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What's a Trade Secret? (And What Would Happen if You Stole The Colonel's?)

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Earlier this week, KFC removed Colonel Harland Sanders' original handwritten recipe of 11 herbs and spices that go into the company's signature fried chicken from its safe storage place. The 68-year-old recipe had been resting in a locked filing cabinet inside a vault at the company's Louisville headquarters, and it was only removed under the watchful eyes of many guards so the company could upgrade the security around the piece of paper. Why all the fuss? Are these measures just publicity-seeking theatrics for KFC? Why does KFC need to keep the recipe under lock and key anyway?

The KFC recipe is part of a larger class of corporate knowledge known as trade secrets. Broadly defined, a trade secret is a process (think of things like Web search algorithms), formula, practice, design, or other secret information to which the public doesn't have access that allows a company to gain a competitive advantage over the rest of its industry. In this case, KFC feels that its spice blend enables the company to make particularly delicious chicken that's differentiated from the rest of the fried-chicken market. The public seems to agree; KFC raked in over $5 billion in domestic sales last year. If another chicken company got their hands on this spice blend, they could conceivably replicate the delicious fried poultry and effectively eat away at KFC's market share. As such, KFC maintains its recipe as a trade secret to keep competitors at bay.

If KFC wants to protect its recipe, why doesn't it just get a patent?

Because then the cat would be out of the bag on what the 11 spices are. In order to acquire a patent, a company has to give pretty exhaustive information on what it's patenting to the United States Patent and Trademark Office. If the office granted a patent, the information would then become public. Although KFC would have a temporary monopoly (usually for 20 years) on that particular recipe, every chicken shack owner in the country could start toying with the recipe, making little tweaks to it, and potentially coming up with something even better. None of that would be good for the Colonel. But by keeping the recipe a closely guarded secret, the company can theoretically keep its advantage forever. Since apparently no one has the first clue what the 11 spices are, much less the proportions in which they're mixed, the company can feel safe as long as it guards the recipe.

Companies with these sorts of trade secrets generally make employees sign non-disclosure and confidentiality agreements, so the select few who get to see the recipe don't run off and start their own chicken businesses. Anyone who tries to swipe a trade secret through espionage should be ready for a lot of legal liability and potential jail time. Just ask Kate Hudson, who came under fire last month for allegedly pilfering a trade secret in the formulation of her new hair-care products.

Does that mean there's no way we'll ever see another company selling KFC's chicken?
Not quite. One downside of a trade secret is that it's perfectly legal for competitors to try to reverse engineer someone else's product. You want to make KFC chicken legally? Get in the kitchen and tinker with spice blends until you figure out the one that tastes just like it. Alternatively, if a chef serendipitously came up with the spice blend independently without sneaking a peak at KFC's recipe, she could start legally trafficking in the bird.

The KFC spice blend is just one example of a jealously guarded trade secret, though. Here are a few other notable ones:

The Coca-Cola Formula
Coke_Bottle.jpgThe Coca-Cola formula, which is known by the code name "Merchandise 7X," is possibly the best-known trade secret in the world. The formula, which dates back to the drink's 1886 invention by Joseph S. Pemberton, is written on a piece of paper that resides in an Atlanta bank. Despite decades of attempts to figure out the formula, no one has succeeded yet; these failures are why the knock-off store brand sodas you buy never taste quite like the real thing. Coke is not afraid to go to great lengths to maintain the secrecy of the formula. In 1977 the Indian government demanded that the company reveal the recipe to keep its ability to sell the beverage in India. Coke decided it would rather leave the market altogether rather than give up its secret; you couldn't buy a Coca-Cola in India until the government relented in 1993.

McDonald's "Special Sauce"
We all know the Big Mac jingle. What we don't know is exactly how to make the sauce. The burger itself was originally conceived in Pittsburgh to compete with Big Boy's signature burger, but it was so popular it had to get a national audience. The sauce is pretty analogous to Thousand Island dressing, but the actual formulation remains a secret sought by beef aficionados everywhere.

The Krispy Kreme Recipe
krispy_kreme.jpgKrispy Kreme opened in Winston-Salem, NC, in 1937 after founder Vernon Rudolph bought a secret recipe for yeast donuts from a New Orleans chef. Despite the company's meteoric rise over the last seven decades, the recipe remains locked in a vault in Winston-Salem and is known by only a select few. (As someone who went to college in Winston-Salem and ate way too many Krispy Kremes, my educated guess is that the secret ingredient is either awesomeness or love. Possibly both.)

Google AdWords
AdWords is Google's advertising product that places pay-per-click banner and text ads throughout the Web and provides site-targeted ads. The system is certainly successful; it pulled in over $16 billion last year. How do the ads get placed on individual pages, though? Good question, but it's one that will remain a mystery since the algorithm is a trade secret.

Gillette Razor Designs
Here's an example of why you don't want to steal a trade secret. In 1997, Wright Industries was helping Gillette design a new razor that was extremely confidential and potentially valuable. Wright Industries employee Steven L. Davis worried that his job was in jeopardy and had a grudge against his supervisor, so he swiped a bunch of trade secrets, including drawings of razor designs and data and sent them to Bic, Warner-Lambert, and other competitors. Bad move. The 1996 Congressional passing of the Economic Espionage Act made stealing trade secrets a federal crime. Davis pled guilty to five counts of theft of trade secrets and received a sentence of 27 months in jail and over a million dollars in fines.

