Trade secrets…How do you protect recipes and product formulations? Best practices for maintaining confidentiality

Companies instead need to rely on other forms of IP, such as patents and/or trade secret protections.

So what is a trade secret?

A trade secret is a formula, manufacturing process, pattern, device or compilation of information that derives independent economic value from not being generally known or ascertainable, and which is the subject of reasonable efforts to maintain its secrecy.**

A trade secret is a kind of property right. The property right is lost when the information that constitutes the trade secret is disclosed to others, or others are allowed to use it.***

How do courts decide if info is – or remains – a trade secret?

In the US, several factors are used to evaluate whether information is or remains a trade secret.

Taking a holistic, or ‘totality of the circumstances’ approach, courts will consider:

(1) the extent to which the information is known outside of the business;

(2) the extent to which the information is known by employees and others involved in the business;

(3) the measures taken to guard the secrecy of the information;

(4) the value of the information to the business and to its competitors;

(5) the amount of effort or money expended in developing the information;

(6) the ease or difficulty with which the information could be properly acquired or duplicated by others.****

The food industry can experience particular challenges with these factors. This is because unlike high technology industries, everyone has some experience and knowledge of food and cooking; packaged food items must include a statement of ingredients in order of predominance by weight; there are typically many options for substantially similar food products on store shelves; and it is normal for multiple suppliers to participate in the process of bringing a final food product to the consumer.

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