Alternatives to patenting phages: trade secrecy

Issue 16 | February 8, 2019
8 min read

In past issues, we covered what it means to patent something & whether patenting works for phages. In this issue, we dive into an alternative to patenting: trade secrecy.

This week’s issue is part of a multi-part issue on patenting phage therapeutics (see part I here and part II here). Our main source for this deep-dive has been this paper by Kelly Todd, Duke University School of Law J.D. / M.A. student.

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Alternatives to patenting phages: trade secrecy

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Phage microbiologist and co-founder of Phage Directory
Phage Directory, Atlanta, GA, United States

Jessica Sacher is a co-founder of Phage Directory and has a Ph.D in Microbiology and Biotechnology from the University of Alberta.

For Phage Directory, she takes care of the science, writing, communications, and business aspects.

In past issues, we covered what it means to patent something and whether patenting works for phages (hint: it’s possible, but we probably need to explore alternatives).

In this issue, we’re continuing our dive into this subject and talking about alternatives to patenting. First up: trade secrecy. What is it, how would it apply to phages, and what are its pros and cons?

Recap: Why patent something?

As a reminder, patents serve to protect investments because they prevent competition (for a while). This gives the people who spend the money to manufacture something (e.g. a drug) and bring it to market (e.g. get it through clinical trials, make enough of it to get it on the shelves, and actually market and sell it) a fighting chance to actually recoup these enormous costs and make money.

When something isn’t protected under a patent, competitors (who didn’t pay for much of the above) can come in, manufacture the already-approved product, and sell it for a lot less (since they don’t have the same massive costs to recoup).

Bottom line: someone needs to make the investment into making and evaluating a brand new product, and patents are a way of incentivizing that investment.

Why do we need patent alternatives?

Phages are found in nature, so their patentability has been questioned (and even when phage patents have been granted, it’s uncertain they’ll hold up in court). Because of this uncertainty, we likely need to explore other ways of protecting investments into phage products. One viable alternative is trade secrecy.

What is a trade secret?

A trade secret is confidential information that gives a business a competitive edge (the most famous example is the process of making Coca Cola). Maintaining trade secrecy is a common way life sciences companies protect inventions that are not sufficiently protected by patents.

An example would be if a company developed a process of manufacturing their product and didn’t tell anyone how they did it. Since manufacturing processes can be quite sophisticated and difficult to replicate / reverse-engineer by someone on the outside, trade secrecy works well in situations like this.

Like patents, trade secrets are enforceable by law, as long as they:

  • Are not generally known to public,
  • Derive some economic benefit from being unknown, and
  • Are kept secret through reasonable efforts.

Key differences between trade secrets and patents

  • Trade secrets do NOT require disclosure to competitors (unlike patents), and
  • Trade secrets can be held indefinitely (unlike patents, which expire after ~20 years)

Bottom line: trade secrecy essentially grants an “indefinite pseudomonopoly”, and as such can help protect (and thus encourage) investments into product development, even when that product is difficult/impossible to patent.

Trade secrecy and phages

Phage companies are already relying on trade secrecy to protect their interests. For instance, the public phage biotech company Ampliphi Biosciences has described its use of trade secrecy.

Types of phage-related trade secrets:

  • Innovative methods of phage purification, preparation, amplification, and storage (likely protectable as trade secrets since difficult for outsider to replicate/guess)
  • Knowledge of the phages comprised within cocktails/libraries, knowledge of the bacterial strains each can lyse (may be protectable as trade secrets, though less certainty here, since many of these secrets would be “out” once these products were administered publicly)

Drawbacks of trade secrecy

Too much trade secrecy can hinder innovation. With less sharing of knowledge, the costs of innovation in a field are higher, and the speed of innovation is slower. This extends not only to others in the same industry, but also to non-competitors in other industries.

For example, phage-related knowhow in the healthcare industry could help those developing phage products for the food industry or for environmental sanitation. So while keeping this information secret may help one company, this act may hinder progress in entirely separate industries.

Bottom line: trade secrecy can be a good option for protecting and encouraging investment into phage-based products, but comes with important tradeoffs, and likely isn’t a perfect solution on its own.

Thanks for reading! Next time, we’ll discuss additional solutions that could supplement trade secrecy.
– Jessica <>={

Main source:

Kelly Todd, The Promising Viral Threat to Bacterial Resistance: The Uncertain Patentability of Phage Therapeutics and the Necessity of Alternative Incentives, 68 Duke Law Journal 767-805 (2019)
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