When dealing with business partners in the USA, England or Asia, or when taking investment from business angels or venture capital funds, you need to ask yourself whether to protect your ideas at all, when to start doing so, and how much it will cost to protect your concepts, intellectual property, technological solutions and patents. This question frequently arises in connection with developing software or computer programs, or selling software and mobile apps online via the Apple App Store or Google Play. Companies also face it when expanding abroad by setting up an LLC or a Ltd in the USA, England or offshore. The best people to advise you on these matters are experienced specialists in intellectual property, trade secrets, patents, tax and company law.
Confidentiality and Non-Compete Agreements
The primary means of protecting your ideas are confidentiality and non-compete agreements (also known as non-disclosure agreements and no-compete agreements). Such agreements are essential if you are to enjoy legally enforceable trade secret protection. Certain types of idea can, however, also be protected by patents, which are far stronger but also more expensive. The cheaper alternative – a provisional patent application in the USA – costs around €1,000, including the fees charged by the US patent office. If you need help preparing a provisional patent application, you should turn to specialists with a strong reputation and extensive experience gained through an associated law firm. There are several differences between confidentiality agreements, which safeguard trade secrets, and patents, which protect inventions. If you or your company own an invention that meets the criteria for patentability, you must decide whether to apply for a patent or keep the invention as a trade secret. After all, the fact that an invention can be patented does not guarantee its commercial success, so all the pros and cons should be weighed carefully before a patent application is filed. Depending on the patent system of the country concerned, trade secret protection may be provided for by law. In the Czech Republic, the concept of the trade secret was regulated by Sections 17 to 20 of the Commercial Code. Trade secret protection can be secured through confidentiality agreements or contractual terms in agreements with employees, customers or business partners. When making your decision, you should consider all the advantages and disadvantages that trade secret protection entails.
Advantages of trade secrets:
– No fees are payable for a trade secret – Trade secret protection does not require registration with a state authority, and the invention is not made public – Trade secret protection is not limited in time – Trade secret protection takes effect immediately
Disadvantages of trade secrets:
– Where the trade secret forms part of a product, others may “reverse engineer” it and thereby uncover the secret. – Trade secret protection is effective only against unlawful acquisition, use or disclosure. – The subject of the trade secret may be developed independently and subsequently patented by someone else. – The level of protection offered by a trade secret is considerably weaker than that of a patent. Although either method of protecting an invention may be considered sufficiently effective, the two very often complement each other. An invention is usually kept secret until it is published by the patent office, and very often the know-how needed to exploit it properly remains protected as a trade secret even after publication.