The following is excerpted from the above-titled article by R. Mark Halligan (Nixon Peabody) in the July/August issue of Landslide (a publication of the ABA Section of Intellectual Property Law):
There are four types of intellectual property rights: patents, copyrights, trademarks, and trade secrets. Only two of these intellectual property rights protect information: patents and trade secrets. Patents protect information by dedicating the information to the public in return for a limited monopoly. Trade secrets protect information with independent competitive value derived from the secrecy of the information.
The traditional calculus for patent versus trade secret protection has now undergone a major transformation. Recent decisions in patent law have weakened patent protection. In contrast, trade secrets have flourished with broad protection and with a wide range of available remedies.
...a proprietary method for hedging risks such as the one at issue in In re Bilski can be protectable as a trade secret if the business method is kept secret. However, by pursuing patent protection unsuccessfully, the inventor has lost both patent protection and trade secret protection because the business method is now in the public domain. This is the “Catch-22” with any patent application disclosed to the public during the USPTO patent prosecution proceedings in the United States.
Read the full article here.