Patent or Trade Secret? What the WD-40 Story Teaches About Protecting Innovation When Disclosure Can Destroy Advantage

Author: M. Hartwell

Affiliation: Independent Researcher

Abstract

A common business claim—often repeated in classrooms, boardrooms, and social media—is that WD-40 never patented its formula so that “no one would ever know the secret,” and that this choice helped the product remain defensible for decades. This article examines whether that claim is true, what it implies about the strategic trade-off between patenting and secrecy, and how similar logic appears across industries from food and beverages to software and manufacturing. Using a theory-grounded lens that combines Bourdieu’s concepts of capital and fields, world-systems theory’s attention to core–periphery competitive dynamics, and institutional isomorphism’s explanation for why firms imitate “legitimate” protection strategies, the article argues that intellectual property (IP) choices are not only legal decisions but also social and geopolitical positioning moves. Methodologically, the paper uses a conceptual-analytic approach supported by comparative mini-cases (including WD-40, LEGO-compatible bricks, and pharmaceutical “patent cliffs”) to show how patents can create time-limited monopoly benefits while forcing disclosure that may enable imitation once exclusivity ends. Conversely, trade secrecy can preserve advantage indefinitely—if secrecy is feasible and enforceable—but can fail abruptly through reverse engineering, leaks, or employee mobility. The main finding is that patents do not inherently “make you lose your product with time,” but they do impose a planned sunset and a disclosure obligation that changes the long-run competitive landscape. The paper concludes with a practical decision framework for managers choosing between patenting and secrecy and highlights the importance of institutional context, enforcement capacity, and global diffusion pressures.

Introduction

Managers often speak about IP strategy as if it were a simple rule: “Patent it or someone will steal it,” or the opposite: “If you patent it, you give the recipe away.” The reality is more complicated. Patents and trade secrets are different bargains with society. A patent is a public deal: disclose the invention in exchange for a temporary right to exclude others. A trade secret is a private deal: keep the valuable know-how confidential, and the law may protect it against improper acquisition or disclosure—but not against independent discovery or lawful reverse engineering.

The WD-40 example appears frequently in popular explanations of this trade-off. The story is usually told like this: WD-40 did not patent its formula; therefore competitors cannot read the formula in a patent database; therefore the secret remains safe “forever.” On the company’s own materials, WD-40 describes the formula as a protected trade secret and states that it never filed a patent for the formula. It also publicly rejects claims that the “secret sauce” has been revealed. In other words, the core claim—the formula was not patented and is kept as a trade secret—is consistent with the firm’s own statement. (WD-40 Company, 2026; WD-40 Company, 2026; also see recent journalistic reporting on the extreme internal controls around the formula’s access, Wall Street Journal, 2026.)

But does that mean patents “make you lose your product with time”? Sometimes yes—if the product’s advantage rests mainly on information that becomes easy to copy once disclosed. Sometimes no—if the advantage rests on manufacturing complexity, complementary assets (brand, distribution, service), continuous innovation, or a portfolio of improvements that refresh protection over time. In many industries, patents are not a single event but a repeating cycle: incremental innovations, layered claims, and complementary protections.

This article addresses three questions:

1. Is it true that WD-40 did not patent its formula to keep it secret?

2. If true, what does that imply about the risk that patents “cause” long-run loss of advantage?

3. What examples illustrate the patent-versus-secrecy trade-off across sectors and global competition?

To answer, we combine theory with real-world cases and develop a decision framework that is practical for management readers while remaining conceptually rigorous.

Background and Theory

Patents and trade secrets as strategic choices

A utility patent’s term in many jurisdictions is generally 20 years from the earliest effective filing date (with details varying by jurisdiction and possible adjustments). This means a patent is inherently time-limited, with protection eventually expiring and the invention entering the public domain (USPTO, 2019; FDA, 2025). The patent bargain also requires disclosure: the application must describe the invention in sufficient detail for others skilled in the field to practice it after the patent expires.

