The coronavirus pandemic has presented many challenges for those in the consumer packaged goods (CPG) space, and beyond. Supply chain disruptions, rapid migration of point-of-sale from brick-and-mortar outlets to online retail, and overall shifts in consumer preference, eating and cooking habits, and personal safety needs has required many CPG companies to reevaluate and reinvent their products and businesses as a whole.
In the current fast-paced environment, being both innovative and nimble is critical to staying relevant with and accessible to consumers. But, when trying to execute a quick marketing pivot, new product or platform launch, or rebrand, it can be easy to let intellectual property considerations fall by the wayside. Intellectual property can be a major strength, or a major roadblock, if not managed properly.
Here are some pointers to avoid the pitfall of neglecting IP in these situations:
- Conduct IP due diligence
First, make sure that your desired new brand is available for the taking. For many in the CPG space, particularly among food and beverage companies, their brand is their number one most important asset. The last thing your company needs is to invest in a new brand or product that is already being used by someone else. A trademark search and analysis is a useful tool not only to determine whether the mark is available for you to register, but also to identify potential conflicts or even litigation from a brand owner with superior rights in and to the trademark.Similarly, a freedom-to-operate or competitor landscape analysis can identify whether your new product, packaging or process are covered by any existing patents, and if there may be an opportunity to design around or license. Today’s volatile economy could make mitigating risk by being aware of others’ patent rights all the more important to the longevity of your products and business. In fact, some theorize that the rate of patent infringement lawsuits could rise if patent owners look to their intellectual property as a source of revenue in this down economy. As they say, an ounce of prevention is worth a pound of cure.
- Protect your brand and other IP assets
Take the time to protect what you’ve built. You’ve harnessed your creativity, made the investment, and you’ve done your diligence, so don’t squander your assets. If your new brand, product name, or even product packaging design is available, then apply for trademark registration. Federal or state registration provides protection against competitors encroaching on your market and copycats alike.The same goes for patents. Challenging times can often lead to great innovation, and many companies in the CPG space are not taking these times lying down. Patents can protect innovative product formulas, methods of manufacture, extraction or processing, devices, and, yes, even recipes and food products. The patenting process can be expensive, no doubt, and may not be right for every business, but it is an option that should be evaluated. Patents can add value to your business’s net worth, can provide opportunities for strategic partnerships, and give you the power to prevent others from appropriating your invention.Trade secret protection is also an important tool, particularly for proprietary recipes or manufacturing processes that are capable of being kept secret. But the devil is in the details, and the preparation your company takes and procedures it implements to maintain that secrecy are critical to whether that asset will hold up as a trade secret in court.
- Avoid risky product claims
Be conservative with any product claims. Many in the industry have reimagined and reworked messaging to target immune health, stress reduction, and overall wellness, drawing on consumer concerns during the pandemic. However the U.S. Food and Drug Administration and the Federal Trade Commission continue to issue warning letters to firms for selling products with claims to prevent, treat, mitigate, diagnose or cure COVID-19. In particular, FDA has warned companies making claims that their product can boost or support immunity or immune health.
- Police your IP in online retail
Be diligent about monitoring and addressing trademark infringement across e-commerce platforms. Many e-commerce sites, and Alibaba in particular, have seen a spike in sales due to the COVID-19 pandemic. It follows that third party infringers have also been hard at work to divert and confuse consumers by either engaging in unauthorized use of a trademark, or selling counterfeit goods. For registered trademarks, consider establishing a storefront on e-commerce sites such as Amazon, Alibaba, and eBay using methods like the Amazon Brand Registry. This type of seller storefront allows brand owners to market their brands and establish consumer recognition, but also allows brand owners to curb infringement and unauthorized sales on the e-commerce sites. Brand owners also have the option of submitting takedown requests on various e-commerce sites, which effectively removes infringing product listings that facilitate unauthorized sales. Alibaba’s Intellectual Property Protection Platform, for example, provides a streamlined process where rights owners can initiate the takedown process by uploading proof of valid trademark rights, patent rights and/or copyrights and submit a complaint. Also consider whether your distribution agreements or authorized dealer program needs a refresh based on the evolving nature of the sale of retail goods towards online sales.
Keeping these intellectual property considerations in mind when adapting your business and products in these changing times can mitigate risk of dispute, and also protect the your valuable brand and business assets for the future.