Coke Re-Evaluates Trade Secret Protection

In this artist's rendering, Edmund Duhaney, left, Joya Williams, center, Ibrahim Dimson make their initial court appearance, Thursday, July 6, 2006, in Atlanta. All three face charges of stealing confidential information, including a sample of a new drink, from The Coca-Cola Co. and trying to sell it to PepsiCo Inc. Williams was ordered released on bond Thursday. Her co-defendants were detained pending a preliminary hearing for all three on Tuesday. (AP Photo/Richard Miller) (Richard Miller - AP)

Coke's general counsel, Geoff Kelly, sent a memo to employees Friday reminding them of just that fact.

Kelly said company policy states that any materials classified as "confidential" must be secured in locked offices and drawers when not in use. He said materials marked "restricted" must be encrypted for electronic transmission, including e-mail, and hard copies must be secured when not in use. Kelly also urged employees to come forward if they see someone doing something inappropriate.

Pharmacist John Pemberton's syrup formula that became known as Coca-Cola is locked away in an Atlanta bank. Pepsi officials have declined to talk about their information security measures.

Williams' lawyer said after a court appearance Thursday that she wants to have the product in question tested to defend her client against accusations that she likened to a "spy novel." She said the product might not be as secret as Coke says, given that her client had access to it as part of her job.

While anyone could take a Coke product currently on the market and have it tested to see what's in it, the larger concern among companies such as Coke is preventing the product itself from being known by the competition before it is released, said John Sicher, an industry analyst and editor of Beverage Digest.

"It's not about what the formula is, it's about what the product is," Sicher said. "When Coke several years ago came out with Vanilla Coke, they wanted that to be ahead of everybody else doing a vanilla cola. So, it's about what the product is. The innovation itself is what they try to keep secret."

The Coke case has renewed a discussion of protecting corporate trade secrets.

At Atlanta-based BellSouth Corp., the telecommunications provider regularly examines its process for assuring that employees understand the importance of not revealing the company's technology secrets, spokesman Joe Chandler said.

UPS Inc., the Atlanta-based shipping carrier, requires management employees to attend a class every year that reminds them about the importance of protecting trade secrets and also of not accepting information about a competitor, spokesman Norm Black said.

But all the protection in the world might not stop a determined thief.

"The lab at Los Alamos can't protect every secret from someone who wants to engage in misconduct, and no company could," said Sicher.