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Law for Business

Knowhow - guidance - precedents

11 DEC 2012

The Secret Ingredient

 

The "Lea and Perrins" recipe has been kept secret for over 160 years. Originally developed by chemists Mr Lea and Mr Perrins, they passed the knowledge onto their sons who in turn passed the recipe on to a select few.

David Thompson in the Michelmores Food and Drink Team looks at the advantages of keeping commercially sensitive information, including recipes and product specifications, secret.

Businesses wishing to keep a recipe or manufacturing process confidential will often only divulge the secret to a few trusted employees. This is certainly a pragmatic way of minimising the risk that confidential information reaches the public domain.

Confidentiality Agreements

Such businesses may also wish to consider completing specific confidentiality agreements (also known as non-disclosure agreements or "NDAs") with those employees, to further limit the likelihood that those individuals independently use the information to their commercial advantage.
When dealing with confidential information it should be recognised that:

  • it may often be difficult to trace the source of a leak, leaving no ready route of recourse for the business;
  • the secret could be lost if the employees were to leave the business;
  • there is nothing to stop competitors guessing (or more likely reverse engineering) the recipe and marketing it legally; and
  • any written confidentiality agreement relies, to a large degree, on its "threat value" (i.e. it acts to discourage disclosure). If an agreement needs to be enforced then it may well be impossible to then prevent wider dissemination of the relevant information.

Patents

One alternative may be to consider patent protection, applying through the UK Intellectual Property Office and, potentially, through other national registries (if you require protection overseas). It should be recognised that a patent may be very difficult to gain in the context of traditional "recipes".

However, a granted patent offers the holder a 20 year monopoly in relation to the subject matter. It can therefore be an extremely valuable asset. 

The main disadvantage associated with obtaining a patent, and the reason that many businesses have not yet taken the step, is that your secret information becomes public. In order to register a patent you must provide comprehensive details of the ingredients and process which create the resultant product.

It is always prudent to take advice if your business relies heavily on the exploitation of "trade secrets".

If you would like to have an initial discussion concerning your options then please contact david.thompson@michelmores.com or telephone 01392 688 688

Disclaimer: This information has been prepared by Michelmores LLP as a general guide only and does not constitute legal advice on any specific matter and should not be relied upon as such. We recommend that you seek professional advice before taking action. No liability can be accepted by us for any action taken or not taken as a result of this information.

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