Decide between a patent and a secret before you sell
Patents and trade secrets protect against different threats, and selling a product can close the patent option.
Lesson 1 of 8 · 5 min
Two different kinds of protection
A trade secret is information that has independent economic value and that you protect with "reasonable measures" (18 U.S.C. § 1839). Its weakness is that the law does not stop anyone who reaches the same result honestly. Independent invention and reverse engineering, which means working out how a product was made by studying it, are both allowed (Kewanee). A patent can stop those people too, but you must tell the public how the invention works, and the right expires.
What each path gives up
A US patent application stays confidential until it publishes, at about 18 months. You can ask the US Patent and Trademark Office (USPTO) not to publish, but you must certify that you will not file abroad, and a later foreign filing must be reported within 45 days (35 U.S.C. § 122).
If you keep a secret, federal law offers injunctions (court orders to stop), damages and up to 2x exemplary damages, which are extra damages meant to punish, with a 3-year time limit (18 U.S.C. § 1836). Agreements with employees and contractors need a whistleblower immunity notice, or the employer loses exemplary damages and fees against that person (18 U.S.C. § 1833). If someone else later patents the same thing, a prior commercial user has only a personal defense, not a right to exclude others (35 U.S.C. § 273).
Questions to ask
These factors are our judgment, not law.
- Reverse engineering. If the product reveals the invention once it is on sale, that favors a patent. If a process or formula cannot be derived from the product, that favors a secret.
- Lifespan. Value within about 20 years favors a patent. Value likely to last longer favors a secret.
- Independent discovery. If competitors are likely to reach the same idea, that favors a patent.
- Enforcement. A need to stop independent developers favors a patent. A secret only works if secrecy can actually be maintained.
- Financing and licensing. A need for a visible, licensable asset favors a patent. An internal know-how edge favors a secret.
Why the timing matters
Make this choice before you sell. A sale can count against a later patent even when the buyer is bound to confidentiality (Helsinn).
In our judgment, patenting what the product reveals while keeping manufacturing know-how secret needs a patent attorney's review. We have not researched how far an application may hold back know-how. This lesson also does not cover state or non-US trade secret law.
Timeless wisdom
Inventors have long had to pick a lane. Judge Learned Hand's rule, quoted by the Supreme Court, is that the inventor "must content himself with either secrecy, or legal monopoly" (Pfaff). The Court has also explained why the choice matters: "Where patent law acts as a barrier, trade secret law functions relatively as a sieve" (Kewanee). A secret protects you only against improper taking. Reverse engineering and independent derivation are not improper means (18 U.S.C. § 1839).
What's current
As of November 6, 2026
Helsinn (2019) and Celanese v. ITC (August 12, 2024) mean a secret-plus-sales strategy can forfeit later patents. Sales of a product made by a secret process trigger the on-sale bar, the rule that a sale can block a later patent, against later process claims (Helsinn; Celanese). We did not check whether Celanese drew a rehearing or Supreme Court petition.
European Patent Office decision G 1/23 (July 2, 2025) makes a marketed product prior art, meaning earlier material that can block a patent, in Europe even if it cannot be analyzed (OJ EPO 2025, A68).
One law firm reports that Trinidad v. OpenAI (N.D. Cal., January 5, 2026) dismissed a federal trade secret claim where the plaintiff pleaded no secrecy measures and developed the material through ChatGPT. We have not read the order (Foley Hoag).
Key takeaways
- A patent can stop independent developers, but it discloses the invention and expires.
- A trade secret can outlast a patent, but it does not stop reverse engineering or independent invention.
- Selling a product can close the patent option, even when the sale is confidential.
- Make the choice before your first sale, not after.
Check your understanding
Sources
The Academy is general education, not legal advice, and reading it doesn't create an attorney-client relationship. Patent law and fees change, so check the linked sources and have a registered patent attorney or agent review your situation before you file. Obsidyan sells patent software, including AI drafting tools, so weigh what these lessons say about AI tools with that in mind.