Non Disclosure Agreements and Trade Secrets


Trade secrets & NDAs


Trade secrets are simply confidential commercial information.

One of the most successful trade secrets, was the formula for Coca-Cola, which was a closely guarded secret for decades.

These days, the chemical compound can easily be discovered by use of modern technology. However, merely reproducing the taste of Coca-Cola will not necessarily lead to commercial success. The Coca-Cola trade mark is so famous and so well-loved by billions of people around the world that many will not drink anything other than the “real” thing.

Coca-Cola could have elected to protect their formula by way of patent, but then they would only have had a maximum of 20 years patent protection before the formula would have become publicly known. The original formula was developed in the 1880’s and although there were some changes throughout the years (such as removal of cocaine from the formula), the formula produced a much-loved taste.

In the mid-1980s Coca-Cola changed its formula to what it called “new Coke”, but there was a public backlash and the formula was changed to be more like the traditional version. Coca-Cola has built a myth and marketing campaign around the idea that only two Coca-Cola executives have access to the “secret” formula, and each can only access half of the formula.

Keeping the trade secret of the Coca-Cola formula has been an incredible success for the Coca-Cola company.

However, in this day and age with modern technology and communication means, it is more difficult than ever to keep trade secrets. One disgruntled employee posting a trade secret on social media, could lead to the collapse of a trade secret.

Once a trade secret is in the public arena, it is no longer considered to be “secret”, and there is nothing preventing competitors from using the previously secret or confidential information.

The major advantage that trade secrets have over patent protection, is that if handled correctly, the information can be kept out of the hands of competitors for many decades (while patent documents become available to anyone to use to their commercial advantage after a maximum of 20 years).