Q: I have an invention that I want to patent, but I'm concerned about the cost.
How do I know if it's better to keep it a trade secret instead?
A:
A patent is a business tool. It is a way of helping you make more money than you would without it. And getting a patent is expensive.
But to answer your question, there are some rough guidelines to keep in mind:
(1) Your cashflow from the patented product should be significant. You have to make sure that the additional money that your business makes far outweighs the cost of the patent. If you are making $1M+ in sales, then you probably want to patent; if less than a few hundred thousand, then probably not
(2) Your product should be really new and much better than what is already in existence. If it not new, then you won’t be able to get much of a patent on it. If it is not much better than what is already on the market, then a patent on it may not be very useful to you.
(3) Your product can be reversed engineered too easily. If your competitor buys your product, or service, or machine, looks at it, and can more less figure out how to make it himself, then a patent would be valuable to you. If, on the other hand, your competitor looks at it, takes it to his lab, but his scientists or engineers can’t figure out what makes your invention work, or how to produce it, then it may be OK just to keep the production of it a trade secret.
(4) Your product is something that customers really want. In a free market, a customer has 3 options: buy your product, buy one of your competitors’ product, or do without. If your product is patented, the customer’s option reduces to two: take it or leave it.
In any case, you should talk to a patent lawyer to figure out if it makes sense to patent your invention.
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