Trade Secrets: What Companies Don't Want You to Know: Slide Show
Feb. 16, 2011
-- Coca-Cola's secret recipe may have seen daylight, but other companies and organizations would like to keep their business in the dark. A trade secret isn't something that companies intentionally hide from the public, but rather is "information that companies keep secret to give them an advantage over their competitors," according to the U.S. Patent and Trademark Office. Take a look at some of the biggest -- and most valuable -- secrets that businesses want to keep to themselves.
KFC's mix of 11 herbs and spices to create "finger-lickin' good" chicken is a trade secret handed down from Colonel Harland Sanders himself. (However, the Colonel himself claimed that some changes were made to his recipe after he sold the franchise.) The handwritten recipe is kept in a computerized vault at KFC headquarters in Louisville, Ky. Only two executives actually know the secret recipe, and one more knows the combination to the safe, just in case.
As the joke goes: What's in McDonald's secret sauce? You don't want to know. McDonald's secret sauce used in Big Macs has led to all kinds of wild theories as to what ingredients it might contain. In 2004, the restaurant chain admitted to losing its original recipe for the secret sauce after the formula was modified as part of a cost-cutting measure. They were able to retrieve the recipe, however, after contacting a supply firm that once made the original sauce and had still hung onto the formula.
Speaking of food, it's not just the recipes themselves that are closely guarded. Even their base ingredients can be kept secret. Genetically modified crops such as corn, wheat, alfalfa and more are big business. Companies like Monsanto drive this billion-dollar business by investing an extraordinary amount of money and time into the research and development of new strains of crops. Monsanto will often go to great lengths to protect its trade secrets, often suing farmers whose fields are found to be growing crops from the company's seed to have those crops destroyed -- a controversial practice that has its share of critics.
Google is one of the leading technology companies in the world, and the reason it got there has long remained a secret. The search algorithm that Google uses every time you enter a query is the key to its success. Unlike KFC's secret recipe or Coca-Cola's formula, the algorithm is frequently modified and updated to keep up with technology trends. Google's algorithm is such a key part of its business that other competitors may be taking their cues from the search giant. Earlier this year, Google accused Bing of copying their search results and had the screenshots to prove it. Bing countered by saying that it wasn't copying data, so much as it was watching user behavior across search engines to improve its own search experience.
Have you seen the new fifth-generation iPhone? Chances are, unless you are an Apple employee, you haven't. In fact, even its very existence is just a rumor at this point. Apple is a company now well known for doing all it can to protect information about upcoming releases from prying eyes. Although the next generation iPhone, iPad or iPod may be a closely guarded secret, that wouldn't stop the inevitable tidal wave of rumors and speculation from washing over the company's product line.
With all the different threats on the Internet, computer security firms like Symantec, McAfee, Kaspersky Lab and others want you to know that you'll be safe with their software. They just won't tell you how they do it. These companies don't make their coding public not only to prevent competitors from taking their ideas, but also to keep cyber-criminals guessing.
The financial industry is about as big as business gets. A big part of that business is high-speed trading software that runs an algorithm to make lightning fast decisions, taking into account risk, timing, price and other market conditions. Tiny changes in the market can yield big profits for anyone quick enough and savvy enough to look for them. This practice is known as high-frequency trading, or algorithmic trading. Naturally, financial trading firms want to keep this technology a secret. Late last year, a programmer was sentenced to 15 years in prison for trying to make off a with a portion of Goldman Sachs' code. Considering how much KFC guards their secret recipe, it's no wonder that financial trading firms go to great lengths to keep their multi-billion-dollar secret a mystery.
Want to know what happens when you cast your vote electronically? Too bad. That's a trade secret. As is the case with other trade secrets, the companies are trying to protect their software code from the view of other competitors, not the voters. Prior to the mid-term elections last year, Election Systems & Software sued a former employee, who they claimed was selling software based on their code. Following a disputed election in Florida's 13th congressional district in 2006, the very same firm claimed their software code as a trade secret even as one candidate claimed that a malfunctioning machine had skewed the results.
Military technology is perhaps the mother of all trade secrets. Not only are different manufacturers competing against one another to create stealth fighters, armored vehicles, cutting-edge weapons and more; countries also compete amongst themselves to gain a military advantage. Consider the impact of the release of photos of China's first stealth fighter (pictured here). Or the People Republic's anti-ship ballistic missile, the so-called "carrier killer" that could take down the crown jewel of the U.S. Navy, the aircraft carrier. All organizations tend to think their trade secrets are life or death. In the military's case, however, they might just be right.