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Patents and trade secrets seem like opposite sides of a scale. Trade secrets derive their legal protection from their inherently secretive nature, whereas patents can be protected only through disclosure of the invention—the specification in a patent application must describe the invention in a manner that would enable one with ordinary skill in the art to make and use the invention without an undue amount of experimentation.
In fact, a patent will be invalidated if the important details of the invention are not described in the specification.
In Malaysia, as a party to TRIPS and other agreements, the rights granted to patent owners include the right to exclude others from making, using, or selling their inventions. A trade secret, as long as it is kept secret, gives the owner an advantage over its competitors. However, it should be noted that for information to qualify as a trade secret according to Malaysian law, it must meet two criteria: it must be kept confidential and reasonably protected.
Similarly, patents and trade secrets can be exchanged for economic benefit through licensing, or they can be used as a negotiating asset when selling or buying a company or planning a merger.
Typically, IP owners prefer patent protection if:
- The invention can be easily reverse-engineered;
- They are anxious that a competitor may be inventing something that is similar; and/or
- They need to publicly disclose their ideas—eg, when startups need to pitch their business ideas to potential investors.
Trade secret protection is preferred when, for example, an IP owner has a manufacturing process that does not meet the patentability criteria. Trade secret protection may also be preferred by IP owners if:
The life of the product is shorter than the 20-year life of a patent—such as in an area of technology where inventions evolve very quickly; or
They expect the life of the product to be substantially longer than 20 years—such as in the case of Coca-Cola.
Coca-Cola has held its formula as a trade secret for decades and has successfully kept the public from knowing its secret recipe. If Coca-Cola had sought patent protection instead of keeping the formula secret, it would have become known to others, and once the patent expired, anyone could use it.
Combining these two types of protection can be tricky, but many IP owners have managed to combine them to further elevate the value of their inventions.
An example of such a combination is by Wyeth (now part of Pfizer) for its product Premarin, the brand name for an oestrogen medication that consists of conjugated oestrogens extracted from the urine of pregnant mares. It is marketed for the treatment of menopausal symptoms. A series of patents were issued on the manufacturing process of the drug in the 1940s.
In addition to these patents, Wyeth decided that instead of patenting the oestrogen extraction process, it would keep the process as a trade secret. So, even though the patents expired long ago, Wyeth is able to maintain exclusivity to the drug. To date, there is still no generic form of Premarin available.
This hybrid patent/trade secret protection is also documented in other industries; it is most suitable for inventions that can be further broken down into sub-inventions. For example, hybrid protection is common in the food industry where recipes, lists of ingredients or formulas are kept secret, while cooking, manufacturing or packaging processes are patented.
"Hybrid protection is common in the food industry where recipes, lists of ingredients or formulas are kept secret, while cooking, manufacturing or packaging processes are patented."
The type of protection chosen depends on the short, intermediate and long-term goals of the IP owner. These goals may differ with every invention. As both types of protection play an important role in a comprehensive IP strategy, consideration should also be given to protecting the same invention by both methods.
Hawa Diyana Saim is a registered patent and industrial design agent at Henry Goh. She can be contacted at: firstname.lastname@example.org
WIPR jurisdiction report, Malaysian patent, TRIPS, invention patent, patent protection, Hawa Diyana Saim, Henry Goh