A new trade deal between the U.S. and China will have an enormous impact on how the two countries interact. One of the largest ramifications could address problems involving trade secrets, but that isn’t guaranteed to make them the preferable option.

In the past, China required U.S. companies to transfer technology over to Chinese companies in order to enter the market. Presenting technology that is protected by trade secrets is an exercise in trust, to be sure. While the pact signed Wednesday says this will no longer be a requirement going forward, you may still want to think twice about protecting your precious ideas with a trade secret label.

Close to the vest

Trade secrets differ a good deal from protections like patents, and it certainly does have some benefits. A trade secret typically lasts as long as it remains a secret, while a patent requires upkeep and will expire after 20 years. There are no costs for registering a trade secret, aside from those used to keep the information secure. That said, it all hinges on confidentiality, and there are ways that you could lose protections.

Behind the mystery

Problems can arise when your secrets get lose:

  • Reverse engineer: Just because you haven’t put the blueprints of your idea out for the world to see, doesn’t mean they aren’t going to look. The competition can attempt to reverse engineer your output to determine how it all fits together.
  • Public access: When someone picks apart your ideas and puts them back together in public, that’s where they’re likely to stay with trade secrets. Anyone can have access to it at that point, and use it as they see fit under the limited protections for trade secrets.
  • Subject to patents: If your trade secret does suffer a breakdown, there may be someone there to pick up the pieces – and they may have a legitimate claim to your idea. A company that determines the special ingredients of your concealed information through acceptable means could go on to patent that information for themselves.

Guarding your secrets can come with unique challenges, but it’s imperative if you want to find protection in trade secrets. Understanding if secrecy will work for you can depend on the nature of your ideas, and how you’ll present them to the world.