Trade secret protection is different. There is no registration requirement, and there is no fixed expiry date. The “term” can be indefinite—but only as long as secrecy is maintained and the information retains economic value from being secret. If a competitor reverse engineers a product lawfully, trade secret law typically does not stop them. So secrecy is powerful but fragile.

Modern firms often combine these approaches: patent some elements, keep other elements secret, and build brand and supply chain advantages around them.

Bourdieu: capital, fields, and symbolic legitimacy

Bourdieu helps explain why IP is not just about legal exclusion; it is also about status and legitimacy in a competitive field. Patents can function as symbolic capital—signals of technical sophistication, R&D capability, and legitimacy to investors, partners, and regulators. In many fields (biotech, advanced manufacturing), a strong patent portfolio is a form of reputational currency that shapes access to funding and alliances.

Trade secrecy, in contrast, may create less visible symbolic capital. A firm might keep the most valuable knowledge hidden, but secrecy can be harder to display as an asset. This matters because corporate strategy often involves competing not only for customers but also for recognition in the “field” of finance, media, and policy.

Thus, a “patent-heavy” strategy may be adopted partly because it is legible and prestigious within a field—even when secrecy would be more defensible technically.

World-systems theory: core–periphery diffusion and imitation

World-systems theory highlights uneven global capabilities. Knowledge and technologies often emerge in “core” regions with stronger research infrastructure, enforcement institutions, and capital. But production and imitation pressure may intensify as ideas diffuse through global supply chains, including “semi-periphery” and “periphery” contexts where manufacturing capacity grows quickly.

Patents accelerate diffusion in a structured way by publishing technical knowledge. When patents expire, they can enable fast imitation across regions with strong manufacturing capabilities. Trade secrets can slow diffusion—unless reverse engineering is easy or talent mobility transfers know-how.

In short, global competition makes the disclosure-versus-secrecy decision more consequential: in a fast-diffusing world economy, the “afterlife” of disclosure can be enormous.

Institutional isomorphism: why firms copy “legitimate” IP strategies

Institutional isomorphism explains why organizations often become similar over time through coercive, mimetic, and normative pressures. In IP strategy:

• Coercive pressures: investors, governments, or procurement rules may push for patented technologies.

• Normative pressures: professional norms (law firms, R&D managers, tech transfer offices) may treat patenting as the default “good practice.”

• Mimetic pressures: in uncertainty, firms imitate successful peers—“Company X patents everything, so we should too.”

This can produce a pattern where firms patent even when trade secrecy might better protect the core advantage, because patents are institutionally validated and easily measured.

Recent legal scholarship emphasizes the conceptual opposition between patents (disclose for exclusion) and trade secrets (nondisclose for protection), while also noting that in real innovation ecosystems, the two can be complementary or strategically interwoven (NYU Journal of Intellectual Property and Entertainment Law, 2024).

Method

This study uses a conceptual-analytic method supported by comparative mini-cases. The approach has three steps:

1. Conceptual clarification: define what “losing a product” means in IP terms (loss of exclusivity, commoditization, margin erosion, loss of differentiation).

2. Theory-guided interpretation: apply Bourdieu, world-systems, and institutional isomorphism to explain why firms choose patents or secrecy beyond purely legal reasons.

3. Comparative illustration: use brief cases to show patterns:

   • WD-40 (trade secret choice, non-patenting of formula)

   • LEGO-compatible bricks (patent expiry enabling competition)

   • Pharmaceutical patent expiry (“patent cliffs”) and price effects

Data sources are publicly available: company statements, legal/administrative guidance on patent term, peer-reviewed and scholarly articles on disclosure and trade secrecy, and well-known historical examples. The goal is not to estimate causal effect sizes but to build a rigorous explanatory account that is useful for managers.

Analysis

1) The WD-40 claim: what is true, and what it really means

Is it true WD-40 did not patent its formula?

According to WD-40’s own “facts” and “myths” materials, the formula for the core multi-use product is maintained as a trade secret and the company states it never filed for a patent on the formula. The company also explicitly warns that claims alleging the formula has been disclosed are inaccurate (WD-40 Company, 2026; WD-40 Company, 2026). Recent reporting describes strict internal controls and limited access procedures around the formula, reinforcing that secrecy is central to the brand’s IP posture (Wall Street Journal, 2026).

