One of the first decisions that the owner of a prospective trade secret must address is whether to seek patent protection or trade-secret protection. The advantages of trade-secret protection include the following:

1. Trade secrets cover a vast array of subject matter
2. Matter that can be protected by trade secrets is not limited to patentable subject matter
3. There is no set term limit for trade secrets, so trade-secret protection can last as long as the trade-secret holder can keep the secret
4. Trade secrets are generally less expensive than patents to obtain
5. There are no registration procedures for trade secrets

Trade secrets also have the following disadvantages relative to patents: (1) trade-secret protection only lasts as long as the trade secret remains secret; and (2) trade secrets can be reverse engineered.

The fact that a trade secret can be reverse engineered is a significant disadvantage. There is no legal barrier to stop a competitor from purchasing a product that is covered by a trade secret and figuring out how to produce the product on its own. Consequently, trade-secret protection is usually impractical for protecting products. In addition, there is no legal limitation that prevents a competitor from independently discovering the trade secret.