Introduction

Intellectual Property Rights (IPRs) are the abstract assets created by the human intellect. Several governments have taken massive steps by creating legal frameworks to protect such assets. These assets are protected through various means that are intended for the benefit of the innovator /creator, for disclosing their invention. This also includes providing the innovator with an option to have a monopoly over the product/service that they have innovated.

Some of the widely accepted and known IPRs are patents, trademarks, copyrights, and geographical indications. These rights are protected through statutory laws.

However, there are also lesser-known IPRs, such as trade secrets. There exist certain differences between trade secrets and patents, which has been explained below.

What are 'Trade Secrets'?

The main aim of the doctrine of IPR laws is to encourage and assist new technologies, artistic expressions, and inventions, in an attempt to advance the economic growth of the country. However, it is not always expedient to protect a company's inventions or intellectual assets through patents alone. Here, Trade Secrets are of great value, as they offer to protect confidential information, such as secret(s) having high commercial viability. Many companies, especially in the food and beverages industry, keep such Trade Secrets, for example, the secret formulae or recipe used to make the carbonated drink Coca-Cola, recipes of KFC, etc.

There are no registration or filing requirements in place for trade secret protection yet, therefore, there are high risks associated with such trade secrets. The risk highest particularly when a secret is revealed to a third party. When such a thing happens, the major impacts may be unauthorized copying and duplicate products/processes, which would also lead to a severe economic impact on the actual owner of the Trade Secret. Hence, the company has to take greater measures on its own, to protect such classified information to maintain its secrecy to the maximum level possible.

Another aspect of Trade Secrets is that they offer a profitable option to companies for protection, since they don't require to fulfil any governmental regulations, like applications or registrations. Further, they also provide the companies many advantages, like permanent monopoly, until the secret is passed on to a third competitive party. But, Trade Secrets also have their drawbacks. Amongst all the IPR protections available, they are considered to be the weakest. This is because in case there is a failure on the company's part to protect the secret, the company loses any protection of its products. Therefore, it depends on the company to keep the secret secure, and with it, the protection for its products.

What are 'Patents'?

Patents provide protection, through monopoly, for a limited period, which is normally 20 years for the disclosure of the information to the public. In the case of patents, after a patent is registered, competitors have access to the products, their manufacturing processes and/or the formula used. This fosters healthy innovation competition. It not only increases the economic significance but also results in technological advancements based on the already innovated products.

However, the monopoly provided by a patent, for a period of 20 years, offers to exclude any other person or company from making, using or selling the invention without the consent of the owner(s) of the patent. Hence, if anyone violates this, they will be held to have infringed the protected inventions. This would further result in costly litigations, that might further lead to injunctions, payment of royalties and damages, etc. Therefore, any company, before using a protected invention, must take necessary legal steps like permissions, licensing, assignments, etc. Such measures ensure to protect the common economic interests and growth of both the patent holder, as well as the user. Further, patents provide protection as well as enable the innovator to gain larger market shares, control competition, control product pricing etc.

In addition to the above, patenting involves regulatory processes like filing and registration with stricter norms; they offer the highest protection to the inventions by stricter enforced under the law.