When to disclose formula %

Hello,
I'm new here to the forum!  I've browsed Chemists Corner on occasion, but look forward to participating in conversation when I have the chance.

I am a formulator for a brand of makeup and skincare.  I do not have formal training.  Just 12 years of trial and error experience.  I own a successful brand in Canada, and we also manufacture for other brands globally.

I have a question about when it is necessary as a formulator to disclose your exact formula to private label clients.

Within the past year, we formulated and manufactured a range of color cosmetics for a certified organic brand.  They requested the exact formulas for their certification process.  I did give them the formula for the one product we produced.  Now I have developed 2 new products for them, and once again they are requesting the exact % as well as supplier list. 

I'm curious to know what is typical in the industry?  Is this standard?

I have another client whom we have been producing for, for several years.  This week, they also asked for the exact formulation of all the products we make for them.  They said that they need it for the regulation process to get their products into the Middle East. 

I feel that by disclosing my formulas, that I'm practically selling my soul and all the hard work I've put into developing the products.  For me at least, it has taken years to fine-tune things. 

Curious if anyone has experience with this type of situation.  Thank you!!

Comments

  • DavidDavid Member
    edited December 2015
    The short answer is that with increasing regulations it is harder to keep your formula secret, so I would say yes it is more and more typical that clients for different reasons ask for exact formulations. (at least in the EU) There are usually ways to go around it but that will be the long answer...:)
  • Hi Candace
    I cant comment on what is 'typical' in the industry, but I would not be disclosing formulas without a client actually purchasing them. I do the something similar to you and when a formualtion is  requested for export, I contact the relevant authority to get the exact guideline on what they need to register that product for customs approval and I do that paperwork myself. 
    Your Organic product may need docs to actually prove you use certified organics but this can certainly be done without disclosing exact formulas. There are ingredients that have controls on their usage and the % as well, and many countries are different with levels of use and what they will accept through customs. 
    If I was your client and asked you for an exact formula AND your supplier list then there is nothing stopping me from finding another manufacturer to make that product, unless you have an ironclad contract or patent on your formula.
    Do plenty of research before you decide.
  • Some suppliers, especially fragrance suppliers, do disclose their formula. But they disclose it directly to the government agency or regulatory body that requires the quantitative formula. Maybe you can try that. And tell the regulatory authority that the registration you are filing for is for your client.
    Formulator. Currently specializes in formulating natural cosmetics.
  • BobzchemistBobzchemist Member, PCF student
    I would tell both of them that you need to see who's requesting this information from your client, and why. Then, as Kirk suggests, contact them directly, and let them know that trade secrets are involved in the formulation and manufacturing that you do not want to disclose to your customer. Most organic certifiers and regulatory agencies will respect this. But...I would also absolutely require a very strong NDA (Non-disclosure Agreement) from both of your clients covering all your formulations, including the one you already revealed - with penalties built in for revealing the info to anyone.. 

    My next suggestion may be trickier to deal with - I'd suggest that the price of revealing this information to your customers is a contract with a long-term commitment and substantial fees for breaking it, or a one-time payment for them to purchase the formula/IP/testing data from you. ChicoB is exactly correct - many, even most, companies in this industry will think nothing of taking all your hard work and just giving it to any other contract manufacturer who promises to save them money- and most contract manufacturers will accept the information without a second thought. You HAVE to protect yourself - no one else will do it for you.
    Robert Zonis, Sr. Formulation Chemist, Beaumont Products "All opinions and comments expressed are my own, have no relation to Beaumont Products, are fully copyrighted, and may not be used without written permission."
  • Wow, thank you all for this very helpful advice.
    I can see that I am right to be hesitant about flippantly passing on the quantitative formulas directly to my clients.  
    Your responses give me confidence to be adamant about dealing directly with the government agency or regulatory body in these situations.  
  • MarkBroussardMarkBroussard Member, Professional Chemist
    @Candace:

    Is your manufacturing facility Organic certified?  

    Organic certification for a product generally requires an on-site audit of the manufacturing facility producing the product and the ingredients used to ensure the product and process meets the requirements for organic certification.  The quantity of organic ingredients must be calculated to ensure that the % organic ingredients meets the minimum threshold required by the certifying body.

    So, if you are manufacturing certified organic products why do you not simply tell your client that you will reveal that information directly to the certifying auditor if you retain IP rights to the formulation and they're going to have to visit your facility under any circumstances.  Unless, you're formulating for an Organic brand, but the products you are manufacturing for them are not Certified Organic.
    Chemist/Microbiologist formulating in the Organic & Naturals arena under ECOCert/Natural Products Assn/Whole Foods/National Organic Program guidelines focused skincare & haircare products. 

    See website for details www.desertinbloomcosmeticslab.com

  • Yes, our facility is certified organic.  We went through the process this past year.   We received an audit and certificate from Pro-Cert (in Canada) to produce USDA certified products, as well as an audit and certificate from the OFC in Australia.  The products we produced for our client met the % requirements by both certification bodies.   

    It was a huge accomplishment. 

    Our client is also certified organic. So I appreciate your suggestion that we will reveal the information directly to the auditor moving forward.  This makes sense to me.

    Thanks for your input based on your experience!  These responses have given me confidence to respond to my clients. 

    Appreciate your time.
    Candace 

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