Patents or Trade Secrets? When to Patent in Deep Tech Innovation

Why IP Strategy Matters for Deep Tech Companies

Protecting your business and products from being copied or otherwise exploited is always important, particularly for companies developing deep tech technologies. Advanced hardware, electronics, and the processes used to design, manufacture, or operate them, require a particular approach. Long development cycles and high upfront investment often delay commercial returns, making it essential to adopt an IP strategy that reflects how value is created, where technical advantage truly lies, and how competitors could realistically gain access to it.

Properly protected IP is widely recognised as a way of enhancing company value. This can be achieved by preventing others from using your technology without permission, but equally by creating defensible barriers that deter entry or imitation. A recurring strategic question for deep tech companies is whether protection should take the form of patents, trade secrets, or, more often, a carefully structured combination of the two.

Reverse Engineering and the Risk of Imitation

For a competitor to copy a technology, the relevant technical details must be known or discoverable. Physical hardware, such as circuit designs, can sometimes be reverse-engineered, although complex systems may require sophisticated techniques, including X‑ray imaging, electron microscopy, or focused ion beam analysis. While these approaches can be costly and time‑consuming, they may still be commercially viable where the upside is large enough.

Importantly, competitive advantage in deep tech does not arise solely from products. Many businesses also rely heavily on processes: manufacturing methods, calibration routines, materials processing steps, test methodologies, control algorithms, or system‑level integration techniques. These processes often deliver critical improvements in performance, yield, reliability, or cost, yet may not be directly observable from the final product.

Detectability and Enforceability in Practice

In some business models, disclosure is unavoidable. Semiconductor IP, for example, may be licensed in the form of RTL code such as Verilog or VHDL, making the underlying design visible to customers and their engineers. In these scenarios, trade secrets alone can be fragile. Patent protection may provide clearer and more enforceable rights, particularly where multiple organisations need access to the same core technology.

Detectability plays a central role in the patent versus trade secret decision. If a competitor cannot readily determine how a technology works, it may also be difficult for the rights holder to detect or prove infringement. Patents are often best suited to technologies that are likely to be discovered through product inspection, disclosed to third parties, or independently developed. They provide a defined scope of protection and a structured enforcement framework. When drafted with detectability in mind, patents can be aligned with externally observable behaviour or measurable system outputs, improving their practical enforceability even for complex technologies.

Using Trade Secrets to Protect Internal Know‑How

Trade secrets, by contrast, are often well suited to internally used processes and know‑how that never need to be disclosed outside the organisation. This includes manufacturing techniques, tuning parameters, workflow optimisations, and other operational knowledge. Effective trade secret protection depends on technical, contractual, and organisational controls, including restricted access, confidentiality obligations, and careful documentation. In the EU, this requires compliance with the Trade Secrets Directive (EU Directive 2016/94).

Employee mobility presents additional challenges. Process‑based know‑how is often harder to protect once key personnel move to competitors, particularly where similar results can be achieved through parallel development. In such cases, patents covering core technical concepts, even where specific implementation details remain confidential, can provide a valuable backstop.

Combining Patents and Trade Secrets for Stronger Protection

In practice, the strongest deep tech IP strategies deliberately combine patents and trade secrets. Patents can secure protection for externally visible innovations and strategically important technical ideas, while trade secrets safeguard sensitive processes and execution know‑how that deliver practical advantage. Determining the right balance is highly technology‑specific and closely tied to commercial objectives.

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Early advice from experienced patent attorneys is therefore critical. At EIP, we work with companies developing complex deep tech systems to build IP strategies that align legal protection with technical reality and business goals. Through our Ampliphy offering, clients gain access to patent attorneys specialising in electronics, semiconductors, and advanced processes, ensuring informed decisions at the intersection of innovation, IP, and commercial strategy. To explore how a combined patent and trade secret strategy could work for your technology, contact Andrew Thompson or Filip Jörgensen for a discussion.

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