The Coca-Cola Trade Secret

July 4, 2011
Intellectual Property Information, Intellectual Property News

Coca-Cola is a carbonated soft drink mostly known as Coke™. Coca-Cola‘s natural flavorings formula is a trade secret and thus not patented. The original copy of the Coca-Cola formula is held in SunTrust Bank’s main vault in Atlanta.

A popular myth states that only two executives have access to the formula, each having only half the formula but the truth is that while Coca-Cola does have a rule restricting access to only two executives, each knows the entire formula.

Today, products of The Coca-Cola Company are consumed at the rate of more than one billion drinks per day.

The difference between a patent and trade secret is that a trade secret is protected only when the secret is not disclosed.

To register a patent you need to supply full information about the method or product to the patent office and upon publication will be made available to the public.

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Trade Secret Value to Business

April 12, 2011
Intellectual Property Information

A trade secret is any information that gives a business or for instance, manufacturer a competitive edge. Industrial type trade secrets are that found in manufacturing while one also gets commercial type trade secrets found in normal business.

The information is confidential and unauthorized usage of such then constitutes a violation for which the offended party can take legal action against the perpetrator. Trade secrets form a type of intellectual property as the information has value. The trade secret or secrets can include from distribution methods to supplier lists, client lists and means of production. Forms of violation with regards to a trade secret are that of industrial espionage and an employee selling information to competitors.

There is no formal process for registering a trade secret. This also means that the trade-secret can have an unlimited lifespan. To be a trade secret the information must not be generally known, must have exceptional commercial value for the holder and the holder must have taken reasonable measures to keep the information secret by means of non-disclosure and confidentiality agreements.

Steps that can be taken to protect the trade secrets of a company include that of confidentiality clauses in dealings with suppliers and for employee contracts. If the specific secret is patentable one can also obtain patent rights to ensure adequate protection.

Benefits of trade secrets include that of being immediate, not requiring registration or any formal procedures to be effective and the secrets have unlimited lifespan periods. There are additional requirements such as compliance with regulations stipulating disclosure of information to the government.

Companies need to understand the scope and importance of trade secrets as this will also influence the selling prices of the companies.

Contact us at Smit & Van Wyk for professional legal advice and assistance regarding trade secrets.

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Trade secrets and public domain

August 24, 2009
Trade Secrets

If guarded properly, trade secrets are forever. A business may keep the formula to Coca-Cola a secret. However, once it is disclosed to the public, the former secret enters public domain, although an invention using the former secret may still be patentable if it is not barred by statute. Some businesses choose to protect products, processes, and information by guarding them as trade secrets, rather than patenting them. Hershey Foods, Inc., for example, does not patent some of its processes, such as the recipe for Reese’s, but rather maintains them as trade secrets, to prevent competitors from easily duplicating or learning from their invention disclosures, or from using the information after the patent lapses. One risk, however, is that anyone may reverse engineer a product and thus discover (and copy and publish) all of its secrets, to the extent they are not covered by other laws (e.g. contract).

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Trade secrets and Patents

July 24, 2009
Patents, Trade Secrets

To acquire a patent, full information about the method or product has to be supplied to the patent office, and upon publication or issuance, will then be available to all. After expiration of the patent, competitors can copy the method or product legally. The temporary monopoly on the subject matter of the patent is regarded as a quid pro quo for thus disclosing the information to the public. One popular misconception held by many is that trade secret protection is incompatible with patent protection. It is typically said that if you apply for a patent you can no longer maintain a trade secret on the invention, but this is an oversimplification. It is true that in order to obtain a patent you must disclose your invention so that others will be able to both make and use the invention, and, to obtain a patent in the United States, if you have any preferences you must likewise disclose your preferences.

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Discovering a Trade Secret

June 24, 2009
Trade Secrets

Companies often try to discover one another’s trade secrets through lawful methods of reverse engineering on one hand, and potentially unlawful methods including industrial espionage on the other.

Acts of industrial espionage are generally illegal in their own right under the relevant governing laws. The importance of that illegality to trade secret law is as follows: if a trade secret is acquired by improper means (a somewhat wider concept than “illegal means” but inclusive of such means), the secret is generally deemed to have been misappropriated.

Thus if a trade secret has been acquired via industrial espionage, its acquirer will probably be subject to legal liability for acquiring it improperly.

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