What does this imply?

It implies WD-40 made a rational judgment that:

• The product could be kept secret in practice (or at least difficult to replicate at full performance and cost).

• Disclosure through patenting could have enabled structured imitation after expiry.

• The company preferred an indefinite, secrecy-based moat rather than a time-limited patent-based moat.

However, it does not imply that patenting automatically leads to losing a product. It implies that for certain kinds of innovations, especially ones that can be copied once disclosed and that do not change quickly, secrecy can outperform patents.

2) Why patents can feel like “giving away the secret”

Patents require disclosure sufficient for replication. This is the essence of the social bargain. The risk is not only that competitors can read the patent—during the term they are still excluded—but that after expiry, the patent can become a high-quality instruction manual for competitors.

This is especially dangerous when:

• The innovation is a formula, recipe, or process that is stable over time.

• The product can be replicated cheaply once known.

• The firm lacks strong complementary assets (brand may help but may not protect margins if generics flood the market).

In such cases, a patent can create a “scheduled commoditization event.”

3) Why trade secrets can feel like “owning forever”—but can collapse

Trade secrets can theoretically last indefinitely. But they are contingent. They can fail through:

• Reverse engineering (lawful in many contexts)

• Independent discovery by competitors

• Leaks (cybersecurity breaches, documentation errors)

• Employee mobility and imperfect controls

• Regulatory disclosure requirements in certain industries

So the trade secret strategy works best when secrecy is operationally realistic and the product is difficult to reverse engineer.

4) Mini-case A: LEGO bricks and the economics of patent expiry

LEGO’s basic brick mechanics were historically protected by patents. When underlying patents expired (commonly cited as 1978 for core elements), competitors could legally produce compatible bricks, contributing to a market of “LEGO-compatible” products (Wikipedia, 2026; also see broader IP strategy discussions in IP commentary, e.g., FutureIP, 2024). The LEGO case shows a classic patent outcome: patents can secure a period of exclusivity, but after expiry, functional elements may become widely imitated, shifting competition to brand, design, and ecosystem.

This does not mean LEGO “lost the product.” It means the basis of competitive advantage shifted:

• from “exclusive functionality”

• to “brand + design + ecosystem + distribution + continuous innovation”

This illustrates a key managerial lesson: patents can expire, but firms can adapt by building non-patent moats.

5) Mini-case B: pharmaceuticals and the “patent cliff”

In pharmaceuticals, the “patent cliff” is a known phenomenon: when patents expire, generic entry can dramatically reduce prices and erode revenue. Empirical reviews find significant price decreases after patent expiry across many settings (Vondeling et al., 2018). Regulatory systems also interact with patent terms and exclusivities (FDA, 2025).

This is a sector where patents are often unavoidable because:

• secrecy is hard (chemical structures can be analyzed),

• regulators require disclosure, and

• R&D costs are high, making time-limited exclusivity central to the business model.

Here, patents do not “make you lose the product” so much as they create an expected lifecycle that firms manage through pipelines, incremental innovation, formulation changes, and new indications. The industry strategy is not to avoid expiry but to plan around it.

6) What the WD-40 story reveals through theory

Bourdieu (field and capital):

WD-40’s secrecy strategy also produces symbolic capital: “mystique.” The secret becomes part of the brand narrative—an intangible asset that strengthens consumer attention and loyalty (WD-40 Company, 2026; Wall Street Journal, 2026). In contrast, a patent strategy would have produced visible technical capital but reduced mystique and created a long-term disclosure trail.

World-systems (diffusion pressures):

A public patent accelerates global diffusion of technical knowledge. When expiry arrives, global manufacturing networks can scale imitation quickly. A trade secret can slow this diffusion—especially if manufacturing quality is hard to match and tacit know-how matters.

Institutional isomorphism (copying the “patent everything” norm):

Despite WD-40-like examples, many firms still default to patenting because it is institutionally rewarded. Patents are countable; secrecy is not. Patents are legible to investors; secrecy can look like “nothing to show.” This can bias firms toward patenting even when secrecy would better defend the core value.

