John Hogg, CTO of Zeligsoft. (Darren Brown, OBJ)

Sometimes, the best way to protect yourself is to keep everyone else in the dark

To patent or not to patent, that is the big question on the minds of technology developers all throughout the world.

On one hand, patents offer legal protection from other companies discovering and reproducing technology. On the other hand, patents are expensive, time consuming and only last a certain number of years before the competition can jump into the market.

John Hogg, chief technical officer at Zeligsoft, said his company has looked at the pros and cons of patents versus trade secrets many times. The Gatineau-based provider of market-specific embedded software development tools said his company has learned to be proactive with patents rather than reactive. In the past, the company would develop the product and then decide if it was something worth going through the process of patenting.

"The most important thing we have learned is to put the horse in front of the cart. We see (intellectual property) as being the key to our competitive advantage," he said. "We say, 'Here's an area we know is going to be critical to us,' and then we look at areas to develop that we know are going to keep us ahead and simultaneously with that we patent it."

Curtis Behmann, a patent agent and associate at Borden Ladner Gervais LLP, said some companies just go ahead and patent everything – even if they aren't sure they are going to develop an idea – on the chance that it might be valuable to sell to another company in the future. "This can be valuable as a business tool for a company like IBM who is already out there, or if you're a startup looking for financing. Venture capitalists often look for a reason why they should trust you and if you have patent applications filed, then that's something that can give investors confidence," he said.

But he added that it can be a complicated decision, as there are benefits and drawbacks to both patenting and not patenting.

"In the software field, it depends on how much a company is planning to release to the public anyways and how easily something may be to reverse engineer. If you want to keep something secret, the protection is indefinite as long as you keep it a secret. (But) if someone independently comes up with the idea, you can't say they stole it from you."

Mr. Behmann gave Google.com as an example of a trade secret that has worked very well for years. "You put in your search terms and you get the results, but there is a lot of stuff that goes on in the background. In their case, the way they rank the search results, they have kept that secret because it's not something that people can easily get at, it's all on their own servers."

Mr. Hogg agreed that sometimes a patent isn't always the way to go.

"Sometimes we look at something and say 'this is going to be negative value for us to patent this.' We're better off not telling our competition what the questions are," he said.

"Sometimes the biggest part of the solution is understanding the problem. So if we describe the problem in the way that we solved it, that would give us negative value because competitors would then know the right question. It's also a time factor and a cost factor."

Application fees, filing fees, attorney fees, cost of formal drawings, and in the case of rejection, appeals and those associated costs, can all add up to a lot for a small business. The absolute minimum for most high tech patents is $10,000, according to Mr. Behmann. More complex high tech patents can cost up to 20 times that amount.

"Patents can be very expensive but they can also be very valuable. You can weigh the cost of having patents protection versus the cost of not having that protection. It's also a way of investing in the research and development you're performing," Mr. Behmann said.

"Also, if a competitor has a patent, they have the potential to exclude you from your market and that's a pretty big thing."

A sort of middle ground is provisional patent applications in the U.S., which gives the company a year of "breathing space." Provisional applications offer protection for a year without giving any information away. "It gives companies a year to review the technology, even to talk to potential investors or partners. It gives you a certain degree of flexibility without having the automatic publication that ends up happening with patent applications 18 months after they're filed," Mr. Behmann said.

Sometimes it is even easier to just give the information away for free. Mr. Hogg said that Zeligsoft has also donated technology to the industry, publishing it in an open forum, and invited competition to follow along.

"That increases our market, encourages our customers and competitors to go the way we think we should go, and allows us to concentrate on our core competencies to gain a competitive advantage," he said. "The goal is not to protect everything all the time."