is required to disclose everything that is essential for the invention to function properly. In particular, the patent disclosure must define the nature of the invention, and must describe how the invention is put into operation. A failure to meet the first condition would invalidate the patent application for ambiguity, while a failure to meet the second condition would invalidate it for insufficiency.


To meet the sufficiency requirements, the patent disclosure must correctly and fully answer each of the two questions: (1) “What is your invention?” and (2) “How does it work?”


Further, the disclosure must enable a person skilled in the field of the invention to produce the invention using only the instructions contained in the disclosure and to make the same successful use of the invention as the inventor did. In essence, insufficiency is a technical attack on the validity of a patent, and would succeed when the skilled person could not put the invention into practice. For example, obscuring the true invention and leaving the skilled reader guessing may amount to insufficient disclosure.


Thus, as noted by the Supreme Court of Canada, a key question would be:


“Is the public getting what it ought to be getting in exchange for exclusive monopoly rights?”


As one would expect, insufficient patent disclosure that fails to uphold the inventor’s end of the bargain will result in a voidable patent.