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 Trade Secret 

Trade secrets relate to the production of goods (information concerning machines) and to the non-technical aspects of business (price codes, customer lists, economic studies, cost reports, bookkeeping methods, etc.).

The most famous example of a trade secret is the formula for Coca-Cola. It qualifies as a trade secret that does not have to be patented because it cannot be "reverse engineered" to figure out the ingredients and the exact ratio of the ingredients.

Many businesses prefer to protect their business ideas by keeping them as trade secrets. Trade secrets are generally protected through employee agreements and confidentiality obligations. A company that develops such things as a process or a formula, or customer list etc. keeps it from being used by competitors by obtaining agreements from employees and vendors not to disclose such information to persons other than those having an actual “need to know” within the company. Trade secrets do not require filing any applications with the state or federal government . Because no filing is required, the trade secret is potentially perpetual and does not expire; thus, a trade secret may last forever ( the formula for Coca-Cola has been kept secret for over 100 years ).

The disadvantage of the law of trade secrets is that it does not prohibit someone from “reverse engineering” a product, provided they did not obtain information about the product from someone contractually obligated not to disclose the secret. For example, the law of trade secret would not prohibit a competitor from discovering the Kentucky Fried Chicken recipe through trial and error (though, no one yet has). Our Firm will advise you as to whether protecting your business information/concepts etc. by relying on trade secret law is the best course of action or whether a patent application should be filed. If a patent is filed, the information is eventually disclosed to the public, but protected by the patent for 20 years from the filing date.

Please let us know if you have any formulas, processes, concepts, ideas, recipes etc. which you believe may fall into the area of trade secret protection. We can then discuss a plan to best protect it from competitors.


 Ezra Sutton, Esq., Plaza 9, 900 Route 9, Suite 201, Woodbridge, NJ 07095 
Copyright © 2004 Ezra Sutton, Esq. All rights reserved.