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Food and Beverage
Protection of IP in the Food and Beverage Industry

Protecting Intellectual Property (IP) in the food and beverage industry covers everything ranging from producing the ingredients, creation of recipes, labeling, and going all the way to marketing and branding of the finished or final products. Various forms of IP including, trademarks, patents, industrial designs, and trade secrets are relevant to the food and beverage sector and can prove to be extremely beneficial to the companies of this industry when they become successful.

TRADEMARKS

A trademark could be any word, phrase, logo, symbol, or a combination of these which uniquely identifies and further distinguishes the source of origin of the goods and services of one party from another. There are various roles that a trademark plays in a company or an organization, and all of them are crucial in leading to the success of any business. In the food and beverage industry, a trademark is a valuable and significant asset. It helps the customers in choosing the food products according to their needs. For instance, the customers are aware of the fact that if they are purchasing a drink with the label ‘Coca-Cola,’ then they are buying a carbonated non-alcoholic beverage.  Similarly, when the customers come across the label of ‘Berrywhite,’ they know that it is an organic drink made from berries and contains fewer additives. Moreover, the customers don’t need to read the ingredients every time they buy any food product.

Trademarks provide all the essential information about a product to the customers, including its commercial origin, value, and use. Once a trademark becomes well-known, the owner can not only prevent others from using the trademark but can also restrict them from using similar marks. For example, in 1972, Coca-Cola had sued Gemini Rising Inc., for selling posters with “Enjoy Cocaine” which were way too similar to the Coca-Cola trademark.

INDUSTRIAL DESIGNS

Industrial Designs protect the overall appearance of a product. In the food and beverage industry, industrial designs apply to the packaging of the product (either bottle or the entire packaging), and the shape of the product like that of a Toblerone chocolate bar. Protection of industrial designs not only prevents other companies from using the same packaging or bottle but also restricts them from using a similar container or packaging. If another person or company comes up with a product having minor changes making it appear similar to your product, such a competitor would be infringing your Intellectual Property Rights (IPR). Therefore, protecting industrial designs goes beyond direct copying. Additionally, any person or company planning to launch a new design of a bottle or a chocolate bar must ensure that the design is unique, novel, and possesses an individual character.

PATENTS

Patents are the exclusive forms of IP granted for the inventions and discoveries in all fields of scientific and human endeavors. It is very likely for a new food mixture or a recipe of a beverage to seek Patent Protection in the food and beverage sector. However, the food or drink must be new, non-obvious, and useful, and adequately explained in the Patent Application. A Recipe falls under patentable subject-matter and is protectable either by defining it as a new and useful process or as a composition of matter.  For instance, a soft drink is a composition of matter, while the steps involved in making it can be patented as a new process. The monopoly of patent rights is the broadest among all other IP Rights. If another company slightly modifies a recipe by either adding or removing an ingredient, it is most likely to infringe your rights, and you can take legal action against the competitor offering such a product.

TRADE SECRETS

Another form of IP actively used in this industry is trade secrets. A trade secret is any process, formula, or practice, which is not generally or reasonably known to others. Usually used to protect the recipes of food items and beverages, trade secrets offer an economic advantage to the business owners in the food sector. The most common example of a beverage recipe protected by trade secrets is of Coca-Cola, invented in 1886 by Dr. John S. Pemberton. However, nowadays, it has become much harder to keep a trade secret as a good chemist is capable of disclosing the ingredients of any drink or food item by doing analysis and running a few tests. Therefore, companies in this sector should invest in higher IP Protection by filing a Patent Application for the same.

BOTTOM LINE

IP Rights play a crucial role in the food and beverage industry if the owners wisely make decisions in managing their IP Portfolio. Since the manufacturing and preparation of food items is getting cheaper day by day, going close to zero marginal costs, the consumers must be provided with unique and new products having individual labels and designs. Therefore, the owners must consider the needs of their customers and then invest in the intellectual creation of novel and attractive food products.

Intellectual Property Rights
Licensing of Intellectual Property Rights (IPR): Business Perspective

In today’s highly competitive business environment, a person may be interested in starting a new business, expanding or extending an already existing business, or improving the business reputation in the market. In most cases, licensing of Intellectual Property Rights (IPR) can prove to be effective in achieving such business goals.

