Patents and Trade Secrets – Protecting What Makes You Different

At some point in building a company, every founder asks themselves: “Do I actually have something here that needs protecting?”

It’s a fair question. Maybe it’s a piece of technology you’ve poured months into. Maybe it’s a process that gives you an advantage. Maybe it’s the “secret sauce” that makes your product work in a way competitors can’t copy.

If any of that sounds familiar, you’re in the territory of patents and trade secrets — two different ways to safeguard what makes your business unique.

Two Ways to Lock It Down

When it comes to protecting innovation, you really have two paths: keep it confidential or claim it publicly. Both can work. The choice comes down to what fits your business.

Trade secrets: stay quiet, stay protected.

If your advantage is something you can keep behind closed doors — like a recipe, algorithm, or internal process — a trade secret is often the simplest route. There’s no registration, no government process. You protect it by limiting access, using NDAs, and simply… not talking about it with outsiders.

The upside? It can last indefinitely. The downside? The moment someone figures it out or leaks it, it’s gone. You don’t get a second chance.

Patents: stake your claim in public.

Patents flip that on its head. You publish how it works, and in exchange, you get exclusive rights to stop anyone else from using it for 20 years. This is common for tech, hardware, and other innovations where competitors could reverse-engineer your work anyway.

There are a few flavors — utility patents (how it works), design patents (how it looks), and provisional applications (a temporary placeholder that lets you test the waters).

So Which One Makes Sense?

There’s no universal answer. If what you’ve built works best in the shadows — like a formula or internal process nobody else sees — secrecy might be smarter. If you’re selling something the world can examine, and exclusivity is key, patents are often worth it.

Many founders start with a provisional patent to buy time. Others skip patents altogether, focus on speed, and rely on trade secrets for as long as they can. Both approaches can work — it’s about what fits your company.

The trade-off is time and money. Patents are an investment: filing often costs five figures, and it can take a couple of years before you even get an issued patent.

What Investors Care About

Patents (or at least “patent pending” in your deck) can add credibility. But most investors won’t write a check just because you filed one. They care more about whether you’ve thought through how you’ll protect what’s defensible in your business. A smart IP strategy — even if it’s “we’re keeping this internal for now” — goes further than filing for the sake of it.

The Takeaway

Patents and trade secrets are just tools. Neither is automatically “better” — it depends on how your company creates value and what you can realistically maintain or enforce.

The Power of Community (Post-Credits Scene)

Some businesses don’t worry about protecting proprietary technology at all. Their competitive advantage is an energetic, loyal community. The technology is often open source, but competitors can’t match the community that has gathered around the product/environment/platform/etc. Community-building is an intriguing end-around or addition to a patent. It takes time and hard work, but that’s exactly why once you have it, your competitors will have a hard time catching up.