How do you protect your recipe? What does it even mean to “protect” a recipe?
As a food or beverage business, your recipe may be one of your most valuable business assets. So how do you prevent others from using your recipe to unfairly compete with you?
Two ways: intellectual property law and contracts.
Recipes can be protected intellectual property if they qualify as trade secrets. Recipes are generally not patentable because they are not novel enough. Also, a recipe is not a trademark (a brand) and it cannot protected by copyright.
A trade secret has two key elements. If you have both of these elements, you have a trade secret:
1. A trade secret has value because it is secret–because it is not generally known outside the business.
The idea here is you have invested money, time, and effort to create a recipe. A competitor would gain an unfair advantage if it could skip all of that and copy your delicious product by using your recipe.
2. You take steps to keep the recipe secret. What kind of steps? Legally, they must be “reasonable under the circumstances.”
Does this mean you have only paper copies of the recipe that are locked in a vault? Obviously, that’s not practical.
But you should take steps to secure your recipe and limit the people who have access to it. Importantly, anyone who has access to the recipe should be bound by a confidentiality agreement.
How do you know if your recipes are protected as trade secrets? Ultimately, it is a complex issue that a judge or jury will decide if you ever sue someone for stealing the recipes (“misappropriation of trade secrets” in legal speak).
To ensure you will have the strongest case possible if you ever need to sue, get advice from a lawyer about whether your recipes likely will (or will not) qualify as trade secrets and what you can do to better protect them.
But this isn’t enough. No lawyer can guarantee that you will win a hypothetical theft of trade secrets case. And you don’t really want to sue people if you can avoid it.
You need both a belt (trade secret protection) and suspenders (contracts).
Even if your recipes turn out not to qualify as trade secrets, you can protect them with confidentiality agreements and, sometimes, non-competition agreements. Contracts that clearly prohibit another party from using your recipes or selling competitive products are good deterrents. And, if you do need to sue, breach of contract may be easier to prove than misappropriation of trade secrets.