Faced with higher patent fees and the prospect of having to defend their patents in court, small innovative firms are finding other ways to protect their new technologies, a study reports.

In-house proprietary technology and trade secrets are increasingly attractive to small businessmen, says Judith Obermayer, who headed a recent survey of over 150 small companies by Research & Planning Inc. of Cambridge, Mass. "Most small companies are using both trade secret policies and patents," says Obermayer.

In some industries, small companies are steering away completely from patenting innovations. "Good examples are the computer and electronics industries," says Obermayer, "which are moving too fast for patents to do any good."

Securing patents is useful in attracting outside investments, reported over half of the study's respondents. But patent attorney Joseph S. Iandiorio of Waltham, Mass., says even this incentive won't coax small firms into the patent office "if the system continues to be abused." The latest patent laws require companies to pay fees to maintain their patents, which could become a cost burden on small businesses, Iandiorio says. "Unless the costs of getting and maintaining patents are kept low enough to encourage investors," he comments, "innovators will be forced to turn away from patent protection."