Has the Patent Outlived its Usefulness? Trade Secrets May Supersede

Written by Roxanne Andrieux

From an innovator’s perspective, is the global patent system archaic and obstructive?  Let’s posit a few considerations.  Patents are:

  • Illiquid – less than 1% are ever licensed.
  • Slow – designed for past technology cycles, not for today’s cycles which are much shorter, and often shorter than the five years usually needed to obtain a patent.
  • Expensive – many companies, even countries, are excluded from global markets because of the cost (e.g., US $400,000 to protect a patent family).
  • Indefensible – small and medium enterprises cannot defend their patents against larger companies and infringers.
  • Complex – the patchwork of international rules makes the system unnecessarily complex and expensive.

Are TRADE SECRETS the alternative to patents?

Ideation believes that Trade Secrets can be used in the same way that patents are traded. In fact, Trade Secrets are becoming better recognized and more laws are being developed to protect them.

What’s more, the Trade Secret can be found by people searching for technology using public search engines. Using advanced technologies, a Trade Secret can be recorded on the blockchain and encrypted. This is possible with Fully Homomorphic Encryption, Software Defined Perimeter technology and user behavior analytics – big data style analytics that moves cybersecurity from the qualitative to the quantitative.

Trade Secret Wax Seal Roxanne Andrieux

History of the Trade Secret

62 years ago, Amedee Turner, a European member of parliament and a Queen’s Counsel Intellectual Property Barrister, published his book, “The Law of Trade Secrets.” He had been asked to review Nestle’s portfolio of confidential technology, when he realized there was no term for such company secrets, so he coined the term, “Trade Secret.”  Now, Turner is working with Ideation, creating a global infrastructure to facilitate global trade in Trade Secrets – while maintaining their secrecy. 

Essentials of the Market for Trade Secrets

For the Trade Secret Marketplace to function, certain mechanisms must be in place:

  • A globally unique and unintelligent numbering system to identify every Trade Secret without revealing its content, owner, or time of invention. We use a six-character identifier that is globally unique, yet randomly assigned.
  • State-of-the-art cybersecurity – We use two state-of-the art technologies that have never been compromised.
  • Inexpensive, yet effective, arbitration – We provide an initial level of arbitration that can be appealed to the World Intellectual Property Organization when desired.
  • A global ledger that tracks rights (particularly, exclusive rights) without compromising the secret itself – We use blockchain technology to ensure a universally available ledger that cannot be tampered with.

Global Trade Roxanne Andrieux

Imagine an enterprise resource planning (ERP) tool for innovations that is also a platform connecting a trusted community of reviewers, collaborators, licensees, agents, and investors, who serve academia, commerce, and governments. Traditionally, ERPs are used for financial, physical, and human resource assets. Now there is an ERP for the intellectual, intangible category of assets.

How can we keep an innovation secret, yet market it to the world? With Fully Homomorphic Encryption, a document can be searched for keywords while remaining encrypted. Trade Secrets, of course, lose their protected status if they are not treated as secrets.  Ideation’s gateway allows one to take the keyword, which is open to the major search engines, but the person searching doesn’t actually see the information found. To protect against the loss of secret status, an ERP, with its database of innovations, prevents access to anyone without a non-disclosure agreement (NDA). The person performing the keyword search may request access of the owner, who then chooses whether or not to respond. The owner can reveal their identity, issue a NDA, and draw up a license with a smart contract, all of which can be readily accomplished quickly within the ERP. 

Blockchain also protects transparency. While maintaining secrecy, potential licensees still need to be assured that the rights they are purchasing are available – particularly if the rights are exclusive. To enable this, Ideation maintains a global blockchain registry that tracks every transaction, for every Trade Secret, without compromising its secrecy. This process is the basis of an open and trusted marketplace for Trade Secrets.

Patents will likely continue to be used, but the applicants will likely register a family of Trade Secrets around a main patent, making the technology available for licensing as a complete portfolio. Technological developments in data protection also are helping.  Know-how can be marketed while remaining encrypted, and Trade Secrets can be traded. Furthermore, people can become aware of the Trade Secret existence.  Particularly for early-stage inventors, Trade Secrets have advantages over patents for technological and financial reasons.

Trade Secrets may become a parallel infrastructure to patents for managing and trading intellectual assets, as we can now market them while they remain encrypted.   


About The Author

Roxanne Andrieux

Roxanne Andrieux

Director, Ideation

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