Why are trade secrets becoming more important in the AI era?
The rapid rise of artificial intelligence is changing how companies create, use, and protect intellectual property. While patents remain a critical part of an IP strategy, they are not always the best way to secure innovation in AI. Increasingly, companies are turning to trade secret protection to safeguard the proprietary information and know-how that drive their competitive advantage.
In the AI for intellectual property landscape, trade secrets often cover:
- Proprietary algorithms and model architectures
- Training data sets and preprocessing methods
- Unique workflows for integrating AI into products
- Confidential business processes and deployment strategies
These assets can be extremely valuable, yet difficult or risky to patent. In many cases, patents do not work for AI innovations because the required public disclosure could enable competitors to replicate the technology quickly.
Why trade secrets fit AI innovation
Trade secrets can protect information indefinitely, as long as it remains secret. This is ideal for AI, where the competitive edge often comes from the details of implementation rather than the concept itself. Publicly disclosing those details in a patent could shorten your advantage to months instead of years.
With AI evolving rapidly, a trade secret program allows companies to:
- Secure confidential information without revealing it in the public domain
- Protect iterative improvements that happen too quickly for patent filings
- Preserve unique know-how and data advantages that cannot be reverse engineered
- Avoid creating a roadmap for competitors through patent disclosure
The risk landscape for AI trade secrets
The value of AI trade secrets makes them a prime target for theft, leaks, or misuse. Common risks include:
- Data leakage from insecure storage or unauthorized access
- Third party risk from vendors, contractors, or cloud providers
- Risk of employee turnover when engineers with critical knowledge move to competitors
NDA violations or failure to have enforceable non-compete agreements in place where legally permitted
High-profile disputes, such as the Waymo Uber trade secret case, highlight how damaging misappropriation can be. Without strong protection measures, the loss of proprietary information can erode a company’s market position and valuation overnight.
Building a defensible AI trade secret strategy
Protecting AI-related trade secrets requires both legal and operational safeguards, including:
Non-disclosure agreements (NDAs) with clear definitions of confidential information
- Non-compete agreements where enforceable
- Access controls that limit who can view or modify sensitive assets
- Trade secret audits to identify and document what qualifies as a trade secret
- Ongoing training for employees and contractors on how to protect company information
Incident response plans for suspected breaches
Modern IP management platforms with AI capabilities can help detect anomalies, track access, and maintain the documentation required for legal enforceability.
Trade secrets and the future of AI IP strategy
In the intellectual property US system, patents will continue to play a role in protecting AI inventions. However, many companies are finding that the most valuable elements of their AI solutions are better safeguarded as trade secrets. The key is knowing when to patent a product and when to keep it secret.
Balancing patent protection with strong trade secret governance reduces intellectual property risk and ensures protection of intellectual property rights without compromising competitive advantage.
How Tangibly can help
Tangibly was purpose built to help companies protect trade secrets in fast-moving fields like AI. Our IP management platform combines legal expertise with AI-driven tools to:
- Identify and document AI-related trade secrets
- Implement and maintain a complete trade secret compliance program
- Reduce the risk of NDA violations, data leakage, and employee turnover
- Support collaboration with your intellectual property law attorney or IP firm
- Strengthen your IP strategy for startups or established enterprises working in AI
If your AI innovation depends on know-how your competitors cannot see, we can help you keep it that way.
Book a demo today to see how Tangibly helps secure confidential information and protect innovation in the AI era.