Secret Inventions

Jonas Anderson, American University Washington College of Law


Patent law - and innovation policy more generally - has traditionally been conceptualized as antithetical to secrecy. Not only does the patent system require inventors to publicly disclose their inventions in order to receive a patent, but various patent doctrines are designed to encourage inventors to forego trade secrecy. This Article offers a critique of the law’s preference for patents. In particular, this Article examines whether and under what circumstances the law should prefer patents over secrets, and vice versa. As an initial step towards a theoretically-supported system of inventor incentives, this Article constructs a framework that attempts to balance the public trade-offs of patenting and secrecy. Theoretically, the framework is based upon the insight that the fundamental economic rationale for the existence of the patent system - overcoming the market failure of informational public goods - is inapplicable when secrecy is viable. The framework highlights scenarios in which innovation can be advanced by encouraging secrecy, rather than patenting. The Article concludes by suggesting changes to current law that would encourage inventor use of secrecy, when appropriate.