Consumer and government attention continues to focus on sugar content bringing new challenges to those in the food and drink industry. In America the FDA has recently announced a new food labelling regime requiring food manufacturers to identify all “added sugars” in their products.[a] It used to be the case that these could be included in the list of “total carbohydrates”, but no more. Of course where America leads Europe is usually quick to follow.
Whilst the present labelling requirements in Europe might not be the same as those across the Atlantic, food and drink manufacturers must still address consumer expectations, as well as comply with current requirements whilst keeping an eye on anticipated future regulatory developments. Indeed, product labelling can impact many of the wider areas of your business – even your Intellectual Property strategy. Get this right and it can give you a crucial competitive advantage. Rebecca Matheson, a technical assistant in GJE’s Life Sciences team discusses the range of factors to consider.
Protecting innovation using patents
The food and drink industry is awash with innovation, which can include new flavouring formulations, new ways to reduce salt, sugar and fat, new ways to increase and improve shelf-life – and a whole host of other things besides. As long as these innovative products or processes are new and deliver unexpected benefits then patent protection may be possible.
If we take the example of a new flavouring formulation, patent protection would enable you to prevent your competitors from making and selling any product which includes that flavouring formulation. This can lead to increased sales, strengthen your bargaining position with suppliers and add value to your business through licensing arrangements. Of course this works both ways. You will also need to check whether third parties already have patents in place which could stop your innovative new product in its tracks.
Even if you decide to seek patent protection, it comes at a price – your invention has to be published. It should come as no surprise therefore that food and drink manufacturers have also relied on trade secrets to protect coveted aspects of their products. Coca Cola’s “secret” formula (“merchandise 7X”), allegedly responsible for its unique taste, is a classic example of this.
The decision of whether to obtain patent protection or to keep your innovation a secret is therefore a complex one.
One question to consider is whether, regardless of your efforts to keep your invention a secret, your competitors are in any way able to reverse engineer (and therefore copy) your invention by analysing your product “off the shelf”. Further, even if it is possible to keep your trade secret truly under wraps, there is the question of whether the financial benefits of patent protection outweigh the cost of obtaining that protection and of having to publish your invention.
But what if the decision is taken out of your hands?
Using patents to beat labelling transparency
In the food and drink sector there is an increasing drive for labelling transparency. Competing EU regulations set stringent measures for disclosing what ingredients are in food or drink products, particularly when additives or E-numbers are concerned.[b] It may be that by complying with these regulations and explaining on the label what ingredients are present, your competitors are able to work out exactly what innovation is behind your product. It is in these scenarios that opting for patent protection can add real value to your business.
Quite apart from the need to balance compliance with EU regulations with your patent strategy, there is also the important consideration of consumer reaction. More and more consumers are taking an interest in what goes in to our food and drink. This is reflected in the food and drink industry making a push towards “clean labels”, the aim of which is to remove “chemical sounding” terms likely to give rise to negative consumer perception and replace them with natural-sounding alternatives.[c] Rosemary extract sounds much more palatable than antioxidants such as butylated hydroxyanisole.
Consumer perception can also affect your branding strategy. Choosing the right name for your product and labelling it in a way that gives customers a positive and healthy impression is also an increasingly important consideration and has a real potential to lift sales.
That’s assuming of course you want to lift sales! Otherwise you could follow the slightly more unorthodox approach pioneered by Mars Foods, and tell your consumers to eat your products no more than once a week, because they are so high in salt, fat and sugar. An unusual strategy from the company behind Dolmio and Uncle Ben’s sauces…[d]
GJE’s attorneys regularly advise food & drink companies on all aspects of patent and trade mark protection. If you would like to discuss any of the issues raised in this article please contact a member of our food & drink sector team.