Last updated on February 14, 2011
In my law and economics seminar tonight, I discussed property, which is the second topic I cover under private law.
In the section on intellectual property, I briefly discuss trade secrecy as an alternative to patenting. The obvious advantage of trade secrecy is that unlike a patent, a trade secret can last much longer than 20 years. My slide on the topic says that:
“If a firm can keep a secret, there is no limit to how long it can appropriate the rents from its inventive activity (e.g., McDonald’s Big Mac sauce, Coke’s recipe, etc.) Moreover, trade secrecy law prevents the wrongful appropriation (e.g., breach of contract) of a trade secret. Independent discovery is allowed (e.g., Pepsi’s recipe, which is close to Coke’s), as are reverse engineering and taking advantage of accidental disclosure.”
As luck would have it, this week’s episode of This American Life reports on the (re)discovery of what may well be the original Coke recipe.