Patents or trade secrets? 8 questions to ask
Ask eight questions to decide whether patents or trade secrets best govern how your assets turn into revenue, margins and loyalty, say Tamara Moll and Mathias Karlhuber at Cohausz & Florack
As the cost of protecting patents escalates, many ventures ask themselves whether it would better to keep their IP a secret. As part of a clear plan for building your IP portfolio that fits your needs and actually makes a difference, you should consider both, protecting your revenue streams and putting legal theory second. For each asset, ask yourself eight questions:
1) Detectability and reverse engineering
Is the asset recognisable from the outside or can it be traced through testing, disassembly or benchmarking?
Yes, easily visible or reproducible: patent.
No, not recognisable: trade secret.
2) Replicability by third parties
Is independent redevelopment by competent third parties likely (state of the art, tools, team size)?
Yes, re-creation realistic: patent.
No, re-creation unlikely: trade secret.
3) Lifespan and rate of change
Is the economic value short-lived (months, rapid iterations) or long-lasting (years/decades)?
Long-lasting, rarely changed module: patent.
Short cycles / frequent adjustments: trade secret.
4) Patentability and need for exclusion
Is the asset (a) patentable (no grounds for exclusion, inventive step plausible) and (b) do you need strong exclusionary effect against everyone (core technology / platform)?
(a) yes and (b) exclusion desired: patent.
(a) no/uncertain and no external visibility: trade secret.
5) Organisational capacity for secrecy
Is reliable secrecy realistic (need to know, contracts, protocols, training)?
No, governance not sustainable: patent.
Yes, governance sustainable: trade secret.
6) Disclosure and timing
Is disclosure imminent (launch, approval, standardisation, publication)?
Yes, disclosure foreseeable, so apply in advance: patent.
No, no disclosure planned and low recognisability: trade secret
7) Budget and time
Are the budget and schedule compatible with a patent application, including duration/costs?
Yes, resources available: patent
Budget/time limited; ongoing confidentiality measures feasible: trade secret
8) Separability of external/internal (hybrid option)
Can visible external components and internal parameters/recipes be cleanly separated?
Arguments in favour of hybrid: patent externally visible features; treat internal fine-tuning (parameters, tolerances, recipes, pipelines) as trade secrets.
• The full article by Tamara Moll and Mathias Karlhuber, ‘Patents or trade secrets? Questions to ask’ appears in Managing Intellectual Property Today, 2026/27 edition. See here for details.
