Using Trade Secret Protection for AI IP

2 minutes

Table of Contents

Andrew Rapacke
Andrew Rapacke is a registered patent attorney and serves as Managing Partner at The Rapacke Law Group, a full service intellectual property law firm.

Artificial intelligence innovations often consist of several elements that would be best protected by trade secret. A trade secret is any business information that provides an economic benefit or competitive advantage due to the information not being generally known by the public. Sometimes keeping information a secret is at odds with the requirements of obtaining other IP protections, meaning that a company must choose between one form of IP protection and another.

For instance, both patent protection and copyright protection generally require that the applicant seeking protection publicly disclose information related to the innovation. As such, securing patent protection and maintaining trade secret protection are mutually exclusive IP strategies. On the other hand, copyright protection can be sought in such a way that any trade secret information contained in the copyright can be redacted to maintain the secret status of the information.

What Aspects of AI Innovations Are Well Suited for Trade Secret Protection?

There are several types of information related to AI innovations that are well-suited for trade secret protection. Some aspects of AI that are protectable with trade secret include:

  • Technological know-how. How your AI innovation works is valuable business information. If your way of getting AI to work or to implement machine learning is better than how your competitors are doing it, your way gives you a competitive advantage. To prevent others from taking advantage of your know-how, you can protect the know-how behind your AI innovation by keeping your knowledge secret.
  • Algorithms. Algorithms are often a significant aspect of an AI innovation. However, algorithms are generally not eligible for other forms of intellectual property protection, such as patents and copyrights. The only viable alternative for protecting AI algorithms is with trade secret protection. By keeping your algorithm secret, others will not be able to use your AI algorithm unless they derive it through independent discovery or reverse engineering.

What Reasonable Efforts Should Be Take to Maintain Trade Secret Protection

Trade secret protection is great for small companies and startups on a tight budget because it costs nothing to create trade secret protection. All that is required is that the information that is to be protected is kept secret and that reasonable efforts are made to maintain the secret status of the information. A few examples of reasonable efforts to maintain trade secret protection include:

  • Keeping a clear record of what AI assets are trade secret information (and, of course, keeping the record secret).
  • Requiring employees to sign confidentiality agreements as part of their employment agreement.
  • Requiring third parties, vendors, suppliers, etc. to sign confidentiality agreements.
  • Imposing company policies that safeguard company trade secret and confidential information.
  • Training employees on how to keep trade secret information confidential.
  • Encrypting any AI software code.
  • Password protecting the AI software code.
  • Keeping the AI software or algorithm asset out of open source.
  • Keeping records of who has accessed the protected code (e.g., using a log-in, log-out system).
  • Limiting access to the protected AI trade secrets to only employees who need to have access to it or who are working on the AI code.
  • Limiting any printouts of the trade secret material.
  • Marking any printouts or other physical copies of the AI code with labels like “Confidential” or “Secret.”
  • Implementing physical and digital security measures as appropriate.

At The Rapacke Law Group, we make your IP needs a priority. We aim to help our clients with AI innovations to secure the appropriate IP protections that they need. Contact us today for a free initial consultation with one of our skilled IP lawyers.

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