Parsing the Pause that Refreshes

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This American Life, the popular public radio show hosted by Ira Glass, devoted its entire hour this past weekend to the cracking the Coca-Cola formula, perhaps the most famous trade secret in the world. Long rumored to contain cocaine, Ira Glass and company have posted the recipe online - or least, what they think the recipe is. Time described how TAL found their recipe in an 1879 photo from the Atlanta Journal-Constitution, showing the notes from a friend of John Pemberton, the inventor of Coca-Cola. The Christian Science Monitor reports, though, that the Coca-Cola denies that TAL has the real recipe, and that it remains a secret. The CSM article elaborates why Coca-Cola has few other options than repudiating any exposed recipe; in order to sue, the company would have to disclose the actual recipe in court, thus dissipating trade secret protection. Unlike patents, copyrights, and trademarks, trade secrets aren't covered by an overarching federal statute. Thus, among IP protections trade secrets are the weakest - as soon as Pandora's Box is opened and the secret is revealed, it can no longer be deemed a secret and the protection is lost. However, unlike other types of IP protections, trade secrets can last forever - there is no time limit. One might wonder: If something successfully remains a secret, why do we have worry about granting IP protection at all? The answer lies in employment contracts: specifically non-compete and non-disclosure agreements. While there generally are presumptions against unconscionable non-compete and non-disclosure clauses, the importance of trade secrecy protection may override an unconscionability defense. Thus Coca-Cola could, in an employment contract, inform its staff that they could never disclose the formula, and the draconian nature of such clauses would be justified on the basis of protecting the trade secret. By claiming that this isn't the formula, Coca-Cola inoculates itself against anyone challenging the continued existence of trade secrecy protection. Given the subjectivity of taste tests and the complexity of the formula (something no one disputes), it seems likely that the mystery of the most popular soft drink of the world will remain in dispute despite this latest "exposure."

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February 16th, 2011 at 3:11 pm

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