A Very Secret Ingredient: Recipes and Trade Secret

Do you have a tried-and-true dish that is the result of your tweaking and testing? Are you in the business of selling edible goodies that are the product of a secret recipe and curious as to how you might protect that recipe? Welcome to the world of recipes and trade secret.

Recipes and Trade Secret

But First, What Does “Trade Secret” Mean?

Trade secret information consists of incredibly valuable (and secret) information. This information can be technical, nontechnical, or financial data, or a formula, pattern, compilation, program, device, method, technique, process, or plan. It should:

  • Be valuable based on the fact that it’s not being generally known to anyone else;
  • Be valuable based on the fact that it’s not really discoverable by others who can economically benefit from its disclosure or use; and
  • Be the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

The biggest advantage to trade secret protection is that the length of your protection is potentially infinite. (Well — infinite, so long as the information remains secret.) Compare that to copyright and patent protection. Copyright protection for works created by an individual under the current law generally lasts for the life of the author +70 years.  The term for patent protection is currently 20 years. If your information qualifies as trade secret information, the trade secret protection has its benefits.

Preserving Trade Secrets

You’ll notice, as you take a look at the elements of a trade secret listed above, that the information must be, essentially, secret, in order to constitute a trade secret. Thus, one of the most important things you can do as the owner of trade secret material is to preserve the secrecy of the information and protect it. Of course, especially once it’s time to make a recipe scalable for mass production, it can be difficult to keep information secret. Also, to the extent you seek investors, they might be hesitant to invest in a business that depends on the knowledge of a single individual. Luckily, there are trade secret protocols you can put in place. These protocols can help you preserve your trade secret while monetizing the results of that proprietary recipe.

Potential Trade Secret Protection Protocols

  1. Determine what your trade secret is. What’s your trade secret? Is it a recipe? An ingredient list? Taste-testing methods? All of the above? It’s hard to protect a trade secret if you don’t know what exactly you’re protecting.
  2. Designate and/or mark your documents. Got a document that contains trade secret information? Mark it: CONFIDENTIAL/TRADE SECRET INFORMATION.
  3. Only divulge the secret to those who absolutely need to know. And, have the proper agreements in place. Really, before you divulge any trade-secret information, you should require the recipient to sign a confidentiality agreement. Also, any employees with access to trade secret information should sign a similar agreement. Make employees aware of how to treat trade secret information.
  4. Limit access. Take care to restrict access to your trade secret information. If the information is written down or otherwise physically recorded (that is, in the form of a written recipe, a list of ingredients, etc.), restrict access. This can mean locking up and limiting access to the physical location in which those written items exist. It can also mean password-protecting any electronic or digital files that contain trade secret information. If the info is not written down or otherwise recorded, this means only giving trade secret information to those that need to know (see No. 3, above). Also, any recipients should be contractually prohibited from divulging the information.
  5. Invest in a cross-cut shredder. Make it impossible to recover destroyed information.

World-Famous: Recipes and Trade Secret

Companies like Coca-Cola and Kentucky Fried Chicken have made trade secret law work to their advantage. Once the formula for Coca-Cola was recorded on paper, the recipe moved from vault to vault in a number of different banks. It is now held at the World of Coca-Cola Exhibit in Atlanta, Georgia (though the substance of the recipe available to visitors is unclear).

KFC, too, has reportedly taken extraordinary measures to ensure that its combination of herbs and spices remains proprietary. Rumor has it that its blend is mixed in two different facilities — meaning, of course, that neither facility has the full recipe.

The Point: Recipes and trade secret collide when a business or creative venture depends on information that is considered proprietary. Take the utmost care to ensure that that information stays a secret.

What’s next? Click here to download your [free] Essential Legal Checklist from Spear IP.

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