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    Columns

    Safeguarding Your Intellectual Property for Nutraceuticals

    Securing patents and trademarks will help protect your brand and lead to commercial success.

    Safeguarding Your Intellectual Property for Nutraceuticals
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    By Gregory Stephens, Windrose Partners06.01.18
    When considering intellectual property (IP), patents often come to mind first. Certainly, they are important components of IP; however, there’s more. IP also includes trademarks, copyrights, and trade secrets. People often confuse patents and trademarks. Even though they are both intellectual property rights and have some similarities, they are very different. In this month’s column, I’ll focus on trademarks and how they are a valuable component of an IP portfolio.

    Trademark Basics
    Trademarks are highly valuable assets. According to one recent estimate, trademarks account for, on average, one-third of corporate value. As a matter of fact, the world’s most valuable brand, Google, was recently estimated to be worth more than $245 billion.

    Many nutraceuticals companies have done a great job at utilizing trademarks to differentiate ingredients and products effectively. An early example is Kemin Industries’ FloraGLO Lutein (carotenoid composition of lutein and zeaxanthin) as a branded supplement and food ingredient. After obtaining a trademark on the ingredient, Kemin effectively negotiated with marketers of products to include the FloraGLO logo on product labels and promotional materials providing Kemin a competitive advantage as it invested in developing its eye-health franchise. Other more visible and highly effective trademarks on finished products include Airborne and Ester-C.

    Businesses typically use indicia to distinguish their products or services from  their competitors’. The indicia may be used on a product or in connection with the service, or advertised as such. Used in this way, the indicia is a trademark or a service mark. The public learns to recognize products and services as originating from a particular source, the origin of those goods and services. 

    A trademark or service mark may include a word, name, symbol, letter, number, geometrical shape, color, sound, fragrance, moving image, device, or any combination, used or intended to be used to identify and distinguish the goods/services of one seller or provider from those of others, and to indicate the source of the goods/services.

    Registering trademarks with the USPTO is advisable as it provides a number of benefits over common law use. For example, use of the ® symbol provides evidence of validity for the registered mark, a constructive notice of a claim of ownership, and jurisdiction in Federal Courts for trademark infringement.

    To be registerable, the trademark should not be a generic term for the goods or services it is used in connection with. For example, the term “apple” if used in connection with apples, is not registerable because it is a generic term. Strong trademarks are fanciful or arbitrary. The term “apple” when used in connection with computers is a fanciful or arbitrary term and not indicative of the products and therefore is registerable.

    SAMe Case Study
    The U.S. introduction of SAMe (S-Adenosyl-L-Methionine) is an example of using a generic term in branding a functional ingredient. It was broadly launched in the U.S. dietary supplement market in 1999 by BASF. The marketing program included a public awareness campaign through a major New York public relations agency backed by a significant budget. The program was successful and “SAMe” made the Oprah show, and major league baseball slugger Sammy Sosa became a spokesman. Along with other PR efforts, product sales took off. The campaign was very effective in building public awareness of SAMe; however, BASF was unable to protect the term SAMe with a trademark because SAMe is an abbreviation for S-Adenosyl-L-Methionine. It wasn’t long before the U.S. market was flooded by lower-cost SAMe products, many of which did not adhere to the high quality standards of BASF. Thus, sales of the BASF launched product rapidly declined. The company may have been better served by branding the product with a registrable trademark before investing in a significant consumer awareness program.

    Further, suggestive or descriptive marks provide little protection and are often difficult to register. For instance, products branded with the word “omega” may present similar challenges for current marketers for products containing omega-3 fatty acids.

    The symbol “TM” (trademark) or “SM” (service mark) can be used at any time to alert the public to your common law trademarks for goods or services. It is important to know that one does not need to file an application with the USPTO to use “TM”; however, the symbol “®” can only be used after the USPTO actually registers a mark, and not while an application is pending. 

    In addition to trademarks, consider obtaining trade dress protection. The term “trade dress” refers to a design, packaging, color, or other distinguishing and non-functional element of physical appearance of a product. Examples of trade dress include the shape of the Coca-Cola bottle or even the shape of a classic Ferrari sports car. Trade dress protection can be obtained in the same way as a trademark protection.

    Notes on Patents
    Simply put, a patent is a contract with a government which affords to the patent owner the right to exclude others from making, using, offering for sale, selling, or importing the invention (as defined by the claims of a patent). Patent rights have a limit on lifespan, geographic area, and the scope of claim coverage.

    Unlike a trademark, which has unlimited lifespan (subject to renewals), the duration term of a patent lasts for a maximum period of 20 years from the filing date, provided the patent is “maintained” for the entire period by timely payment of maintenance fees. Upon expiration of a patent term, the patent is in the public domain and may be used freely by anyone.

    Both patents and trademarks are limited to the geographic area of the country of issuance and are available to be used by anyone in countries in which they are not registered. It’s worth mentioning that a common mistake with patents involves equating a published international application filed as a Patent Cooperation Treaty (PCT) with an international patent. There is no such thing as an international patent; publication of a patent application does not qualify as a patent either.

    The conditions for patentability, or what can be patented, include appropriate subject matter, usefulness, novelty and non-obviousness. The appropriate subject is stated as “Anything under the sun that is made by man.” That would include any new and useful composition of matter, device, method of manufacture, method of use, or any new and useful improvement of the above.

    To be considered useful, the invention must provide some immediate benefit to the public. An inoperative invention is not a useful invention; however, the mere identification of the physiological activity of a compound that is relevant to an asserted nutraceutical use provides an “immediate benefit to the public” and satisfies the utility requirement.

    To be novel, the invention must not previously be known or used by others. This includes items that may have been previously patented or simply described in a printed publication.

    The final condition, non-obvious, means the invention must not be an obvious modification of a known item or process. This obviousness criterion is evaluated from the perspective of a hypothetical person of ordinary skill in the prior art.

    Trade Secrets
    There are certain situations when an invention may be better protected as a trade secret. Keep in mind that when filing for a patent application, all aspects of the invention must be disclosed. There are times when one may not wish to share this information openly. For instance, if the invention is difficult to reverse engineer, or if it has a short lifetime in the marketplace. In such situations, protecting the technology as a trade secret may be more appropriate. Just keep in mind that trade secrets may not be patented by their owners if in public use for more than one year—yet they may be patented by someone else.

    As your product or service becomes successful, the trademark itself starts to develop commercial value. Marketing partners and business investors will be inquiring whether you have obtained the appropriate legal trademark protection to secure your brand. 


    Gregory Stephens
    Windrose Partners

    Greg Stephens is president of Windrose Partners, a company serving clients in the the dietary supplement, functional food and natural product industries. Formerly vice president of strategic consulting with The Natural Marketing Institute (NMI) and Vice President of Sales and Marketing for Nurture, Inc (OatVantage), he has 25 years of specialized expertise in the nutritional and pharmaceutical industries. His prior experience includes a progressive series of senior management positions with Abbott Nutrition (Ross Products Division of Abbott Laboratories), including development of global nutrition strategies for disease-specific growth platforms and business development for Abbott’s medical foods portfolio. He can be reached at 267-432-2696; E-mail: gregstephens@windrosepartners.com.
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