“Hybrid“ or Mixed Strategy for Patents and Confidential Information
It is possible for companies to use hybrid strategies by combining both forms of IP. For example, companies might choose to keep certain aspects of their product or processes secret and rely on confidential information/trade secret protection. They may also simultaneously file patents in respect of other aspects of the same product or process.
ACME Inc. produces biofuels from carbon-based materials. The process of creating the biofuels is achieved through the use of a bioreactor and certain micro-organisms.
The company filed for patents in the United States, the European Union and Japan over the bioreactor in 2005. However, it also relied on confidential information/trade secret protection to protect the identity of the micro-organisms, an element that was not essential for the validity of the patent for the bioreactor. ACME Inc. waited until 2008 to file for patents on the micro-organism, thereby prolonging its monopoly over the micro-organisms for a period of time that was three years longer than the 20-year patent term. Through this hybrid strategy, ACME Inc. derived a competitive advantage over its competitors, who would be able to manufacture the bioreactor in 2025 but would not be able to use the specific micro-organisms to complete the biofuels process until 2028.
Although ACME Inc. might have been able to preserve its confidential information/trade secret protection over the micro-organisms indefinitely, it obviously thought it a better strategy to eventually obtain a patent, even if this resulted in the disclosure of the secret.