
The Strategic Importance of Protecting Trade Secrets – Lessons from Lao Gan Ma
In the global food industry, which is worth trillions of dollars, proprietary recipes are more than just ingredients—they are crucial competitive assets. The longstanding efforts of Coca-Cola to safeguard its formula and the notable 2016 case involving the theft of Lao Gan Ma’s chili sauce recipe, which caused losses exceeding ten million renminbi, clearly demonstrate the high stakes involved. For food companies, choosing how to protect intellectual property is a vital strategic decision: patents provide twenty years of exclusivity but require full public disclosure, whereas trade secrets can offer indefinite protection if strict confidentiality measures are maintained. Data from China Judgments Online shows a worrying trend, with lawsuits over food trade secrets increasing by an average of 37% annually from 2020 to 2024, and formulation theft making up 68% of these cases, highlighting the growing risks. Risk 1: Insufficient Compliance with Legal Requirements for Trade Secret Protection Many companies fall