A licensing agreement refers to a partnership agreement between the owner of intellectual property rights, i.e., the licensor, and the person who is authorized to utilize such rights, i.e., the licensee, in exchange for an agreed-upon payment, i.e., royalty or fee. Licensing agreements are of the following types:

  1. Copyright Licensing Agreement
  2. Trademark Licensing and Franchising Agreement
  3. Technology Licensing Agreement

In general, some or all of these agreements form part of a single contract as the licensing agreements involve many rights and not just a single IPR. Being the owner or licensor of IP, a person can ensure a steady stream of additional income; and as a licensee, a person can sell, manufacture, import, distribute, or market the products and services related to the business, which he wouldn’t have been able to do otherwise.

In terms of the international context, a licensing agreement is possible only if the owner wishes to license an intellectual property right that is protected in the other country as well. Moreover, if the same IP Right is not a part of the other country’s laws and regulations, then the owner also has no legal rights to put any restriction over its use by anyone else.

COPYRIGHT LICENSING AGREEMENT

If a brand or a business entity is interested in:

  1. Manufacturing, marketing, or distributing the original literary or artistic works of the creators, or
  2. Expanding or extending their already existing market for the literary and artistic works of their creators,

then they may consider Copyright License Agreements. Sometimes, owners find it arduous to manage their Intellectual Property Rights and have usually formed collective management organizations for representing and managing the rights on their behalf. Therefore, if a person wishes to acquire these rights, he or she may have to reach to the appropriate collective management organization that will be authorized to license the rights of their members.

TRADEMARK LICENSING AND FRANCHISING AGREEMENT

If a brand or a business entity is interested in:

  1. Marketing or selling a product, or service whose trademark is owned by others, or
  2. Extending or expanding their already existing market for a product or service for which their business owns the rights conferred by a trademark,

they may consider a Trademark Licensing or Franchising Agreement.

A trademark helps in distinguishing the products or services of one enterprise from others by identifying their source of origin and making an implied reference to the quality and brand name. Therefore, in the case of a Trademark Licensing Agreement, the owner is highly advised to maintain a close connection with the licensee for ensuring that quality standards are maintained and the consumers aren’t deceived.

Through a Trademark Franchising Agreement, the owner of a business or brand entity who has already achieved some success corresponding to the trademark may collaborate with another enterprise (franchisee) who will bring in the expertise of their own or financial resources to provide the products or services directly to the consumers.

TECHNOLOGY LICENSING AGREEMENT

A technology licensing agreement consists of the agreed-upon terms and conditions using which the licensor authorizes the licensee to use the technology.

If a business entity is interested in improving the quality of a product or service or manufacturing a new product or service by using the rights owned by another enterprise in the form of a patent or utility model, then acquiring such rights through a technology licensing agreement can prove to be fruitful. Additionally, if a business wishes to extend its already existing market for a product or service for which they own the rights in the form of patent or utility model, then authorizing any other enterprise to use the product or service with the help of a technology licensing agreement can be the right solution.

BOTTOM LINE

Licensing the intellectual property to a third party can indeed prove to be very beneficial for the owners who don’t have sufficient financial and technical knowledge to explore the diverse applications of their inventions. However, the owners or licensors must be aware of the fact that not all licensing agreements lead to profitable and desired outcomes. Therefore, before signing any licensing agreement, the owners must ensure that the party with which they are working has the resources and commitment to take their IP to another level.

 

Intellectual Property Rights
Intellectual Property Rights – Key to Success of Startups

In today’s global innovation economy, Intellectual Property Rights (IPR) are a valuable asset for startups as they drive creativity leading to better delivery of products and services for their consumers. While initially, all startups have indispensable demands and priorities, protection of Intellectual Property (IP) often gets neglected, mostly because of the high costs involved. However, Intellectual Property is a crucial asset for a startup on its journey to success.

WHY INTELLECTUAL PROPERTY IS CRUCIAL FOR STARTUPS?

