Trade secrets are often the unsung heroes of the intellectual property world. While patents get the spotlight for being official and public, trade secrets quietly power some of the most successful innovations across industries—from food and beverages to pharmaceuticals and advanced manufacturing. One area where trade secrets shine is in proprietary production processes, and a great example of how they can be strategically leveraged is the recent licensing deal between ADM (Archer Daniels Midland) and Cargill.
The ADM & Cargill Deal: A Strategic Use of Process IP
ADM licensed its proprietary enzymatic process for producing rare sugars to Cargill. These rare sugars are increasingly in demand for food and beverage applications due to their potential health benefits and lower caloric impact. The technology is protected not through a patent, but as a trade secret—meaning it’s kept confidential and provides value precisely because it isn’t publicly disclosed.
Through the deal, Cargill received:
- A license to use the proprietary process,
- A technology transfer package,
- And ongoing technical support from ADM.
In exchange, ADM received an upfront payment, and it’s likely they’ll also benefit from Cargill’s scale and market reach as the licensed products go to market.
This deal showcases the many strategic ways companies can use trade secrets—not just to protect their competitive edge, but to actively grow their business through licensing.
What Makes a Proprietary Process Valuable?
A proprietary process is a method that gives your business a competitive or financial advantage. It could be:
- A cost-saving production technique
- A method for improving product quality or consistency
- A unique formula or blending process
- An environmentally friendly or more efficient manufacturing workflow
Unlike patents, which eventually expire and must be disclosed publicly, trade secrets last as long as you keep them confidential. That’s why processes—especially those that are hard to reverse engineer—are often best kept as trade secrets.
In ADM’s case, their enzymatic process allows for a cost-effective and scalable way to produce rare sugars, which would otherwise be too expensive or inefficient to manufacture at commercial volumes. This unique know-how, developed internally, is now creating a new revenue stream through licensing—without giving up ownership or building their own new manufacturing arm.
Strategic Applications of Licensing Proprietary Trade Secret Processes
Licensing a trade secret process isn’t just about monetizing an invention—it’s about strategic growth. Here are some powerful ways you can use this type of licensing to build your business:
- Market Expansion Without Capital Investment
If you’ve developed a process that could be used in different geographic regions or industries, licensing it out allows you to expand into those markets without building new facilities or hiring new teams. Your licensee takes on the investment, while you benefit from royalties or milestone payments.
- Leverage Partner Expertise
Your company might be great at developing technology but not at scaling it up. By licensing your proprietary process to a partner like Cargill—who has the manufacturing capability, distribution, and relationships—you can take your innovation further than you could on your own.
- Create Multiple Revenue Streams
Licensing isn’t just a one-time deal. With smart structuring, you can receive:
- Upfront licensing fees
- Milestone payments as your licensee hits development or production goals
- Royalties based on sales of products using your process
This creates recurring, low-risk revenue while keeping ownership of your intellectual property.
- Accelerate Industry Adoption
If you’ve created a better, safer, or more sustainable way of doing something, licensing it can help your process become an industry standard. This could increase the perceived value of your brand or even allow you to influence regulatory frameworks and standards.
- Bundle with Other IP
A proprietary process can be bundled with other intellectual assets—like a brand name, know-how training, or software—to create a turnkey licensing package. This makes your offering even more attractive and valuable to potential partners.
Protecting and Preparing Your Process for Licensing
Before licensing a trade secret process, it’s essential to have the right protections in place:
- Document the process thoroughly so it can be transferred to a licensee with clarity.
- Use confidentiality agreements (NDAs) before disclosing any proprietary information.
- Create a technology transfer plan that includes training, documentation, and support—just like ADM provided to Cargill.
- Set up a monitoring system to ensure the licensee is complying with terms and using the process as agreed.
Licensing trade secrets requires trust and clarity. But when done right, it opens up powerful growth opportunities—without exposing your IP to unnecessary risk.
Could Your Proprietary Process Be a Licensing Opportunity?
If your business has developed a unique process, even if it’s not patented, it could be a hidden asset just waiting to be monetized. Whether it’s a special way of manufacturing, processing, or producing that gives you a leg up on cost, quality, or speed—you might be sitting on licensing gold.
Let’s explore your options together.
Schedule a short consulting call to discuss how your trade secret process could be turned into a strategic licensing opportunity.
And if you’re looking for more tips, strategies, and real-world examples of using licensing to grow your business, be sure to sign up for our free newsletter at:
Trade secrets aren’t just something to lock away—they’re valuable tools that, when used strategically, can unlock new revenue, partnerships, and growth for your business.
Rand Brenner is an IP professional whose passion is helping inventors, startups, and businesses use licensing to turn their IP into income-producing products, services, and technologies. His decades of experience run the gamut from medical devices to food technology to consumer products. He’s licensed some of the biggest Hollywood entertainment blockbusters, including the Batman Movies (1 and 2) and the number one kid’s action TV show, the Mighty Morphin Power Rangers. Rand speaks about licensing and is a featured speaker at investment conferences, trade shows, colleges, and startup events. His first book, Hidden Wealth: The Money-Making Power of Licensing, was released in 2019 and is available on Amazon.com. He’s also a published writer, and his articles have appeared in several prestigious trade magazines, including The Licensing Journal, Intellectual Property Magazine, and License India.
Working Through a Licensing or Commercialization Challenge?
If you have market-ready intellectual property, a licensing campaign that has stalled, or a business opportunity that may benefit from licensing, a short strategy discussion can help clarify the next step.