Submitted by: Submitted by royston15
Views: 329
Words: 3181
Pages: 13
Category: Business and Industry
Date Submitted: 10/07/2012 10:28 AM
Introduction
A trade secret is something not generally known to the public or readily available to people outside an organization that gives that company a competitive advantage over others (Jocke 2011). Commonly known to most people, examples of trade secrets are formulas, processes, techniques, and recipes (Klein n.d.). Trade secrets can also consist of customer lists, marketing strategies, or sources of supply just to name a few (Jocke 2011).
Trade Secret Protection over Patent Protection
As there are some advantages of trade secret protection over patent protection, many organizations nowadays have chosen to protect their trade secrets rather than acquiring a patent.
Firstly, a patent protection in general only last for a maximum of 20 years, whereas trade secret protection works in a way that as long as the information remains a secret, it is able to last for as long as possible (Jocke 2011). A good example will be Coca-Cola, who is able to protect their secret recipe for more than 100 years (Halligan and Haas 2010).
Secondly, when applying for a patent, a company is required to disclose their techniques or processes for their invention. Once the patent expires, the company’s secret will not have any value as information are revealed in the public domain, and anyone can use their ideas (Klein n.d.). But some companies will choose to keep its secret for many years, so that they could be ahead of their competitors.
Lastly, a patent protection typically requires an amount of costs, whereas trade secrets do not need to have any registration costs (Clarke, Sweeney and Bender 2011). Although keeping the information confidential might lead to a higher cost.
Drawbacks of Trade Secret Protection
However, there are also some drawbacks in using trade secret protection. For instance, there may be an accidental “public” disclosure from the employees that leads to loss of protection (Jocke 2011).
Organizations may require employees and contractors to sign...