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    Blog

    Intellectual Property Law: What Nutraceutical Companies Should Know

    Patent protection in a competitive market can give your business an advantage.

    Intellectual Property Law: What Nutraceutical Companies Should Know
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    Rose M. Thiessen, PhD, Partner, Knobbe Martens & Samantha C. Markley, Associate, Knobbe Martens06.13.16
    In an industry overflowing with new products, new formulations and new ideas, understanding the basics of intellectual property law as it relates to nutraceuticals is essential to business success.
     
    Many products in the nutraceuticals industry fall within two categories: known or natural components for new use; and combinations of known or natural components offering enhanced performance compared to that of the individual components. Your intellectual property related to new products can be protected in different ways to offer a competitive advantage. Typically, trademarks and trade secrets are relied upon for protection; however, in certain circumstances patents may provide the optimal protection for your new product.  
     
    Trademarks & ‘Trade Dress’
    Trademarks identify and distinguish the goods and services of one company from those of others, and indicate the source of the goods and services. A trademark may include any word, name, symbol, device or any combination thereof. Common law trademark rights begin to vest as soon as a mark is used. To maximize protection, however, it is best to file a federal trademark application as soon as a company decides which mark it intends to use.
     
    In addition to brand names, logos and slogans, a company may also want to consider taking steps to protect the trade dress of its product and packaging. Trade dress is comprised of those aspects of the commercial impression, or look and feel, of a product that identify the source of the product and distinguish it from others. The goodwill you develop in your company’s name and products can be a potent marketing tool. If consumers associate your brand and trade dress with high quality, they are more likely to be repeat customers, and to try other goods and services your company offers.
     
    Formulas & Methods
    Formulas, methods of manufacture, processes and certain other information that is economically valuable because it is not generally known, may be protectable trade secrets. Trade secrets in the nutraceutical industry may include the exact formulation of a supplement, a method of extracting a natural product, a compilation of supplier, distributor or consumer data, or similar information.
     
    In order to protect a trade secret, reasonable measures must be taken to maintain its secrecy. Once the information is made public, it is no longer a trade secret. Trade secrets can be protected by compartmentalizing functions within the business (e.g., sourcing, manufacturing, sales and distribution) and ensuring information is only provided on a “need to know basis” to your employees. Make sure that your employees, suppliers and distributers safeguard your information by securing non-disclosure agreements with all parties with whom you do business.
     
    By safeguarding your investment in your trademarks and trade secrets, you may gain an edge over your competitors. Typically, they will not, however, enable you to prevent someone from marketing a competing product. Patents can provide this advantage. The owner of a U.S. patent is granted the right to exclude others from making, using, offering for sale, selling or importing the patented invention in the U.S. Similar patent rights can be pursued in other countries through each country’s patent office. In exchange for these benefits, the patent owner makes a public disclosure of the invention.
     
    Utility & Use
    Utility patents protect new and useful processes, articles of manufacture, compositions of matter and any new and useful improvement thereof. The components of nutraceutical formulations are typically substances that are known.  The individual components would not be considered new, and as such they would not be eligible for patent protection. If the known component is recommended for a new use, however, it may be possible to secure patent coverage for the new method of using the component.
     
    In certain circumstances, it may even be possible to secure protection for known uses. One example would be a formulation for a known component with a known use, in combination with an ingredient that unexpectedly increases the efficacy of the known component. If the combination is new, and unexpected results are observed for the new combination, then patent protection may be possible.
     
    Examples of other protectable inventions include a new method of administering or taking a supplement (e.g., taking a particular dose of the supplement at certain time intervals for an unexpected increase in efficacy), or a new and useful feature in the delivery system of the supplement (e.g., delivery via a liquid formulation rather than a tablet). The method of manufacturing could be new and useful, particularly if the method includes a new purification step or method of producing the supplement. Similarly, the method of packaging could be protectable if it includes a new and useful step, such as a step to increase the efficiency of the process or the shelf-life of the product. Functional aspects of the packaging may be protectable as well. 
     

    Rose Thiessen
    Case Law
    In a 2014 case, Alice Corp. v. CLS Bank International, the U.S. Supreme Court provided the analysis for deciding what constitutes patentable inventions. First, the Court must decide if the subject matter of the invention is drawn from a law of nature, natural phenomenon or abstract idea. If the answer is yes, the Court must then decide if the subject matter includes an “inventive concept” sufficient to transform the idea into patent-eligible subject matter. If the answer is no, the subject matter is considered ineligible for patent protection.
     
    As an example, consider a patent claim reciting a specific ratio of Compound A, Compound B and Compound C, all of which are nature-based products, but do not occur together in nature. Compound A is sweet with a bitter aftertaste, Compound B is flavorless, and Compound C has a mild umami flavor. Mixing these compounds does not change the structures of the components or produce a chemical reaction between the components, however, the flavor profile of the combination (sweet and lacking bitterness) is different than the mere sum of the flavors of the individual components.
     

    Samantha Markley
    The U.S. Patent and Trademark Office (USPTO) indicated that such a combination is patent-eligible. Further, the USPTO has stated that "it is particularly critical to address the combination of additional elements, because while individually-viewed elements may not appear to add significantly more, those additional elements when viewed in combination may amount to significantly more…” This is significant in the context of the nutraceutical industry because it indicates that subject matter based on natural products may be patentable if “something more” is included in the claims.
     
    Another decision of importance to the nutraceuticals industry is the December 2015 case, Ariosa Diagnostics, Inc. v. Sequenom, Inc. In that case, the Court of Appeals for the Federal Circuit found certain diagnostic method claims to be patent-ineligible subject matter. The court stated that where “claims of a method patent are directed to an application that starts and ends with a naturally occurring phenomenon, the patent fails to disclose patent-eligible subject matter if the methods themselves are conventional, routine and well understood applications in the art.” Accordingly, this ruling could have an effect on method patents in the nutraceuticals industry if they involve “routine and conventional” techniques. The U.S. Supreme Court is currently deciding whether or not to review this decision.  
     
    In view of the shifting legal landscape with respect to patentable inventions, it is important to seek out advice of patent counsel before making the decision to pursue or forego patent protection for your nutraceutical inventions.


    Rose Thiessen, PhD, is a partner in the San Diego office of leading intellectual property law firm Knobbe Martens, where she focuses on patent prosecution and licensing for clients in the pharmaceutical, nutraceutical and cosmetics industries as well as the medical device field. Samantha Markley, an associate in Knobbe Martens’ San Diego office, focuses on intellectual property licensing, trademark enforcement, and all aspects of aspects of domestic and international trademark, unfair competition, and copyright matters. For more information: http://knobbe.com
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