We’ve noted before on this blog that food receives limited protection from copying. But that doesn’t mean it receives no protection. As we all know, Coca-Cola’s secret formula is still secret. And sometimes food companies patent novel (and not so novel) dishes and techniques.
Patent and “trade secret” (the legal right Coke relies on) present very different economic benefits, however. Trade secret is forever—if the secret can be kept secret. Patent, by contrast, lasts 20 years and protects the invention against any copyist. More importantly, patent is fundamentally based on disclosure: to patent something, you have to explain how it works.
How do firms choose between the two? That’s a big question. But we can get a window on it by looking at something that has been in the news lately—the so-called “Vegas Strip Steak.”
According to Oklahoma State University, which is claiming the patent, the Vegas Strip Steak is very similar to the New York strip. The OSU folks are keeping quiet about the precise location of the Vegas Strip Steak – at least until their patent is granted. Which, if the United States Patent and Trademark Office does its job, probably won’t ever happen.
Why? There’s no way OSU could patent the steak itself. The steak is just a piece of a cow. It is, in other words, a product of nature, which cannot be patented.
Wisely, OSU’s patent apparently isn’t on the steak itself, but on the knife cuts necessary to extract the steak. But that approach is dubious as well. Once you know where the steak is, the cuts necessary to get at it may be obvious to a skilled butcher. Things that are obvious cannot be patented.
If OSU probably shouldn’t get a patent on the Vegas Strip, can it emulate Coke and use trade secret? That isn’t too likely either. People have been eating cows for many thousands of years, and we know the animal pretty well. If the OSU folks have indeed identified a piece of meat that was previously undervalued, people who know bovine anatomy will probably have a pretty good idea of where in the animal to look once they’ve seen the steak. And even if somehow the location of the Vegas strip is harder to find than we think it is, the secret will probably get out soon after OSU teaches a slaughterhouse how to extract the steak – someone will talk.
There is, of course, Coke’s great counterexample Coke discloses its formula only to a few top executives, and it takes extraordinary measures to keep the recipe secret. So maybe OSU could also exert strict control over their “recipe” for extracting Vegas strips. To do so, they’d probably have to build their own slaughterhouses, hire just a small number of people to produce the steaks, pay them really well to keep quiet, and bind them to contracts that attempt to punish them if they do not.
The economics of this strategy are hard to see, which is probably why OSU is not pursuing it. That leaves one last possibility.
OSU’s best strategy is probably to claim a trademark in “Vegas Strip”. That way, even if other producers can sell the same cut of meat, they can’t use the same name for it. And in a world where many if not most consumers have no idea which part of the cow their steak comes from, the “Vegas Strip” trademark may be very valuable. If consumers associate a great taste with the “Vegas Strip” name, they’ll pay more for OSU’s steak. And that can help it to beat its competitors even if other producers are allowed to market the same cut of meat.
All of which shows that, as far as IP goes, there is more than one way to skin a cow.