Why does Coca Cola Company fail to protect their receipe with patents?

We shall remember that, at any time, choices of IP protection shall always rest on profitability. If the patent protection make people lose money, then people would choose to avoid that.

By patenting the receipe of coke, Coca Cola company have to DISCLOSE the receipe to the world. In return, the receipe MAY be protected for a max of 20 years. After the protecting period expires, Coca Cola receipe falls into public knowledge, and anyone may use it anywhere.

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It is not so easy to crack the coke receipe. Why would Coca Cola disclose their receipe to exchange for a short protection?

Surely, if the receipe is disclosed accidentally, anyone in the world may begin to use this receipe, and numberous competitors appear. In order to minimize the harm brought by the possible competitors, Coca Cola has invested a lot of money on their Trademarks and Scale of Production.

Now Coca Cola have a famous brand. Even two coke products taste the same, you would still choose Coca Cola.

By holding huge scale of production, Coca Cola is able to produce coke at a very very low cost. Even when another company begin to produce the same coke, they can never make coke this cheap.

Even when it is profitable to patent your product, you may still see no “patent” directly linked to a particular “product model”. See iPhone. Thousand of patents may be linked to the product, and there is no patent to protect “iPhone X”. We may need such strategies to mislead competitors, max the protection range, …

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Who benefits from intellectual property laws?

The traditional economic argument for patenting is that since innovation is a highly risky endeavor and the benefits to society are often greater than the benefits to the innovator, if filled with rational actors, society would otherwise underinvest in innovation. In addition, if the innovator keeps her invention secret then it is difficult for others to benefit from this information and make further innovations. So the solution offered by patent policy is to give the innovator monopoly profits for a period of time in exchange for putting the information behind the patent into the pubic domain.  There are other methods for encouraging innovation, including R&D tax credits, subsidies, government procurement, or prizes for innovation.

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Arora and coauthors (2008) find that patents stimulate R&D across a wide range of manufacturing industries. Moser (2005) finds that countries without patent protection tend to concentrate their innovation in industries where trade secrets are most effective, so patenting spreads out the distribution of innovative activity. However, she also concludes that for developing countries creating a patent system may not be an optimal solution initially.

Generally speaking, IP law favors creators. In most developed nations, it is possible for private litigants to prevail in court when substantive claims are made. There is a long history of cases decided for the "little guy".

Corporate entities may try to stall such proceedings or to overwhelm claimants, but well documented IP rights are often upheld or settled for the benefit of the creator.

Without such laws, we would be awash in a sea of piracy. We would be left only with trade secrets as our sole protection which would make production costs skyrocket, or keep artists and trade entities relatively unknown and mired in litigation.

This is not to say that all use of IP law is fair to creators and consumers. Knowledgable artists will be among the first to point to "public domain" as a key and critical part of IP law which is being usurped by corporations in the USA and possibly globally. Public domain is built on a premise that at some point, creations become a part of the cultural fabric.

The Micky Mouse character known as "Steamboat Willie" is often cited as central to this debate. As the film short was about to enter public domain American copyright protections were extended to protect this Walt Disney property. However a viable argument can and is often made that Disney can protect its interests through Trademark law, while allowing the world access to the original production as a part of global culture through public domain.

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