Through a Trade Secret, companies and individual entrepreneurs can keep the products and processes they invented from being copied by others. Simply not publishing the composition of such items seems to be the best way to prevent such illegitimate copying, but this does not always appear to be an option. What to do for example with the holder of a secret recipe, who is obliged by law to provide a list of ingredients of the foods and drinks he plans to sell?
Though Trade Secret offers a relatively weak legal protection as compared to Patents, they often are the best choice for creators of new recipes or formulas for consumable items. Article 1 of Law 13/2016 about Patents clearly states that only ‘technological solutions for problems’ can lead to patentable inventions. This makes pharmaceuticals often suitable for Patent rights, as they offer such a technological solution for a problem is a health issue. Foods and drinks, however, do not have the solving of such a problem as their main goal and do therefore not qualify for Patent rights.
A second option that comes to the mind of many when thinking about claiming the exclusive rights over a recipe is to declare their Copyright over the recipe in question. This however barely offers any protection, as the Copyright applies to the written recipe itself. Basically, anyone can publish and use the exact same recipe, as long as he rewords the text a little in order to make it not a literal copy of the original author’s text.
Besides reasons against any other form of Intellectual Property protection, there are also reasonable arguments in favor of establishing a Trade Secret over a recipe for foods or drinks. First of all, in order to declare such a Trade Secret, one does not have to make any trademark registration costs.
All the holder of such a Secret really has to do, is to keep the item in question a secret and take proper measurements to do so. Secondly, because they are not registered in any (government-linked) database, Trade Secrets are not bound to any expiry date. This is unlike for example a Patent, which is valid for twenty years as from the date of filing the application.
Trade Secrets for food and drink recipes, however, seem to contradict with consumer protection laws, which state that the contents of such products must be mentioned in its packaging. This is stated in the list of criteria traded foods must meet, and which can be found in Article 97 of Law 18/2012 about Food and Article 8 of Law 8/1999 about Consumer Protection.
Though certain exceptions to this rule apply – for example when the food does not come in packaging, such as whole fish or pieces of fruit – these examples often do not apply to products being suitable for protection through Trade Secrets.
The true question remains how companies can meet the legal requirements to publish a list of their product’s ingredients, and at the same time maintain a Trade Secret. Although the law does indeed oblige any seller of foods, drinks and other consumable goods to disclose a list of the product’s composition, it does not mention how detailed such a list must be. This means that in practice producers only list down the group of ingredients rather than the specific ingredient itself. Furthermore, the exact amount of each ingredient and the way ingredients are processed are crucial for the taste of the final product – and all of these factors do not have to be specified.
Who wants a good example of how this works in practice only needs to have a look at the backside of a bottle of Coca Cola, on which in many countries the ingredients are listed down in rather vague terms such as ‘natural flavors’ and ‘caramel color’. The use of such vague terms may seem a bit risky at first sight. ‘Natural flavors’ could indicate peanut flavors as well, while anyone with an allergy for peanuts might not realize this. Not seeing the word ‘peanuts’ or ‘nuts’ in the list of contents, this person might eat or drink the product in question, resulting in serious medical consequences.
How does the law prevent such situations? Article 68 of the Food Law and Article 8 of the Consumer Protection Law requires producers and business actors to operate in line with government regulations regarding food safety. Article 62 of the Consumer Protection Law imposes maximum penalties of five years of imprisonment or fines of billions of rupiah on those who violate these protective provisions.