When to patent and when to keep AI innovations secret

Artificial intelligence is reshaping industries at breakneck speed, from healthcare diagnostics to creative content generation. But behind the hype lies a quieter, more complicated struggle: how do you actually protect the value of AI innovations? Companies face a fundamental choice: pursue patent protection or keep their innovations secret. Neither path is straightforward. In fact, in AI the decision is often harder than in traditional technologies because of how algorithms, data, and models work.

The team at PatentRenewal.com, a company specializing in automated, transparent and cost-effective IP maintenance, took this opportunity to explore the strategic considerations behind patenting and secrecy in AI.

 This blog post explains what makes AI different, examines real-world disputes, and offers a practical framework for innovators navigating this high-stakes question.

Patents vs. trade secrets

At their core, patents and trade secrets are two different methods of protecting intellectual property.

• Patents grant an exclusive right, usually for up to 20 years, in exchange for public disclosure of the invention. They are powerful tools for deterring competitors, licensing technology, and signaling innovation strength. But they require detailed publication of how the invention works which means surrendering secrecy forever.
• 営業秘密, by contrast, protect information that is kept confidential and derives economic value from that secrecy. There is no time limit, and protection can, in theory, last indefinitely. But secrecy is fragile: once information is disclosed or reverse-engineered, the protection evaporates. 

In most industries, the decision is guided by well-established norms. Pharmaceutical companies patent molecules, while Coca-Cola keeps its recipe secret. AI, however, blurs these lines.

Why AI is different

AI technologies do not fit neatly into traditional intellectual property categories. Several factors complicate protection:

1. Algorithms and abstract ideas
   Many AI inventions center on algorithms, which patent offices often treat as mathematical abstractions. Courts in both the U.S. and Europe have been skeptical of granting patents unless the AI method produces a clear technical effect. This raises barriers to patenting compared with fields like biotechnology or engineering. 
2. Training data
   Datasets are central to AI performance. But data is notoriously difficult to patent. Instead, companies rely on trade secrets or contractual protections. Once data is leaked or duplicated, enforcement is extremely difficult. 
3. Model weights and parameters
   Trained model weights, essentially the knowledge encoded in a neural network  are the crown jewels of many AI systems. Yet they are almost impossible to patent in a meaningful way, and highly vulnerable to theft if not safeguarded as trade secrets. 
4. Infringement detectability
   Even when an AI method could be patented, detecting and proving infringement is uniquely hard. Competitors can deploy similar models internally, hidden behind APIs. Without transparency, identifying copying or unauthorized use can be very challenging. 
5. Speed of innovation
   AI moves fast. By the time a patent is granted  years later  the specific technique may already be outdated. Trade secrets allow for quicker protection, but only if secrecy can be maintained. 

Real-world examples

Looking at actual disputes helps clarify why these issues matter.

1. USPTO refusals on AI inventorship

The U.S. Patent and Trademark Office has rejected applications listing AI systems as inventors, most famously in the DABUS case. While the ruling was about inventorship rather than secrecy, it illustrates how patent law struggles to accommodate AI’s realities. Innovators cannot assume every breakthrough in AI will be patentable.

2. Stability AI and copyright litigation

In 2023, Stability AI was sued by Getty Images for allegedly using copyrighted photographs without permission to train its generative models. Although the case centers on copyright rather than patents, it underscores the vulnerability of training data. Because data itself is difficult to patent, companies typically rely on secrecy  and leaks or misuse can trigger expensive litigation.

3. OpenAI and the transparency dilemma

OpenAI initially released models like GPT-2 with partial disclosures, citing concerns about misuse. By the time of GPT-4, the company disclosed almost nothing about model architecture, training data, or weights, treating them as trade secrets. This strategy reflects the growing recognition that for cutting-edge AI models, secrecy often provides more realistic protection than patents.

4. Waymo v. Uber (2017)

Waymo, Google’s self-driving car subsidiary, accused Uber of stealing trade secrets related to LiDAR technology. The case ended in a $245 million settlement. While not strictly about AI algorithms, it shows the stakes: trade secrets in emerging technologies can be immensely valuable, but their protection depends entirely on the ability to prove misappropriation.

A strategic framework for decision-making

Given the complexities, how should innovators decide whether to patent or keep their AI innovations secret? The decision hinges on several interlocking factors:

1. Reverse-engineering risk

• If a competitor could easily figure out your method by analyzing your product, secrecy is weak protection. Patents may be safer.
• If reverse-engineering is nearly impossible  as with model weights, secrecy becomes viable. 

2. Detectability of infringement

• Can you realistically prove when someone is using your patented invention?
• For backend AI models hidden behind APIs, enforcement is often impractical. Trade secrets may be more enforceable in practice.

3. Innovation speed

• If your field evolves slowly (like medical devices), patents can secure long-term advantage.
• If progress is rapid (like generative AI), patents may no longer cover commercial products by the time they are granted. Secrecy better matches fast iteration.

4. Disclosure risks

• A patent requires full disclosure. If that disclosure would hand competitors a roadmap, the cost may outweigh the benefit.
• Trade secrets avoid disclosure but demand rigorous internal safeguards (NDAs, access controls, monitoring, training, and so on).

5. Industry norms and regulation

• In regulated industries (e.g., medical AI), patents may be necessary to secure investor confidence and licensing opportunities.
• In unregulated fields, companies may prefer secrecy to maintain flexibility.

The hybrid approach

In practice, the most successful strategies combine patents and trade secrets. AI companies increasingly use a layered or complementary model of protection:

• Patents for system-level innovations: For example, unique methods of integrating AI into hardware, or technical improvements in efficiency that can be clearly documented. These patents serve as both defensive tools and signals of innovation strength to investors and partners.
• Trade secrets for implementation details: Training pipelines, data sources, model weights, and hyperparameter tuning are usually kept secret. These details are difficult to patent and often more valuable if hidden.
• Contracts and technical safeguards: Non-disclosure agreements, employee policies, encryption, and monitoring tools reinforce trade secret protection.

Companies balancing patents and trade secrets still face the practical challenge of tracking renewals, managing costs, and maintaining coverage across multiple jurisdictions. Without careful oversight, even well-protected patents can lapse and undermine the broader strategy. 

An IP renewal software can help you simplify this process by automating patent renewals and reducing manual admin, ensuring the protection you’ve secured remains in force.

結論

Artificial intelligence poses new challenges for intellectual property protection. Algorithms, datasets, and model weights do not fit neatly into existing categories, making the choice between patents and secrecy unusually complex.

Patents offer strong, enforceable rights  but only when the invention is clearly patentable, infringement is detectable, and disclosure does not undermine competitive advantage. Trade secrets, by contrast, provide flexible and potentially indefinite protection  but only if secrecy can be realistically maintained.

The smartest strategies do not frame this as an “either/or” choice. Instead, they layer patents and trade secrets in complementary ways, protecting what can be patented while safeguarding the rest through secrecy.