Trade secrets and innovation

Overview
Trade secrets play a role in U.S. innovation policy. Trade secrets may establish incentives to innovate because they provide a mechanism for firms to capture the benefits of their inventions. Yet trade secrets also have proven controversial because they suppress, rather than disclose, particular innovations to the public. They also may have a significant impact upon the mobility of highly trained employees between firms. Further, because innovators often face a mutually exclusive choice between patenting their inventions or maintaining them as trade secrets, alterations to one of these regimes may alter the perceived attractiveness of the other.