Conducting a preliminary search for IP Portfolio Management Services like Patents, Trademarks, Copyrights, Industrial Designs, Domain Names, and so forth, can give startups an idea about the possibility of success of their underlying business model. For instance, if a similar or identical trademark, patent, or design forming the key basis of their business model is already registered, then startups are in a better position to assess their business model and make modifications, if required, to avoid any future conflicts.

The simplest way in which a startup can succeed by giving competition to its rivals is by patenting its inventions and ideas. When a startup patents its ideas, its valuation increases, and the innovators are adequately rewarded. Startups can also take commercial advantage of its patentable ideas. Furthermore, investors are likely to acquire a startup whose Intellectual Property Rights are well protected. Hence, patentable ideas are vital to the success of startups and are also prevented from being copied by rival entities.

By protecting their IP assets, startups can prevent themselves from future conflicts and litigations. Intellectual Property Rights also create legal security for startups and allow them to channel their resources towards business development. A well-planned strategy for IP protection can successfully protect the business models of startups from being copied.

Moving ahead of the legal aspects, IP is also an intangible asset that can be monetized and can offer aid in challenging times. For monetizing IP, there are various avenues like selling, franchising, or earning royalties from IP assets, which can give startups an edge in the competitive market. By implementing strong IP protection schemes, startups will find themselves in better positions with respect to pricing their goods and services. The strength of the startups’ IP portfolio management services also influences the investor’s decisions while raising funds.

HOW STARTUPS CAN STRATEGIZE TO PROTECT THEIR IPR?

Intellectual Property Rights protect several aspects of a startup including its name, logo, inventions, designs, advertisements, goods, services, and so forth. Therefore, the following strategies must be effectively adopted by startups to protect their IP Rights.

PRIORITIZING INTELLECTUAL PROPERTY PROTECTION:

Startups must make an effort to evaluate and give utmost priority to the IP Rights involved in their business model at the very initial stage. Failing to do so will create a wide range of problems for them, especially during the stage of negotiations with investors.

REGISTERING INTELLECTUAL PROPERTY RIGHTS:

As registered Intellectual Property Rights carry a greater value, prevent unauthorized use, and act as evidence of use before courts and enforcement agencies, startups must register their IP rights to safeguard their brand’s entity and reputation.

DUE DILIGENCE OF INTELLECTUAL PROPERTY RIGHTS:

It is necessary for startups to ensure that they aren’t violating the IP Rights of any company or an individual to prevent any legal action against them. Therefore, they must be careful with their IP decisions from the very beginning and must conduct due diligence of their IR Rights.

IMPLEMENTING CLEAR AND EFFECTIVE IP POLICIES:

Startups must have an Intellectual Property policy for maintaining their IP rights in the long term to ensure no disputes among their active members, which is one of the main concerns for their failure.

INTELLECTUAL PROPERTY AGREEMENTS:

Having proper documentation in the form of official agreements can make a huge difference in the success or failure of startups. Startups need to ensure that their IP is protected via a proper agreement between them and the third-party. It is highly advisable for startups to enter into licensing or user agreements to secure their IP Rights.

kashish
Intellectual Property Rights for an Emerging Africa

Africa, both in terms of land and population, is the second largest continent in the world with 54 sovereign countries. With a growing labor force and a large consumer market, Africa holds the promise of significant further growth opportunities. Africa’s wide spectrum of cultural, ethnic, geographic, and economic differences has a great tradition of innovation and creativity. Although the main focus in Africa has always been to establish and implement basic Intellectual Property (IP) infrastructure, it has often struggled to realize its full economic potential, and a myriad of challenges need to be addressed. Nevertheless, African economies are now adding value to their creative resources via the IP system to work in support of their economic objectives. It is a matter of fact that yes; innovation and Intellectual Property Rights are slowly but definitely rising up the African policy agenda.

