What’s the difference between a patent and a trade secret?
The main difference between a patent and a trade secret is that a patent is disclosed to the public and protected with a federal registration while a trade secret is protected because it is non-disclosed, confidential business information.
A patent is an invention that meets the USPTO’s patentability requirements (proper subject matter, new, useful, and non-obvious). A patent must be registered, but once you have a utility patent, your invention is protected for 20 years from the date on which the application was filed.
A trade secret, on the other hand, is confidential business information that is not known to the public, used in business, and gives the owner an economic advantage over competitors that do not know or use the trade secret. A trade secret must be kept confidential and is not registered with the government. A trade secret only receives protection so long as it kept confidential and not widely known by the public. There are pros and cons to whether you choose to have your invention patented, or protected by trade secret. Give us a call for a consultation if you would like to know more.
What is an NDA, and why do I need it?
An NDA is a contract between parties that prohibits the party receiving confidential information from (a) sharing that confidential information with others, unless allowed by the contract, or (b) using that confidential information in a manner that is not allowed by the contract. NDAs can define “confidential information” broadly or specifically, and should always protect the recipient’s most precious corporate secrets (examples include price and term sheets, marketing plans, and growth strategy).
Be careful in using NDA templates you find online. A good NDA is customized to fit your unique situation. NDAs often become exhibits in court if the recipient of confidential information steals it and uses it for their own benefit, so have a lawyer draft yours.