Should you keep your innovation a trade secret?

Why is it that Apple has a patent to legally protect its iPhone design, yet the secret recipe for Coca Cola is a trade secret? What is the difference between the two?

In part three of our patent series, we’re looking at how you can create a protection strategy for your invention. Remember, an innovation is not automatically protected by law – you must take steps to ensure it remains yours.

Maintain secrecy through a trade secret  

A trade secret isn’t formal protection, but instead relies on a small number of people keeping an invention or formula secret amongst themselves. A classic example is the secret recipe for Coca Cola, which is only known by a few company employees.

A trade secret can be a formula, practice, data compilation, process etc. Those who know the secret usually sign a confidentiality agreement, promising not to share the secret with anyone else.

While this will largely protect it from becoming public, a trade secret is not protected from misuse by the legal system. The invention or formula could be independently created by another party through research or reverse engineering. If they then take out formal protection, your invention could be considered as owned by someone else.

The advantages of trade secrets include no formal registration or protection costs, and protection for an unlimited period of time, providing those who know it keep it a secret.

Establish formal protection

Your second option is to establish formal protection over your work through a patent or industrial design protection. This gives you legal right of ownership, exclusivity and a competitive edge in the marketplace.

With formal protection, you can legally stop someone else who may have independently invented the same thing from selling or licensing it.

A patent can potentially become very valuable. You have exclusive rights to sell the innovation or license it to other parties. Licensing can be helpful for startups wanting to generate cash flow or expand into new markets. A patent can also be used to attract capital from organizations looking to fund your innovation, as they know you have the exclusive rights.

Before filing a patent, ensure you seek professional advice from a registered patent agent. A list of agents across Canada can be found here.



Mitacs empowers Canadian innovation through effective partnerships that deliver solutions to our most pressing problems. By driving economic growth and productivity, we create meaningful change to improve quality of life for all Canadians.