Regulatory Compliance and IPR in Food Processing and Manufacturing

December 6, 2023

Regulatory Compliance and IPR in Food Processing and Manufacturing

This article has been compiled by Mr. Saurabh Tripathi a 1st year law student of Lloyd Law College Greater Noida Uttar Pradesh.

Abstract –

The food industry has grown to be the largest industry in the world thanks to its extensive engagement in and influence on a number of industries, including farming, agriculture, production, packaging, distribution, retail, and catering. It should come as no surprise that it has also grown to be one of the most competitive sectors, with thousands of companies striving to outwit one another to get an advantage over their competitors. To do this, food firms invest a lot of money in developing and promoting distinctive brands and are increasingly turning to intellectual property (IP) protection as a means of establishing or maintaining their leadership in the industry. IP provides a wide range of tools that can help businesses stand apart from the competitors. Scientific research and commercial studies demonstrate that package innovation directly affects consumers’ purchase decisions, with some products being bought more frequently only because of the packaging’s color, shape, or markings. In the meantime, start-ups, creative businesspeople, and chefs all around the world are increasingly combining science and modern technologies to redefine this sector. Finding a differentiator in a field that is becoming more and more competitive, where the distinctions between original ideas and copies are frequently blurred, is crucial. Intellectual property might be the solution.

Introduction- Food and drink companies face a multitude of challenges in their quest to attract and retain customers. In the search for a competitive edge, companies invest heavily in research and innovation in order to produce items with the requisite taste, mouthfeel, appearance and nutritional value whilst simultaneously controlling production costs. In addition, there is the added pressure of changing consumer trends, such as the rise in vegetarianism and veganism, alcohol-free drinks, and healthier versions of comfort foods, whilst meeting new governmental policies and requirements: quite the raw deal.

The food industry is one of the most important industries in the world economy. Almost 10 percent of total employment is based on the food industry. The food industry has total sales of USD 1.4 trillion. In such a large economic sector, many brands stand robust with their unique products, taste, packaging ideas, and marketing strategies.

Any idea that comes to a person’s mind concerning a type of food production is a freely available Intellectual Property (IP) unless and until it gets protected. Anyone can steal this idea and start trading in the same product. Also, a complaint cannot be filed unless the IP is registered with proper documentation.

Intellectual Property Protection can safeguard many things right from the foremost step of manufacturing, i.e., production of ingredients, creation of recipes, to the last steps such as labelling, marketing, and branding of the final product. It allows the creator to protect his or her idea. IP protection in the food industry includes Trademarks, Copyright, Industrial Designs, Patents, and Trade Secrets. The ideal example of how much Intellectual Property Rights (IPRs) can be worth is the Coca-Cola company. The most valuable property of Coca-Cola is its trademark. In 2001, the Coca-Cola trademark was worth 68.9 billion, and today, it stands at USD 120 billion. Also, the Coca-Cola recipe is protected as a trade secret, only known to select employees. It has been kept in a purpose-built vault within the company’s headquarters in Atlanta. The recipe has been treated as a trade secret for over 100 years. The most significant feature of the legal protection for IP is that it transforms intangible assets into exclusive property rights. In short, IP protection makes intangible assets a bit more tangible by turning them into valuable, exclusive assets.

The food and beverage industry is exceedingly dependent on the value of the brand and needs the protection of the IP created. It allows consumers to choose the refreshments or foods they want. The consumer knows that he is buying a drink with the label ‘Coca-Cola,’ he is purchasing a carbonated non-alcoholic beverage. Trademarks allow consumers to make choices easier. They do not need to read the ingredients on the bottle every time they make a decision. The trademark informs consumers directly about the commercial origin of the drink, its substance, value, and use.

Intellectual Property Protection can safeguard many things right from the foremost step of manufacturing, i.e., production of ingredients, creation of recipes, to the last steps such as labeling, marketing, and branding of the final product. It allows the creator to protect his or her idea. IP protection in the food industry includes Trademarks, Copyright, Industrial Designs, Patents, and Trade Secrets. The ideal example of how much Intellectual Property Rights (IPRs) can be worth is the Coca-Cola company. The most valuable property of Coca-Cola is its trademark. In 2001, the Coca-Cola trademark was worth 68.9 billion, and today, it stands at USD 120 billion. Also, the Coca-Cola recipe is protected as a trade secret, only known to select employees. It has been kept in a purpose-built vault within the company’s headquarters in Atlanta. The recipe has been treated as a trade secret for over 100 years. The most significant feature of the legal protection for IP is that it transforms intangible assets into exclusive property rights. In short, IP protection makes intangible assets a bit more tangible by turning them into valuable, exclusive assets.

Trademarks

A brand is the prime component of a food company, food product, or a restaurant’s success. A trademark is a legally protected word, name, design, logo, or any other symbol of a product or business. For instance, ‘Oreo’ is a trademarked product name. It means that no one else can use the name ‘Oreo’ to sell his or her cookies. A trademark can be obtained for a food product, dish name, logos, slogans, layout, décor, restaurant, and chef’s name. Nusret Gökçe (popularly known as ‘Salt Bae’) succeeded in registering a motion trademark for a video of him sprinkling salt over the meat, which went viral in 2017.

