This thesis explores two key methods of protecting innovations: trade secrets and patents, analyzing their advantages, disadvantages, and impact on company operations. In today's fastpaced and competitive business environment, the ability to protect innovations plays a crucial role in maintaining a competitive advantage and achieving long-term success. Trade secrets include confidential information with economic value, such as formulations, production processes, marketing strategies, and business plans. Their value lies in the fact that they are known only to a limited number of people within the company and measures have been taken to preserve their secrecy. On the other hand, patents provide time-limited legal protection for innovations, allowing owners exclusive rights to use and commercialize the invention during the patent's duration. Patents require the public disclosure of technical details of the innovation, which may enable competitors to develop alternative solutions after the patent expires. This thesis thoroughly analyzes the legal aspects, costs, and risks associated with using trade secrets and patents, and provides guidelines for companies on how to optimally protect their innovations by combining these methods. The research results indicate that both methods have their specific advantages and disadvantages. Patents are suitable for innovations that are easily reversible or copied, and for those with a clearly defined life cycle. On the other hand, trade secrets are useful for information that can retain its value indefinitely, and for innovations for which the costs of patent application and maintenance are too high. Through case studies analysis and entrepreneur surveys, the thesis provides insight into the actual effectiveness of these protection methods. It also highlights the importance of a strategic approach to innovation protection, recommending a combination of trade secrets and patents to achieve optimal protection and maximize the value of innovations. In conclusion, this thesis emphasizes that innovation protection is crucial for the long-term success of companies. The proper combination of trade secrets and patents can provide strong protection and ensure a lasting competitive advantage. Companies must carefully analyze the specifics of their innovations and strategic goals to choose the best protection method, thereby securing their position in the market and fostering further growth and development.