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How Do I Protect a Secret Family Recipe in Minnesota?

And who profits off it?

Your grandma’s secret recipe has been passed down for generations, and now it’s your turn. But who actually owns the recipe? If you and your friends begin a business involving it, does your relative get a cut of the profits?

The law involved here—trade secret protection—says that recipes and other food-related products don’t have the same protections that, say, a patent on a light switch or trademarked business name would. The actual product, and the way it’s made, basically becomes public as you begin to sell it.

Most recipes can be reverse engineered—the process of taking a product and taking it apart to figure out how it’s made—by a savvy commercial chef. And so, some companies have gone to great lengths to keep their recipes secret. The most famous one, perhaps, is Coca-Cola. Only a few highly vetted employees have access to the syrup recipe, and they have signed extensive nondisclosure agreements.

In order to keep the protections afforded to owners of a trade secret, the owners must similarly enact plans to keep the recipe a secret. The law allows the owner of a trade secret to stop others from using that secret recipe through injunctive relief, damages and attorney fees. But, to seek relief, a business must hold that recipe in the highest of confidence. So, if you are going to use Grandma’s special recipe, be certain to keep the best part, or parts, of the recipe as protected as possible.

You will want to have a documented process in place for who gets to know the secret—and in what capacity—and how that secret will be transmitted to each person that has access to it. A business will need to limit access to the secret as well, potentially either by diversifying your production line so that no one knows the entire recipe, or by keeping it encrypted on multiple servers with extensive electronic protections. The courts will determine “if the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”

Another legal protection that can show these reasonable efforts are nondisclosure agreements or NDAs. It is best to consider NDAs before you think you will need them. Once the secret is out, an NDA can’t do much to stop the dissemination of information; a business owner must put these into place before sharing grandma’s secret recipe with anyone.

Determining who gets paid for what in the beginning of any business venture is also important. Most businesses fail in Minnesota because of money, and many of these arguments can be solved with proper legal planning. If grandma should be compensated for her original recipe, you can plan for that by giving her a part of the business ownership—or even a part of any profits made.

Whatever direction you decide to take your business in Minnesota, do both yourself and grandma a favor by consulting with a reputable and experienced intellectual property attorney to protect your secrets, and a reputable and experienced business attorney to build a business that will last.  

For more information on this area of law, see our intellectual property overview.

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