Trade Secrets

You’ve developed the perfect product and you want to keep the formulation secret. Can you hide some of the ingredients? Well, yes and no.

Trade Secret

Any formula, pattern, device or compilation of information which is used in one’s business and which gives him an opportunity to obtain an advantage of competitors who do not know or use it.

The law and the FDA regulations have a provision for registering a trade secret, which — if approved — lets you omit the ingredients in the trade secret from the ingredient declaration. In that case you can just say “and other ingredients” at the end.

Sounds great, right?

Well, you can’t just say, “it’s secret” and change your ingredient declaration.  In order to omit your secret ingredient(s) from your ingredient declaration, you first have to get that approval from the FDA.

There’s a form, available online or from a local FDA office.  Fill in the form and send it in.

Approval? Probably Not.

There’s the rub.  It’s not just sending in the form  — it has to be approved by the FDA.

According to the FDA website, they have only approved one (ONE!) trade secret application in the last twenty (20!) years.

So even if you fill in the form and send it in, that approval is not likely to be winging its way to you any time soon.

How to keep your secrets anyway

Called “security by obsurity” in the internet security world, there are some things you can do that will at least camoflage or obsure your secret information. Try some or all of these little tricks:

  • If it’s a blend of essential oils used for scent, list it as “fragrance” in the ingredient list because fragrance blends don’t require the indivudal components to be listed. (See Blended Fragrances in the Ingredient Declaration for more details.)
  • If it’s a special color, or combination of colors, remember that colors (so long as they are approved color additives for cosmetics) can be listed in any order at the end of all other ingredients, regardless of the amount.
  • If it’s a small quantity ingredient, keep in mind that ingredients present at 1% or less may be listed in any order.  So you could scramble up the order to make it less able to be duplicated.
  • If it’s larger ingredients there’s not much you can do but list them in the correct order. But even so, it’s hard for someone to figure out the exact percentages, especially when there are a number of ingredients.

Consider Coke®

The Coca-Cola company has one of the most secret formulas ever. Even though they have production facilities all over the world, sell billions of dollars of coke every year, and have been in business for over a century, only a few people actually know (or have ever even seen) the formula. It’s kept in a vault in Atlanta.

Visiting the Vault at the Coke Museum, Atlanta, Georgia

The formula has never been patented, so it’s not even partially disclosed on a patent form. Coke never applied for a “trade secret” exemption for the ingredient, so the secret was never disclosed to the FDA.  On the ingredient declaration they say only”natural flavorings” (which, like fragrance, don’t have to be disclosed).

And in over 100 years, no one has yet been able to duplicate it.

Comments

  1. Haha I love it! Way to go Coke. How have they done it?! What about proprietary blends?

    1. Author

      they did it by having a CEO that was hard-core about keeping it a secret. The formula was locked away in bank vaults (safety deposit box, I expect). But remember, the coke formula that was kept secret was only the FLAVOR part. Flavor, like fragrance, doesn’t have to have the component ingredients listed; it can just be “flavor”. Coke still has to list all the other ingredients.

      “Proprietary blends” either have to have all the ingredients listed OR, if it’s a blend used for fragrance, can be listed as “fragrance”. That’s it.

    2. I was a marketing analyst for the Coca-Cola Company. The employees on the production line for the syrup are provided with ingredients that are packaged and labeled like “X” or “Y” or “Z” – – awesome.

      1. Author

        I didn’t know that! There ARE ways to keep your formula (for flavor or fragrance) secret!

  2. Who is the holder of the last trade secret approved? Enquiring minds want to know 🙂

    1. Author

      The FDA didn’t say — they just said only one had been approved.

  3. Please advise.. Labeling for my cosmetic line has me confused. For example.. aloe Vera gel has a preservative, micas have colorants and liquid & dry colorants have preservatives. I know my percentages used for the primary ingredients in my own recipes, but how do I list these “unknown” additives to my ingredient list to adhere to FDA labeling standards? Are you saying that the unknown additives should be considered in the 1% category & therefore I can just guess which order to put them at the end of my ingredients label?? Where can I find this info on the FDA website? I’ve missed it somehow.. thanks sooo much

    1. Author

      There are a couple of things that apply here ….

      Ingredients present at 1% or less may be listed in any order after ingredients present at more than 1%. It’s the “alternative” way to list and is covered in 21 CFR 701.3(f). The Labeling Regulations page on the FDA website only mentions “descending order of predominance” but it does reference the regulation (21 CFR 701.3). The Cosmetic Labeling Guide talks about the order of ingredients as well and discusses the alternative listing order.

      As for the blended ingredients …. there is an exception in the ingredient declaration for “incidental ingredients.” It’s covered in my book and in the Cosmetic Labeling Guide on the FDA site.

      When it’s a color additive (i.e. mica with added colors) the color components used to make the color are NOT incidental, so they need to be listed in the ingredient declaration.

      When it’s a preservative in a blended ingredient, it probably falls under the “incidental ingredient” definition #4: “A substance added to a cosmetic as a component of a cosmetic ingredient and having no technical or functional effect in the finished product. Example: Preservative of a raw material added to a cosmetic as an ingredient at a concentration which reduces the preservative to a level at which it is no longer effective.” I would expect that definition applies to the preservative in the aloe vera gel, and preservative in colora additives.

  4. Sounds like a wste of a lot of money and time on the FDA’s paart to even have this form.n

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