How a trade secret overpowers the value of a patent

In the early days before launching ELAJ® skincare products officially to the mass market, the most common question from loyal customers was if my family’s precious formula was patented before I pitch to investors or go on a TV show such as “Shark Tank” or license it. Each time I said, “no” — the disapproving reaction was always the same — as if I were little Red Riding Hood going to the big, bad wolf.

Knowing this conversation was only happening because our customers felt protective over ELAJ®’s future success, I gently had to assure them that I had taken even more necessary precautions without an official patent. I simply opted to protect my “trade secret” like Coca-Cola and KFC famously did.

Most people do not know the level of revealing details filing a patent requires and then that information becomes public. In our case, we would have to disclose ingredients, percentages and proprietary manufacturing procedures. A competitor could take that information, alter ingredients with as little as 10 percent change and voila — another similar product on the market, and we’d have no recourse against them.

Patents expire

Now imagine filing a patent that has an expiration date! So you build your product, brand, company while having your proprietary information on display and wolves waiting on the sidelines of your marathon launch hoping you stumble along the way and not pay one of three expensive renewal fees.

You’ve got lots of energy and stamina to run many marathons, you’re building a multi-generational product and company, but the patent deadline limits your product’s exclusivity, in most cases to a first run of 20 years. So much for building a legacy!

A simple way to protect a formula or invention is to manufacture it yourself and limit exposure by having only trusted persons involved in limited capacities. That’s great — until you get so big that is no longer feasible. In our case, ELAJ® had to be manufactured in a certified FDA registered facility that handles complicated over-the-counter medications procedures and testing. That was the beginning of many sleepless nights.

You might be a bit sneaky

Until I became proactive and strategized how to set up our own sneaky and protective “Trade Secret Shield” around ELAJ® by learning that the San Diego-based company WD-40 manufactures their popular greasy substance in three different cities around the globe then passes it on to its manufacturing partners for final compilation. That way, even their manufacturing facility is receiving parts unknown! Expensive — but it truly is a most brilliant protection system.

In cosmetics, any laboratory could “reverse bioengineer” a similar formula with the technology that is available and create knockoffs. However, it just so happens that there are certain innate aspects of ELAJ® so complicated, if procedure is altered, even slightly, the entire batch is destroyed and efficacy is sabotaged. The ingredients are not compatible unless done a precisely consistent way.

Another one of my favorite “monopolize & lockout” strategies is to create “exclusive partnerships” with the best suppliers for certain ingredients. Quality is everything in cosmetic and medicinal ingredients and when you can find a consistent supplier that is just as obsessed with quality and potency, then you can partner with them so they only sell to you…that is a
powerful game changer and elevates your ability to sleep at night!

But my all-time No. 1 trade secret is fostering customer loyalty. Our beloved customers are still just as protective of ELAJ® and are our eyes and ears to what’s happening. Nothing beats brand loyalty and that is the only insurance policy any company could wish for and hope to attain.

Suhein Beck is the founder and CEO of ELAJ® LLC, a company dedicated to providing natural and healthy skincare solutions and can be found at www.GetELAJ.com and  available at most major retailers like Bed, Bath & Beyond,
Wal-Mart. Suhein is also the author of SkinConfessions.com, a blog dedicated to raising public awareness. Through this blog and her non-profit organization, Healing Scars Globally, she hopes to shine a spotlight of attention on the epidemic of Eczema, Psoriasis, and other autoimmune problems affecting skin on a global level.