Ethan Trex co-writes Straight Cash, Homey, the Internet's undisputed top source for pictures of people in Ryan Leaf jerseys.
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iStock // Ekaterina Minaeva
Man Buys Two Metric Tons of LEGO Bricks; Sorts Them Via Machine Learning
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iStock // Ekaterina Minaeva

Jacques Mattheij made a small, but awesome, mistake. He went on eBay one evening and bid on a bunch of bulk LEGO brick auctions, then went to sleep. Upon waking, he discovered that he was the high bidder on many, and was now the proud owner of two tons of LEGO bricks. (This is about 4400 pounds.) He wrote, "[L]esson 1: if you win almost all bids you are bidding too high."

Mattheij had noticed that bulk, unsorted bricks sell for something like €10/kilogram, whereas sets are roughly €40/kg and rare parts go for up to €100/kg. Much of the value of the bricks is in their sorting. If he could reduce the entropy of these bins of unsorted bricks, he could make a tidy profit. While many people do this work by hand, the problem is enormous—just the kind of challenge for a computer. Mattheij writes:

There are 38000+ shapes and there are 100+ possible shades of color (you can roughly tell how old someone is by asking them what lego colors they remember from their youth).

In the following months, Mattheij built a proof-of-concept sorting system using, of course, LEGO. He broke the problem down into a series of sub-problems (including "feeding LEGO reliably from a hopper is surprisingly hard," one of those facts of nature that will stymie even the best system design). After tinkering with the prototype at length, he expanded the system to a surprisingly complex system of conveyer belts (powered by a home treadmill), various pieces of cabinetry, and "copious quantities of crazy glue."

Here's a video showing the current system running at low speed:

The key part of the system was running the bricks past a camera paired with a computer running a neural net-based image classifier. That allows the computer (when sufficiently trained on brick images) to recognize bricks and thus categorize them by color, shape, or other parameters. Remember that as bricks pass by, they can be in any orientation, can be dirty, can even be stuck to other pieces. So having a flexible software system is key to recognizing—in a fraction of a second—what a given brick is, in order to sort it out. When a match is found, a jet of compressed air pops the piece off the conveyer belt and into a waiting bin.

After much experimentation, Mattheij rewrote the software (several times in fact) to accomplish a variety of basic tasks. At its core, the system takes images from a webcam and feeds them to a neural network to do the classification. Of course, the neural net needs to be "trained" by showing it lots of images, and telling it what those images represent. Mattheij's breakthrough was allowing the machine to effectively train itself, with guidance: Running pieces through allows the system to take its own photos, make a guess, and build on that guess. As long as Mattheij corrects the incorrect guesses, he ends up with a decent (and self-reinforcing) corpus of training data. As the machine continues running, it can rack up more training, allowing it to recognize a broad variety of pieces on the fly.

Here's another video, focusing on how the pieces move on conveyer belts (running at slow speed so puny humans can follow). You can also see the air jets in action:

In an email interview, Mattheij told Mental Floss that the system currently sorts LEGO bricks into more than 50 categories. It can also be run in a color-sorting mode to bin the parts across 12 color groups. (Thus at present you'd likely do a two-pass sort on the bricks: once for shape, then a separate pass for color.) He continues to refine the system, with a focus on making its recognition abilities faster. At some point down the line, he plans to make the software portion open source. You're on your own as far as building conveyer belts, bins, and so forth.

Check out Mattheij's writeup in two parts for more information. It starts with an overview of the story, followed up with a deep dive on the software. He's also tweeting about the project (among other things). And if you look around a bit, you'll find bulk LEGO brick auctions online—it's definitely a thing!

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One Bite From This Tick Can Make You Allergic to Meat
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We like to believe that there’s no such thing as a bad organism, that every creature must have its place in the world. But ticks are really making that difficult. As if Lyme disease wasn't bad enough, scientists say some ticks carry a pathogen that causes a sudden and dangerous allergy to meat. Yes, meat.

The Lone Star tick (Amblyomma americanum) mostly looks like your average tick, with a tiny head and a big fat behind, except the adult female has a Texas-shaped spot on its back—thus the name.

Unlike other American ticks, the Lone Star feeds on humans at every stage of its life cycle. Even the larvae want our blood. You can’t get Lyme disease from the Lone Star tick, but you can get something even more mysterious: the inability to safely consume a bacon cheeseburger.

"The weird thing about [this reaction] is it can occur within three to 10 or 12 hours, so patients have no idea what prompted their allergic reactions," allergist Ronald Saff, of the Florida State University College of Medicine, told Business Insider.

What prompted them was STARI, or southern tick-associated rash illness. People with STARI may develop a circular rash like the one commonly seen in Lyme disease. They may feel achy, fatigued, and fevered. And their next meal could make them very, very sick.

Saff now sees at least one patient per week with STARI and a sensitivity to galactose-alpha-1, 3-galactose—more commonly known as alpha-gal—a sugar molecule found in mammal tissue like pork, beef, and lamb. Several hours after eating, patients’ immune systems overreact to alpha-gal, with symptoms ranging from an itchy rash to throat swelling.

Even worse, the more times a person is bitten, the more likely it becomes that they will develop this dangerous allergy.

The tick’s range currently covers the southern, eastern, and south-central U.S., but even that is changing. "We expect with warming temperatures, the tick is going to slowly make its way northward and westward and cause more problems than they're already causing," Saff said. We've already seen that occur with the deer ticks that cause Lyme disease, and 2017 is projected to be an especially bad year.

There’s so much we don’t understand about alpha-gal sensitivity. Scientists don’t know why it happens, how to treat it, or if it's permanent. All they can do is advise us to be vigilant and follow basic tick-avoidance practices.

[h/t Business Insider]