Trade Secrets

When it comes to declaring every ingredient in the ingredient declaration for a cosmetic product, there is a little,tiny loophole for trade secrets.¹ IF (and that is a very big if) the FDA has approved the ingredient as a trade secret, then it may be omitted from the ingredient declaration and "and other ingredients" added to the end of the ingredient statement.

What is a trade secret?

A trade secret is information that gives a business a competitive edge. A trade secret can be very broad and often covers information that can't be copyrighted,orthat doesn't qualify as a patent or trademark.

Lots of different types of information could be considered trade secrets, including:

• Software programs or algorithms;
• Recipes,formulationsor ingredients;
• Product designs;
• Manufacturing techniques;
• Marketing strategies, pricing schedules, or customer/contact lists.

However, in order to qualify as a trade secret, the following conditions must all be met:

• It is not known to the competitors,and
• It has commercial value or gives a marketplace advantage,and
• The owner takes steps to keep the information secure.

If any one of these three points doesn't exist, then the information is not considered a trade secret and is not protected as such.

Examples of well-knowntrade secrets include the formula for Coca-Cola® (one of the world's greatest trade secrets),Google's search algorithms, the recipe for McDonald's secret sauce, and how the New York Times Bestseller List is determined.

Food and Drug Administration

Within the FDA, a trade secret could be any commercially valuable formula (which could include an ingredient) and must be the end product of either innovation or substantial effort. The trade secret and the productive process must have a direct relationship.²

For cosmetics, the most likely place a trade secret to occur is where an ingredient has been created that is so special and so secret that the company doesn't want to disclose what it isin the ingredient declaration. However, just because you want to keep it private doesn't mean you can ignore the regulations for disclosing all the ingredients.

The FDA must approve an ingredientas a trade secret before it may be left off the ingredient declaration. Details on how to apply for a trade secret exemption are listed on the FDA website. However, the FDA has said that in the last 20 years they have onlyapproved one trade secret request.³