Grinding secrets

Editorial Notebook

July 08, 2006|By BILL THOMPSON

Trading secrets on the playground or in the halls of government can win you cohorts and clout. Trading secrets in the business world can get you a pair of handcuffs and the prospect of spending up to 30 years in prison.

In two separate incidents this week, federal prosecutors charged six individuals with stealing confidential information from major corporations with the intention of turning it over to competitors.

In Atlanta, three people were accused of pilfering classified material, including a small sample of a new drink, from Coca-Cola Co. and offering to sell it to chief soft-drink rival PepsiCo for $1.5 million.

In Detroit, three former employees of an auto supplier were charged with sharing the company's manufacturing secrets with Chinese competitors. The trio's rewards would come down the road through commissions based on sales the Chinese companies would make by using the intelligence.

To its credit, Pepsi dropped a dime on the alleged information thieves and notified Coke, which in turn called in the feds. It can be assumed that both soft-drink peddlers look sternly upon anyone who would dare reveal their secret formulas and that they respect the privacy of each other's corporate inner sanctums. Either that or the sample new drink offered to Pepsi was too much like the so-called New Coke the Atlanta company released in 1985. We can't confirm - or forget - the rumor that New Coke, which was discontinued seven years after its debut, was a Pepsi knockoff.

Stealing actual secret formulas in order to duplicate a product is a serious offense. Some instances, such as the alleged theft of the auto supplier's intelligence, fall under the harsh-sounding U.S. Economic Espionage Act. But sometimes mimicking another product is a sin more acceptable in the corporate world. That seems to be the case with Old Bay Seasoning, the quintessential crab flavoring developed more than 60 years ago by German immigrant and spice grinder Gustav Brunn in Baltimore.

Old Bay is so favored in Maryland as a seafood (and poultry) seasoning that if you don't have at least one of the blue and yellow cans of the stuff in your cupboard, your neighbor likely does. In its marketing material, McCormick & Co., which bought Old Bay in 1990 and moved its operations to Hunt Valley, likes to point out that inventor Brunn developed his own secret recipe. And while the concoction's ingredients are listed on the side of the can in plain sight, Old Bay officials say only their spicemeisters know the correct proportions.

A cursory look through online food sites produces not only lots of Old Bay knockoffs but also a few copycat recipes that purport to be right on the money. They all can't be correct. One site lists eight spices in its recipe. A different site insists 11 spices are required to duplicate Mr. Brunn's particular amalgam. Old Bay doesn't seem to mind, at least not enough to sic the legal department after the site owners. Anyway, the thinking at McCormick is if someone wants to duplicate Old Bay and buys the ingredients from McCormick, the company comes out ahead financially. (For the record, Old Bay contains celery salt, mustard, red pepper, black pepper, bay leaves, cloves, pimento, ginger, mace, cardamom, cinnamon and, of course, paprika.)

There might be another reason that McCormick doesn't threaten to bludgeon its imitators and duplicators with the Espionage Act or, at the state level, the Maryland Uniform Trade Secrets Act. Old Bay is sold in mom-and-pop shops and in the Chesapeake region's food chains, including some of the fancier markets that are putting together their own private-label products. Not surprisingly, a few of the private-label products are seafood seasoning. If McCormick raised a fuss about what it thought was an improper knockoff of its Old Bay standby, the market might just send the spicemaker packing.

That doesn't seem totally fair, but then Old Bay is not Coke or Pepsi. And if there are enough crabs to go around, maybe it really doesn't matter.

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