Don’t hide your light under a bushel! Or a quart, pint or gallon
During the Year of Food, leading Belfast law firm Cleaver Fulton Rankin is providing helpful legal articles for the Northern Ireland food and drink industry. For the Brewing and Distilling month, Associate Solicitor Michael King, talks about the differences between patents and trade secrets for recipes and processes.
Don’t hide your light under a bushel! Or a quart, pint or gallon.
To patent or not to patent? That is the question.
There is currently a thriving craft beer and bespoke local drinks industry with new beers, gins, and other delicacies being launched onto the local drinks scene. From a brewer’s or manufacturer’s point of view, it may be worth exploring if the processes involved could enjoy intellectual property rights, as brewers can use the law to their advantage.
A trade secret can be “know how” or “show how – knowing how to do something, for example, a secret recipe or knowing the way to do something. It remains enforceable as a trade secret, as only as long the information is secret.
A patent however protects novel inventions capable of industry application. Therefore, brewing, distillation and other processes in relation to the manufacture and distribution of drinks may be patentable. In this case, the inventor is given a 20 year monopoly in exchange for showing the world how the invention works.
Trade secrets can be inventions or manufacturing processes that do not meet patentability criteria or do meet the criteria but the inventor choses to keep the invention secret. There are pros and cons to both approaches.
Trade Secrets
Trade secrets are not limited in time as long as they remain a secret, unlike patents which last for 20 years. There is no cost or administration involved unlike the patent process.
However, a trade secret can be particularly vulnerable to reverse engineering. It may be difficult to keep it secret. As soon it is no longer secret there is limited recourse only against those who disclosed it. A trade secret may be patented by someone who developed the information independently.
Patents
Like all registered intellectual property rights, patents can be easier to deal with i.e. transfer, assign and licence rights and have a quantifiable commercial value. Patents can also be easier to enforce because there is objective evidence of a particular right. With current technology, it can be easy for a competitor to analyse a drink for its ingredients. Patents can protect against reverse engineering.
Patents also benefit from the Patent Box. This is a scheme whereby HMRC offers tax advantages for companies that register patents. Thus a company may decide to register a patent for financial reasons over and above the benefits of innovation. The key is the level of innovation not the particular industry.
The downside to patents is that the process can be expensive and lengthy. After a certain amount of years, there will also be annual renewal costs.
There is no doubt that patents can be relevant to the brewing industry. There are techniques and processes which could be patentable. The question for the individual company will be if patenting is right for it. It will have to consider the following factors:
• Is the process patentable?
• Is it worth patenting? i.e. the costs of the patent as against the potential benefit; and
• Can the company keep a trade secret i.e. does the company trust its employees and third parties it deals with?
Patents are highly technical documents. If a company is considering a patent, it should consult a patent attorney who can advise on whether it meets the criteria and the scope of protection available.
If the company wants to keep a secret, it should ensure that it employee contracts have sufficient protections in relation to confidentiality and that third parties to include potential investors and business partners sign up to non-disclosure (or confidentiality) agreements. Many of the most successful companies maintain trade secrets such as recipes for soft drinks and fried food. It’s clear the employees can keep those secrets, but the question is, can yours?
Please note: The content of this article is for information purposes only and further advice should be sought from a professional advisor before action is taken.