Trademark Registration can also increase the restaurant/brand’s sale value and facilitate the licensing of the trademark. Registration is essential for franchising. If international expansion is sought in the future, an entity should also consider whether its trademarks are already being used or otherwise ‘registrable’ in foreign jurisdictions.

Copyright

A copyright is an exclusive and assignable legal right given to the creator of original, artistic work for the use and distribution of the artistic work for a limited period. Copyright is considered to be a territorial right, which means that it does not extend beyond the territory of the specific jurisdiction. Copyright does not protect simply utilitarian articles, ideas, facts, or formulas. It protects the expression of ideas in a tangible form. Since food is a useful article, Copyright Law will apply only if the food incorporates highly creative features that are separable (either physically or conceptually) from the food’s utilitarian features.

In the food industry, chefs sometimes borrow and build upon ideas from others. Appropriately applied, IP law is flexible enough to shield highly creative food designs from substantial copying. Copyright Registration is not mandatory but imperative because it serves as a timestamp of the date of creation of the work. A person who, without permission, makes a derivative food design that is substantially similar to another’s copyright-protected food design or other work could be at risk for Copyright Infringement claims.

The typographical arrangement of the recipe book could be protected, but this protection is narrow and would only prevent specific acts such scanning or photocopying the recipe book pages without permission.

IP protection for the plating of food has also become a popular subject. Some critics recommend that plating should be protected as form of trade dress if it has earned a sufficient reputation to indicate the source of the dish. Others opine that plating, if original, may be protected by copyright as an artistic work. This may need clarification from the judicial authorities as to whether plating is in a sufficiently “fixed” form to receive Copyright Protection, as it has theoretically been required that a work be in a material form that is permanent.

Patents

In contrast to copyright, which protects the expression of an idea, patents can protect ideas themselves. While recipes are patentable in theory, it can be arduous in practice to overcome the challenges of proving novelty and inventiveness when applying for a patent. The applicant would need to show that the recipe has not been used by anyone else anywhere. If novelty is established, the next challenge is to demonstrate that the recipe would not have been obvious to a person skilled in the art of food creation.

In the food industry, a patent can be obtained on a novel and non-obvious recipe or cooking technique. Patents can also be obtained for a novel food processing strategy. Furthermore, Patent Rights can be used to protect new ideas, which arise from the Research and Development departments in the food industry. For instance, the meat substitute market has been undergoing explosive growth in recent years, and inventors are quickly applying to protect their food products. California-based company, Impossible Foods has several European Patents for its plant-based food products, which include a plant-based cheese. The food and beverage sector is one of the biggest manufacturing sectors, and the industry invests deeply in R&D. Many food industries overlook the chance to patent features of their food products or specialized manufacturing processes. Food preparation processes may potentially be patentable if they are novel, useful, and not obvious.

Industrial Designs

Industrial Design Protection is provided for the shape, configuration, surface pattern, color, or line (or a combination of these), which, when applied to a functional article, produces or increases aesthetics and improves the visual appearance of the design. In the food industry, designs can be found in the packaging (either bottle or the whole package) or shape of the product (for example, Toblerone chocolate bar). Industrial Design Rights are provided for ten years and can be renewed for an additional period of five years. For a design to qualify for the protection, it should be novel, original, non-obvious, and should be visible on a finished functional article.

Registration of one’s design ensures that other entities do not use the same bottle, packaging, or even similar containers. If another entity makes only minor changes in a protected design, but the overall look of the products is similar, such a competitor would infringe the rights of the registered design’s owner. The design should not only be new, but it should also differ from earlier products.

Trade Secrets

A trade secret is business information that derives value from its secrecy. The owner of a trade secret must take all reasonable measures to protect the secrecy. Recipes can be protected as trade secrets. Restaurants, chefs, or brands should consider notifying the recipients of the recipe that the recipe is a trade secret and demand them to sign non-disclosure and non-competition agreements. Franchise agreements will have specific terms in this regard. Restaurants and chefs should also choose at the initial stage who will own any trade secrets in recipes. This kind of protection can be very powerful and can last indefinitely if the recipe is strictly kept confidential and not communicated to third parties.

Conclusion –

In summary, while it remains challenging to protect recipes and food comprehensively using IPRs, it is not impossible. IPRs can play an exceedingly vital role in a business. If used astutely, with the correct kind of IP portfolio management, the brand can reach new heights of success. The manufacturing of products is getting cheaper, becoming close to zero marginal costs. Consumers need novel, unique products with distinct labels and designs. Therefore, a company must first take into account its consumers and products and then invest in the intellectual creation of something new and attractive. The way food is consumed, created, and protected is undergoing a revolution and the current regulatory regime of IPRs must be one that is adhered to by food entrepreneurs everywhere.

RESOURCES-

December 6, 2023