Patent or Trade Secret?

IP Strategy for Life Science Startups

Please note: Machine translated. Please refer to the original Japanese for accuracy. For overseas firms, doing business in Japan typically requires Japanese-speaking staff or local support.

Patent vs. Trade Secret Comparison

Comparison Item	Patent	Trade Secret
Governing Law	Patent Act	Unfair Competition Prevention Act
Subject of Protection	Inventions (subject to requirements like novelty, inventive step, etc.)	Useful technical or business information (subject to requirements like being kept secret)
Nature of Right	Exclusive right (to exclude others from practicing the invention)	Protection from unauthorized acquisition, use, etc. (a relative right)
Term of Protection	Generally 20 years from the filing date	Perpetual as long as it remains a secret
Disclosure of Technology	Published 18 months after the filing date	Not disclosed
Independent Development by a Third Party	Can be asserted as infringement	Cannot be asserted
Reverse Engineering	Can be asserted as infringement	Cannot be asserted
Cost	Costs for filing and maintenance (relatively high)	Costs for maintaining secrecy (relatively low)
Primary Use	Business monopoly, licensing, appeal for fundraising	Concealing manufacturing know-how, maintaining a competitive edge

Protection by "Patent"

A system where the state grants a strong exclusive right for a certain period (generally 20 years from filing) in exchange for disclosing an invention. This allows for the legal prevention of unauthorized implementation by third parties.

Advantages

Clarifies the uniqueness and legal protection of technology
Advantageous in fundraising and alliance negotiations
Enables monetization through licensing

Disadvantages

Technology is disclosed 18 months after filing
Risk of encouraging design-around inventions
Costs for obtaining and maintaining the right

【Reference】

Overview of the Patent System, Japan Patent Office, https://www.jpo.go.jp/e/system/patent/gaiyo/index.html

Protection by "Trade Secret"

A method of protection by managing valuable technical or business information as a secret (black-boxing know-how). It can potentially maintain a competitive advantage indefinitely as long as it remains secret.

Advantages

No fixed term of right (perpetual as long as it's secret)
No need to disclose the technology
Can protect know-how that is difficult to patent

Disadvantages

Cannot counter independent development or reverse engineering
Risk of information leakage (e.g., through employee turnover)
Must meet legal requirements such as "secrecy management"

【Reference】

Trade Secrets, Ministry of Economy, Trade and Industry, https://www.meti.go.jp/policy/economy/chizai/chiteki/trade-secret.html (Japanese)

TIPS

For life science startups, patents are nearly equivalent to corporate value, so IP strategy is fundamentally patent-centric.

It is recommended to consult with a patent attorney specializing in this field as early as possible.

A good approach is to use a free spot consultation from MEDISO, and then retain a patent attorney for paid support in IP strategy planning and patent filing.