Secret know how

For business-critical formulas and recipes

Sometimes secret know-how, a trade or production secret, is worth more than a patent. Think of recipes for perfumes (e.g. Chanel), drinks (e.g. Coca-Cola) or a working method (e.g. a smart purchasing or sales process). If necessary, check whether the invention is new at the European Patent Office (EPO) by visiting www.epo.org. In most cases, it is advisable to consult a patent attorney with a specific specialisation.

When is it wise to keep an invention as secret know-how instead of applying for a patent?

It is wise to keep an invention as secret know-how instead of applying for a patent when its value lies precisely in its secrecy. Think of situations in which a working method or recipe is virtually impossible for third parties to discover. A patent requires you to make your invention fully public, after which competitors have free rein once the (maximum 20-year) protection period has expired. There is no time limit for secret know-how: as long as you manage to keep it secret, it remains exclusive. However, it is a misconception to think that secrecy is always easier: protection does not lie in registration, but in your own measures to actually keep it secret.

What are the risks associated with keeping know-how secret instead of obtaining a patent?

The biggest risk? You have no formal exclusive right. If a competitor discovers your method independently or learns about it from a former employee, they are free to use it – and there is little you can do about it legally. Another risk is information leaks: one carelessly shared document, an insecure IT environment or a lack of proper confidentiality clauses in contracts can be enough to lose your competitive advantage. In addition, proving the existence and content of your know-how can be difficult in the event of a dispute, especially if you have not systematically recorded it yourself. In short: secret know-how requires strict internal procedures, reliable people and watertight legal safeguards. Many companies underestimate this and thus lose valuable intellectual capital. Do you want to be sure that your secret really remains a secret? We are happy to help you develop the right strategy.

How do you weigh up secret know-how against patent law?

Patent law has disadvantages that mirror some of the advantages of secret know-how. These include aspects such as temporary validity, the costs of an application, combating counterfeiting, the public nature of a patent and “managing” confidentiality. You do not “get” exclusive rights, but you create them with secret knowledge. However, even if there is a patent, infringements can still occur.

The choice for secret know-how requires considerations of an operational, technical, commercial and financial nature… and courage. This is partly a legal matter on which we can advise you, but also partly a practical matter.

Can a patent for the new working method or new product still be applied for later during the secret know-how phase? How should you deal with parties such as former employees acting in bad faith or your competitors? Do you remain entitled to continue to exploit your secret knowledge? And can you sell your company and your secret know-how separately? The IP specialists at Fruytier Lawyers in Business can advise you on this matter based on their knowledge of both theory and practice.