7) Do patents “make you lose your product with time”? A precise answer

A more accurate statement is:

• Patents guarantee eventual loss of exclusivity for what is disclosed and claimed, because the right is time-limited by design (USPTO, 2019; FDA, 2025).

• Patents do not guarantee loss of market position, because firms can sustain advantage through brand, scale, networks, manufacturing excellence, and continuous innovation.

• Patents can increase imitation capacity after expiry because they publish structured knowledge.

• Trade secrets can preserve exclusivity indefinitely, but they can also fail suddenly and provide no protection against independent discovery or lawful reverse engineering.

So the right managerial question is not “Will patents make me lose my product?” but:“Which protection strategy maximizes long-run advantage given the nature of the innovation, the industry’s disclosure environment, and my ability to maintain secrecy or innovate continuously?”

Findings

1. The WD-40 core claim is consistent with company statements: WD-40 represents its formula as a protected trade secret and says it never filed a patent for the formula, while also rejecting claims that the full formula is publicly known (WD-40 Company, 2026; WD-40 Company, 2026).

2. Patents create planned obsolescence of exclusivity, not automatic business failure: patent rights are time-limited (commonly framed as 20 years from filing in many systems), so exclusivity ends by design (USPTO, 2019; FDA, 2025).

3. Disclosure is the strategic “cost” of patenting: after expiry, patents can enable structured replication, especially for stable formulas or processes that are easy to copy once known (NYU JIPEL, 2024; Boot, 2025).

4. Trade secrets can outlast patents but require operational excellence: secrecy demands governance (access controls, segmentation of knowledge, NDAs, cybersecurity) and is vulnerable to reverse engineering and leakage.

5. Competitive outcomes depend on complementary assets and global diffusion: LEGO illustrates that expiry can open functional imitation while firms compete through brand and ecosystem, and pharmaceuticals illustrate revenue cliffs but also lifecycle management (Vondeling et al., 2018; Wikipedia, 2026).

6. Institutional pressures shape IP strategy beyond rational efficiency: firms may over-patent due to legitimacy norms, investor expectations, and imitation of peers, even when secrecy would be more protective (NYU JIPEL, 2024; AIPPI, 2024).

7. A practical decision rule emerges: patent when reverse engineering is easy, disclosure is unavoidable, or licensing and visible signaling matter; use trade secrets when the value lies in tacit know-how, recipes, or processes that can be kept secret and remain valuable for a long time.

Conclusion

The WD-40 story is not simply a clever anecdote. It is a compact lesson in the political economy of innovation protection. WD-40’s choice to keep its formula as a trade secret—rather than disclose it through patenting—aligns with a strategic logic: when secrecy is feasible, when the formula is stable, and when disclosure would meaningfully improve competitors’ ability to imitate, trade secrecy can be more durable than patents.

But the broader claim that “patents make you lose your product with time” needs refinement. Patents do end, and disclosure can empower post-expiry imitation. Yet patents can also be the foundation of enormous value creation, particularly in sectors where secrecy is unrealistic or regulatory disclosure is mandatory. The key is matching the IP approach to the innovation’s characteristics, the firm’s complementary assets, and the global competitive environment.

From a Bourdieu-inspired view, patents and secrets are not just legal instruments; they are also assets in a social field of legitimacy, investment, and reputation. From a world-systems view, disclosure interacts with global diffusion and manufacturing capacity, shaping where and how imitation happens. From an institutional isomorphism view, many firms patent because it is culturally coded as “serious innovation,” even when secrecy might better defend advantage.

For managers, the practical takeaway is to treat IP strategy as a portfolio of choices. Patents can buy time and credibility. Trade secrets can preserve advantage indefinitely. Neither is universally superior. The winning strategy is the one that aligns protection with the real source of competitive advantage—and that anticipates how competitors will learn, copy, and scale in a connected world.

Hashtags

#InnovationStrategy #IntellectualProperty #TradeSecrets #PatentStrategy #TechnologyManagement #CompetitiveAdvantage #BusinessResearch

References

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