Abstract

An invention can be protected by practicing it as a trade secret or by patenting it. The choice between these methods depends on both direct financial rewards and later marketing consequences, and on the nature of the innovation and the dynamics of the relevant technology. Trade secret protection is useful for a process that can be practiced without detection and where a patent would give only limited protection or be difficult or expensive to enforce. Patenting is favored when it is likely that the innovation will be made by others and when there is a larger investment to protect. Further differences, advantages, and disadvantages of these two methods of protection are described.