Businesses using artificial intelligence (AI) are rethinking how they protect their most valuable innovations. Trade secrets could become the preferred method to guard AI technologies. Compared to patents and copyrights, trade secret law may offer broader coverage and faster protection. This shift presents opportunities — and risks — for companies creating proprietary AI models, data strategies, and internal systems.
Trade Secrets for AI IP Protection
Trade secrets do not require public disclosure. That makes them ideal for AI systems where competitive edge depends on confidentiality. AI models often contain parts that are not easily patentable but are highly valuable — like training data, prompt strategies, or system instructions.
Unlike patents or copyrights, trade secrets:
- Start protection instantly
- Don’t need a human author
- Can protect everything from code to training sets
- Remain valid as long as secrecy is maintained
At Thrive IP® we can help clients identify which AI components qualify for trade secret protection and/or what other IP tools can be implemented. The goal is to build a wall of protection around your innovation.
Pitfalls of Relying Only on Trade Secrets
While trade secrets for AI protection are powerful, they are not foolproof.
Risks include:
- Employees leaking data
- Reverse engineering by competitors
- Unintended output disclosures
- Use of third-party AI tools without proper agreements
Companies must take “reasonable steps” to show they actively protect these secrets. Those steps include access restrictions, internal policies, and legal agreements.
When Patents Still Matter in the AI Era
Some AI-assisted inventions still qualify for patent protection — but only if a human makes a significant contribution. The USPTO allows patents in these cases, but courts remain strict.
“Significant contribution” can be represented by documenting how a human:
- Chose training data
- Tuned model performance
- Created unique prompts or applications
This type of documentation can help prove qualification for a patent.
Still, if an AI system relies on abstract logic or standard machine learning methods, a patent might be denied. In that case, trade secret protection could be your best fallback.
At Thrive IP®, we can help clients protect all aspects of their AI IP by providing:
- IP audits to find protectable AI elements
- Trade secret strategies to secure key systems
- Patent filings with strong human contribution documentation
- Drafting of NDAs, license agreements, and employee use policies
- Defense and litigation support for trade secret theft
We build custom strategies to protect your innovation from the inside out.
FAQs: AI Trade Secrets and IP Protection
What qualifies as a trade secret in AI?
Any confidential component — from datasets to algorithms — with economic value and secrecy protections.
Can AI-generated inventions be patented?
Yes, if a human contributes significantly. Courts look for human creativity and decision-making.
Why are trade secrets sometimes better than patents for AI?
Patents require disclosure and face legal hurdles. Trade secrets offer faster, flexible protection without publication.
Why Hire a Patent Attorney for Your AI Strategy?
You can’t afford to guess when it comes to IP law — especially with AI. Thrive IP® provides the experience you need to stay protected.
Thrive IP® is here to help
Don’t leave a matter as important as your intellectual property to chance. Willing help in the form of an experienced legal team is here and is just a call away. We have patent attorneys located in North Charleston, SC, Greenville, SC and Knoxville, TN. Please contact us if you have an interest in our intellectual property services or if we can help answer your IP questions.