INTELLECTUAL PROPERTY INFRASTRUCTURE IN AFRICA

There are two regional organizations promoting Intellectual Property Rights in Africa. One of them is the African Regional Intellectual Property Organization (ARIPO) which is based in Harare in Zimbabwe, and the other is the Organisation Africaine de la Propriété Intellectuelle (OAPI) which has its headquarters in Yaoundé in Cameroon. ARIPO has a total of 19 member countries mostly from the English speaking part of Africa, and OAPI has a total of 17 member countries mostly from the French-speaking part of Africa. Both ARIPO and OAPI together cover 36 countries in Africa out of 54, however, Egypt, Nigeria, and South Africa are not their members, which are three of the largest African economies. Both of these organizations work and operate differently. Applications granted by OAPI have a unitary effect in all its member states but this is not the situation in ARIPO, as in their case all member states must sign, and give formal consent to implement protocols.

PAN-AFRICAN INTELLECTUAL PROPERTY ORGANISATION (PAIPO)

In 2013, the African Union (AU) decided to envisage the creation of PAIPO to complement and supplement the regional organizations of ARIPO and OAPI with the following objectives in mind:

 

  1. Promoting harmonization of Intellectual Property Rights among the member states of AU.
  2. Conducting activities to assist member states in using their IP systems efficiently and actively fighting against the issues of counterfeiting and piracy.
  3. Establishing African common positions on IP issues related to genetic resources, traditional knowledge, and geographic indicators.
  4. Helping to establish and lead African IP positions in international IP negotiations.

As the objectives of PAIPO are not very clear knowing the fact that two regional IP organizations already existed in Africa, this project was not cited in the African Ministerial Conference held in November 2015. This conference stressed on enhancing innovative capacities with dynamic Intellectual Property Rights propelling creativity, and commercialization of Intellectual Property for sustainable growth, development, and well-being of Africans.

CO-OPERATION WITH WORLD INTELLECTUAL PROPERTY ORGANIZATION

Africa’s co-operation with the World Intellectual Property Organization (WIPO) replaced the project of establishing a new IP agency. The declaration calls upon the WIPO to strengthen its technical assistance which aims at supporting the establishment and implementation of national Intellectual Property based on innovation policies, and in promoting joint initiatives with African Union Commission, regional organizations of ARIPO and OAPI. This co-operation between Africa and WTO will also provide sustainable, cost-effective, and high-quality management, enforcement, and protection of IP Rights to researchers and innovators in Africa.

VALIDATION AGREEMENT WITH THE EUROPEAN PATENT OFFICE

A new way of integrating the African markets in the invention world economy was proposed by the European Patent Office (EPO) with the validation agreement. This validation agreement permits the owner of the European Patent granted by the EPO to extend it to a territory which is not a member of the EPO but bound by the validation agreement. The first agreement was signed with Morocco in 2010 and came into force in 2015, and the second agreement was signed with Tunisia in 2014 but has not yet been in force.

Under these agreements, the granted European Patents will not be examined again in the national patent offices’ leading to a larger scope for foreign investments in African countries and invention licensing.

AFRICA’S IP OBSTACLES AND CHALLENGES

African economies fall short in the legal enforcement of IP Rights, which results in high online piracy, and an increase in the issue of counterfeit goods. Without this legal enforcement, manufacturers and developers in Africa may not feel much motivated to innovate.

Secondly, not enough people in Africa are registering their IP for protection. For instance, in South Africa, there is an average of 900 Patent Applications filed every month, however, 60 to 70 percent of these applications are filed by non-South African firms and companies.

In Africa, the current local and regional systems to register IP are inaccessible, time-consuming, and very difficult to approach or use.

SOLUTIONS TO IP CHALLENGES IN AFRICA

Despite major flaws and challenges faced by Africa in their Intellectual Property System, African economies are still focused and determined to improve their IP policies and frameworks. For instance, South Africa’s National Treasury in its 2017 Budget Review announced that it would be relaxing IP exchange controls which would make it easier for startups to expand their businesses and seek funding outside South Africa.

As Africa is very rich in traditional knowledge, Kenya also established the Traditional Knowledge and Cultural Expressions Act in 2016 enabling African communities to control, and seek profit from the use of significant cultural knowledge and expressions.

African government and authorities have realized the importance of regularly viewing and updating laws to deal with the current challenges faced by the IP Rights owners. Of course, every law has its own cautions, complications, and counter-arguments; Africa is now at the beginning of a new era in the domain of creativity and innovation, and will probably see some big changes in the IP system in the coming years.