AI-Powered Innovations: Patent vs. Trade Secret Protection

Published on
June 5, 2024

The rapid advancements in AI have sparked significant interest in protecting AI-powered innovations. IP protection is crucial for fostering innovation, attracting investments, and maintaining a competitive edge. Two primary methods for protecting these innovations are patents and trade secrets. 

Patenting AI-Powered Innovations

Patents provide exclusive rights to an invention, preventing others from making, using, or selling the patented technology without permission for a specific period, typically 20 years from the filing date. For AI-powered innovations, patents can offer robust protection if the invention meets the following criteria:

1. Novelty: The AI innovation must be new and not previously disclosed in any prior art. Software to assess novelty and patent validity such as patlytics.ai are able to rapidly assess novelty of inventions with prior art.

2. Inventive Step: The innovation must be non-obvious to someone skilled in the relevant field.

3. Industrial Applicability: The AI innovation must be useful and applicable in some industry.

The advantages of patents include granting the holder exclusive rights to use their innovations, and strong legal protections for this use and against the use or replication of such technology by other individuals. However, this process does not come without disadvantages- alongside complexity of AI systems and the iterative nature of software (leading to the rapid development of further AI models that are more advanced than the originally patented model), the aspect of public disclosure of models can put companies at a disadvantage by revealing their methods to competitors.

Trade Secret Protection for AI Innovations

Trade secrets encompass any confidential business information that provides a competitive edge. Unlike patents, trade secrets do not require public disclosure and can potentially offer indefinite protection as long as the information remains secret. Primary advantages of trade secrets include the lack of disclosure required (companies can protect their AI innovations without revealing any details, preserving the confidentiality of their technology), and no expiry compared to patent protection terms. However, trade secrets are much more logistically challenging to maintain. Once a trade secret is leaked or independently discovered, it loses its protection. Maintaining secrecy can be challenging, especially with employee turnover and potential cybersecurity threats. Additionally, while trade secrets are protected by law, enforcing them can be more difficult than enforcing patents due to variability of IP laws across jurisdictions.

Choosing Between Patents and Trade Secrets

The decision to patent an AI innovation or protect it as a trade secret depends on various factors, including the nature of the innovation, the business strategy, and the competitive landscape. Companies focusing on rapid commercialization and short-term advantages might prefer trade secrets, while those looking for long-term, exclusive rights and willing to invest in the patenting process might opt for patents. In industries such as the tech industry, where maintaining secrecy is feasible, trade secrets might be preferred.

Conclusion

Both patents and trade secrets offer valuable protection for AI-powered innovations, each with its own set of benefits and challenges. The choice between them should be guided by a thorough analysis of the innovation's nature, business objectives, and market dynamics. With the utilization of tools such as patlytics.ai to analyze the details of existing patents and existing IP within markets that a company seeks to cater to with their AI product, the difference between use of patents or trade secrets can be clearly delineated.

The Premier AI-Powered Patent Platform

Your trusted partner in patent creation, protection, enforcement, and defense.