Trade Secrets and Nanotechnology

The Nature of Trade Secrets

A formula, a protocol, or other data might well enjoy this kind of protection as long as the information is kept secret, and it is valuable for that. The protection conferred by trade secrets, though, is not just referred to the final product of research activities. In fact, especially in the domain of material sciences, where outcomes can be unexpected, all information relating to the process that led to the final product can be extremely valuable as well. In some jurisdictions the protection of trade secrets is sanctioned by the existence of ad hoc legislative provisions whereas in others, trade secret protection is accorded against unfair competition practices.

Trade Secrets versus Patents

The major distinction between trade secrets and patents is formal. A patent is a title conferred upon the applicant by a governmental or para-governmental entity whereas a trade secret is confidential information, which can be valuable and assignable and may also constitute a valid claim to bring an action against who misappropriates it. The other distinct differences between the two concepts are the length of protection and the scope. In fact, the duration of a patent is generally 20 years from the filing date, whereas a trade secret may potentially be infinite. The scope is also different between the two forms of protection. In the case of the patent, the information—which must be disclosed to the public in the pat-ent—cannot be used to perform the invention, literally, or in an equivalent manner by third parties, whereas the trade secret is by its very nature nonpublic and its value is critically linked to this characteristic. To preserve the secrecy of information, employers usually ask their employees and contractors to sign nondisclosure agreements and/or noncompete agreements, and restrict the access to facilities and resources as well.

Nanotechnology and Trade Secrets

One of the major characteristics of nanotech companies is that they are usually spin-off ventures stemming from the academic environment. This also means that those companies are often relying substantially on the intellectual property protection that is used to entice potential investors. In this regard, the idea of having a trade secrets portfolio rather than a patent portfolio can appear not that appealing, since, as it has been noted, trade secrets can vanish in a single day should the information be disclosed or otherwise known as opposed to the protection granted by patents which can last, globally, for 20 years from the filing of the application.

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