The legal regimes for patents and trade secrets aim to stimulate creative and innovative activities – the former by recognising exclusive rights and punishing their violation and the latter by preventing certain conduct, such as misappropriation or breach of contract, which may affect confidential information. When it comes to protecting new technologies, it can be difficult to decide between the trade secret regime and patent protection. There are obvious differences between each system, although they can act in a complementary way.
The reasons for keeping information secret include:
- the time and cost of obtaining a patent;
- the payment of annual taxes; and
- the limited duration of a patent right.
The risk of a patent application being rejected should be assessed, as it involves public disclosure and trade secrecy is therefore lost.
The trade secret regime is not a foolproof form of protection, as it is impossible in many cases to prevent information from reaching competitors. Further, due to a lack of exclusivity, the same technology might be developed independently by others (eg, through reverse engineering).
If a third party obtains confidential information and uses it as the basis of a patent, the patent will be valid and the third party will be able to bring legal action against any other party that exploits the information without its consent (including the party that first developed the information in question).
Previous possession of invention
A party that does not disclose its inventions may opt for the protection provided by the rules on industrial secrecy. The principle of 'previous possession' relates to when a party prefers to keep its invention a secret rather than opting for protection through the patent regime. Courts in Germany, France and Spain have found that a second party's patent claim could not prevent the original inventor from using its invention.
The applicable Argentine legislation in this regard is silent on the principle of personal possession. The denial of the right of previous possession encourages inventors to disclose their creations by patenting them, thus contributing to technological progress.
For further information on this topic please contact Daniel R Zuccherino at Obligado & Cia by telephone (+54 11 4114 1100) or email ([email protected]). The Obligado & Cia website can be accessed at www.obligado.com.
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