Yesterday marked the 30th anniversary of Coca-Cola's public admission that "New" Coke was a commercial failure. As the linked article reminds, in April 1985, Coca-Cola, Inc. announced that it would abandon the original Coca-Cola formula and switch to a "new" formula that resulted in a slightly sweeter taste similar to Pepsi. Yet, a mere 79 days after its launch, Coca-Cola announced on July 11, 1985 that it would resurrect the original formula in the re-branded "Coca-Cola Classic" (or "Coke Classic") while maintaining the "New" Coke product as well. Whether this was a massive failure in understanding one's product and it's market, or a cleverly designed scheme to shelve the original formula for a short-time to drive up publicity and demand for that product, the return of the original formula ("Classic") to shelves resulted in improved sales and better competitive footing with Pepsi (which would later endure a similar "misstep" with Crystal Pepsi in 1992 - coincidentally, also set for a revival soon).
While the public tends to have a basic understanding of trade secret protection, many know that the original Coca-Cola formula is perhaps the most famous trade secret in business history. It is one of the great examples of the value of a trade secret. It also represents the leading alternative to the patent process.
With any new/improved technology, process, or technique, the innovator(s) is faced with the dilemma of whether to patent the improvement or protect the innovation by trade secret. While there are instances where both forms of protection may be utilized to protect different aspects of the overall improvement, each separate aspect of the new/improved innovation must be held in secrecy (trade secret) or disclosed (patent). The two (different) forms of protection compel the different approaches, since these forms of protection are the opposite sides of the same innovation coin, in several legal and practical ways.
Trade secret laws are based in common law, and have since been codified at the state level and/or through interstate compacts (e.g., UTSA, the Uniform Trade Secret Act). Despite adoption in all states and in uniform acts, most versions are virtually identical in form. Something of value must be held in secrecy and protected using reasonable means to guard against public accessibility.
Notably, one does not "apply" for a trade secret or await "approval" from a governmental agency. Thus, there is no governmental cost to obtaining a trade secret; the only costs are business and legal. One simply holds the technology, process, technique, information, or data in secret (well, more simply stated than simply accomplished). If the tech/info is pilfered by another, then "misappropriation" of a trade secret has occurred and is actionable. And unlike patent law, trade secret law has both a civil penalty and a criminal penalty aspect (exemplified by the unlikely team of Coca-Cola and Pepsico assisting the FBI in prosecuting three individuals for the theft and attempted sale of Coca-Cola info to Pepsico).
Conversely, patent laws are based in the U.S. Constitution (as are copyright laws). To obtain a patent, one must file an application with the U.S. Patent and Trademark Office (USPTO or PTO). The application must include at least one written claim defining the scope (the metes and bounds like the written description of a property deed), as well as an inventor's declaration, and the appropriate filing fees.
The application will often endure a 2-4 year road through examination, hopefully with issuance of at least one claim and a patent resulting thereafter. In exchange for the limited monopoly of the granted patent, measured as a 20-year term from the filing date, the inventor/applicant must disclose all information necessary to practice the invention.
Thus, the flip-sides of the coin: secrecy and potential protection into perpetuity (trade secret), or public disclosure and limited monopoly (patent). Sometimes the dilemma is easy to resolve; other times, it is the decision that determines the livelihood of the business going forward. If you have such a dilemma, do not hesitate to contact York Law LLC to determine which path is the best for your business.