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Trade Secrets

Trade secrets: I discuss trade secrets because they are a possible alternative to obtaining a patent. An inventor who applies for a patent must describe the invention in the patent application. In fact, the patent application must describe the invention in sufficient detail to enable another technically knowledgeable person to make and use the invention.  

Thus, patent law provides for a trade-off. The inventor is given a patent, which for a limited amount of time, prohibits anyone who is not the inventor from practicing the invention. In return, the inventor must disclose the invention to the public. After the term of the patent has expired, the patent no longer prohibits anyone from practicing the invention.

Trade secret law is an alternative for an inventor who wants to keep the invention secret indefinitely. Most states, including the state of Washington, have adopted a version of the Uniform Trade Secrets Act. Oregon has also adopted a trade secret statute.

Under Washington law, a trade secret can include a variety of commercial information, including formulas, programs, devices, methods, techniques, or processes. RCW 19.108.010(4).  

To qualify as a trade secret, the commercial information must have actual or potential value because the information is secret and because it is not ascertainable by proper means by persons who could obtain economic value from using or disclosing the information.  RCW 19.108.010(4).

But, to obtain the protection of the trade secret law, a person must take reasonable efforts to maintain the secrecy of the information.  RCW 19.108.010(4).

Oregon has a trade secret statute with a similar definition of a trade secret. See: Oregon Revised Statutes 646.461.
There are disadvantages to protecting an invention only as a trade secret. First, there may be considerable expense and time involved in taking reasonable efforts to maintain the secrecy of the commercial information. If these reasonable efforts are deemed inadequate by a court, then there is no trade secret protection. Or, if through lack of care, the information becomes public, the trade secret protection is lost.

Also, trade secrets to not provide any protection against another inventor who independently invents the same invention. Trade secret law only protects the theft or misappropriation of the trade secret. Independent invention is a defense. On the other hand, independent invention is not a defense to a patent infringement lawsuit.

One advantage to trade secret protection is that this type of protection has no expiration date. As long as the trade secret remains secret and reasonable efforts are made to keep it secret, the trade secret protection can be maintained. In contrast, patents have an expiration date. 

However, an inventor may not be able to obtain a patent if the inventor first protects the invention as a trade secret for more than one year and then decides to instead obtain a patent. For example, the courts have adopted a doctrine of forfeiture. They have ruled that an inventor cannot obtain a patent on a secret process or method if the inventor has been selling unpatented products produced by the secret process or method for more than one year.  D.L. Auld Co. v. Chroma Graphics Corp., 714 F.2d 1144, 1147(Fed. Cir. 1983). So there is a choice that must be made between patent protection and trade secret protection. If the inventor chooses trade secret, selling unpatented product made by a secret method, after a year the right to a patent is lost under the above rulings.  

The above are just some of the topics relating to patents and trade secrets that should be discussed with an attorney before choosing whether to obtain a patent or to rely on trade secret protection. The above is a simplified discussion. No effort has been made to describe all the possible technicalities that may be applicable in a given set of circumstances. The above is not intended as legal advice, but instead is general information. No responsibility is assumed for anyone taking or not taking any action based on the above information.