Patent the secret?

Autor: Francisco Moreno (Abogado, Socio fundador)


We have already talked in this blog about the figure of the business secret, regulated in the Law 1/2019, of Business Secrets. Suffice it to say that this regulation protects any kind of information or knowledge of a secret nature, which reports an actual or potential business value precisely because it has that nature, and provided that adequate measures have been adopted to protect it.

However, it sometimes happens that such information or knowledge that can be protected as a business secret, consists of an invention that could also be protected by a patent or by a utility model, in accordance with the provisions of Law 24/2015 on Patents.

Both ways, the business secret and the invention patent (or, if applicable, the utility model), are, in principle, exclusive: the patent and the utility model are rights that are recorded in a public register, so that information about the invention will be available to the whole public. This, of course, eliminates any possibility of claiming the application of trade secret regulations on that information published in the register.

Thus, the owner of the invention at this fork in the road must decide which way to go. There is no single solution at this point, and a case-by-case analysis must be carried out to determine which form of protection is the most appropriate. In such analysis three fundamental differences must be taken into consideration:

The patent right is an exclusive right temporarily limited to 20 years, or 10 years in the case of the utility model. However, a business secret is essentially infinite, as long as the requirements for protection continue to be met.

A trade secret does not protect its owner against those who obtain the same information or knowledge independently. On the other hand, the owner of a patent can claim his right against any third party who may develop the same invention even by his own means.

From a tax point of view, income from the assignment of business secrets cannot benefit from the reduction provided for in Article 23 of Law 27/2014 on Corporate Income Tax. In the case of patents, this reduction can be applied (patent box).

In short, it is always advisable to carry out a prior exhaustive analysis, which weighs up the advantages and disadvantages in the specific case of each of the forms of protection. Once this analysis has been carried out, the appropriate business decision must be taken.