[Patent Talk] Is Patent Protection Always the Answer for New Technology? Patents vs. Trade Secrets

This is a column by our patent attorney Taeyoung Lee, published in Etoday on October 13, 2020. It discusses the strategic choice between protecting an idea as a patent or as a trade secret.

[Patent Talk] Is Patent Protection Always the Answer for New Technology? Patents vs. Trade Secrets

As awareness of patents has grown, many people assume that whenever a new technology is developed, patent protection is always the best option. That is usually true, but strictly speaking it is not always the case. Patents and trade secrets both fall within intellectual property rights, but they differ in nature. To run a business successfully, a strategic decision is needed, whenever a new technology or product is developed, on whether to protect it as a patent or as a trade secret.

A patent right arises only when an application is filed with KIPO (the Korean Intellectual Property Office), a government agency, and the patent is registered. Once registered, the patent confers an exclusive right, lasting until 20 years from the filing date, under which no third party may use the patented technology without permission. However, the patented technology is published 18 months after the filing date. This is because the patent system is designed to grant the patentee a monopoly for a limited period while promoting industrial development by disclosing the invention to the public.

By actively exploiting patent rights, a company can block competitors from entering its business altogether, or delay their entry by forcing them to develop design-around technologies. For example, Qualcomm in the United States holds the foundational patents for code division multiple access (CDMA), and many telecommunications companies that use CDMA pay it license fees of roughly 5 to 6% of their sales. Gillette, well known for building strong patent portfolios, likewise uses dozens of patents for each new product to prevent competitors from copying it in the first place.

Trade secrets, on the other hand, protect production and sales methods and other technical or business information that is kept confidential, and the rights arise without any registration procedure. To be protected as a trade secret...

(For the full column, please click the link below.)

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