Vault with Coca-Cola Trade Secret Formula on Public Display
|Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog, Inc.
Principal Lecturer, PLI Patent Bar Review Course Posted: January 6, 2012 @ 8:10 am
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Last month The Coca-Cola Company did something rather extraordinary. For the first time in history the vault containing the trade secret formula that makes up the Coca-Cola empire will be visible to the public in a permanent exhibit titled The Vault of the Secret Formula. The exhibit opened on December 8, 2011 at the World of Coca-Cola, which is a 60,000 square foot interactive Coca-Cola museum featuring more than 1,200 artifacts from around the world.
The secret Coca-Cola formula, perhaps the most famous of all trade secrets, has not been moved for 86 years, but the The Coca-Cola Company has moved the 125-year-old secret formula for Coca-Cola to a new home at the World of Coca-Cola in Atlanta. As the capstone to the 125th anniversary year of Coca-Cola, the Company decided to share the history of its secret formula in a new exhibit where visitors can experience one of the world’s most recognized brands like never before.
After Dr. John S. Pemberton invented Coca-Cola in 1886, the formula was kept a close secret, only shared with a small group and not written down. In 1891, Asa Candler became the sole proprietor of Coca-Cola after purchasing the rights to the business. Then, in 1919, Ernest Woodruff and a group of investors purchased the Company from Candler and his family. To finance the purchase Woodruff arranged a loan and as collateral he provided documentation of the formula by asking Candler’s son to commit the formula to paper. This was placed in a vault in the Guaranty Bank in New York until the loan was repaid in 1925. At that point, Woodruff reclaimed the secret formula and returned it to Atlanta and placed it in the Trust Company Bank, now SunTrust, where it remained until its recent move to the World of Coca-Cola.
In preparation for the new exhibit The Coca-Cola Company transferred the secret formula to the World of Coca-Cola from a vault at SunTrust Bank in downtown Atlanta where it had been housed since 1925.
“The move of the Coca-Cola secret formula is a historic moment for the Company,” said Phil Mooney, Director of Archives, The Coca-Cola Company. “The Company has always gone to great lengths to protect it and now by safeguarding it at the World of Coca-Cola, we can share its legendary legacy with people around the world.”
Can you imagine the security employed in transferring the trade secret from the SunTrust Bank vault to the vault at the World of Coca-Cola? The Coca-Cola formula has been notorious with rampant rumors, creating its own urban mythology with respect to both the formula and efforts to protect the secret formula. All you have to do is Google “coke formula urban myth” and you will find all kinds of claims. Thus, it seems almost a virtual certainty that a new mythology will now be created and grow.
It has always seemed to me that Coca-Cola is very comfortable with the urban myths, relishing them and even using them by some accounts to feed into the power of the trade secret, not to mention using them to misdirect the public into thinking, rightly or wrongly, that Fort Knox like security has always been employed to protect the formula. Thus, it is not a surprise to learn that visitors to The Vault of the Secret Formula exhibit will be treated to an immersive multimedia experience that celebrates the history, mythology and intrigue around the secret formula.
“This is a special day in Coca-Cola history, and the perfect culmination to our 125th anniversary celebrations this year,” said Muhtar Kent, Chairman and Chief Executive Officer, The Coca-Cola Company said on the day the exhibit opened. “By sharing this secret formula experience with our consumers, we celebrate both the rich history of the brand’s beginnings and the moments of refreshment and happiness to come for future generations. This is yet another way we are recognizing and thanking everyone around the world who has made the Coca-Cola brand what it is today.”
“Sharing this secret formula experience” with the public is a far cry from publicly displaying the formula. A trade secret is defined as any valuable business information that is not generally known and is subject to reasonable efforts to preserve confidentiality. The Coca-Cola secret formula easily qualifies as valuable business information, with the value being derived from the fact that it is secret. As with any trade secret, however, the Coca-Cola secret formula can only be a trade secret for so long as it is actually secret.
Courts have identified a number of factors relevant to determining whether business information satisfies the secrecy requirement. These factors include:
- The extent to which the information is known outside the business.
- The extent to which the information is known by employees and others involved in the business.
- The extent of the measures undertaken by an employer to protect the secrecy of the information.
- The value of the information to the employer
- The amount of effort or money expended by the employer in developing the information.
- The ease or difficulty with which the information could be properly acquired or duplicated by others.
These factors are used by Courts to determine if the secrecy requirement is satisfied. These factors and similar considerations are necessary because insofar as trade secret law is concerned the term “secret” does not have the same meaning as one would attribute to the same term in everyday conversation. This is true primarily because the information does not have to remain absolutely secret in order to be deserving of protection. The definition requires that the information not be generally known by the public.
With respect to the Coca-Cola secret formula the amount of effort and resources devoted to keeping the information secret is considerable. That is the only way that Coca-Cola could keep the formula a trade secret. Trade secret law looks to the efforts to maintain the secret in order to help establish whether the trade secret has ever or still does exist. This is something of a sliding scale reasonableness inquiry. The more valuable the secret the more efforts that need to be undertaken. The less valuable the secret the fewer efforts that need to be taken to maintain the trade secret.
With the Coca-Cola formula being worth many billions of dollars to the company extraordinary efforts need to be employed. I suppose a vault in a museum is a safe place, but this type of public display seems rather out of character for Coca-Cola if you ask me. Notwithstanding, guests to the World of Coca-Cola can feel closer than ever before to the secret formula, perhaps adding to the mystery and intrigue.- - - - - - - - - -
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Posted in: Gene Quinn, IP News, IPWatchdog.com Articles, Trade Secrets
About the Author
Gene Quinn is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.