A GUIDE TO PROTECTING NPD AND INNOVATION
Keep it confidential
Food businesses will always be anxious when it comes to protecting new products in the developmental stage while talking to possible manufacturers, distributors and retailers. The concern that a retail buyer will go back to their own development team with an innovative idea is legitimate, and something that has happened in the past. The resources available to well-established and larger companies mean that products can be copied and on the shelves in a matter of weeks - wiping out months of hard work by new or smaller businesses. Designs and processes can be protected by patents and registrations but food and drink businesses need to take action to protect new products from being copied on a more day-to-day basis. The answer is a NonDisclosure Agreement (NDA) which offers the disclosing party a contractual remedy to seek redress. An NDA is a binding document that all parties sign before negotiations begin and is designed to ensure any discussions between
the two parties remain confidential and will not be disclosed to a third party. Common content for an NDA includes the names of the parties, a description of exactly what is confidential information, a time limit on how long confidentiality must be held, and what will happen if the agreement is broken. The type of information that can be included under the umbrella of confidential information is extensive. Any information that flows between the parties can be considered confidential - including packaging designs, know-how, techniques and product specifications. This list is certainly not exhaustive but does illustrate the breadth of items that can be deemed confidential. In addition, the agreement can state what any information disclosed may be used for e.g. to evaluate a product or sample it as part of a consumer focus group. There is often a clause which states that any samples and other information handed over will be returned.
A refusal by a retailer or other party to sign an NDA however is a real possibility, and a business in this situation is left with limited choices - carry on without the agreement, or walk away. Neither is ideal but it would be a business decision to be made at the time, with the risks and potential rewards fully appreciated. An NDA may seem like yet another piece of paperwork for a small producer to think about and indeed not everyone has one drawn up, but when the potential damage that could be done is considered, it’s a worthwhile investment.
Protecting food innovation in the UK Protecting innovative products is a vital element of competition in UK supermarkets and there are numerous threats facing food businesses that have managed to get their products on-shelf. Imitation of packaging is widespread. A 2013 study from consumer watchdog ‘Which?’ suggested that new own-brand products are relying on the success of wellknown brands by copying their packaging. Which? identified more than 150 ownlabel products it thought were borrowing elements of their packaging from branded competitors, including items in Aldi, Asda, Boots, Lidl, Morrisons, Sainsbury’s, Superdrug and Tesco. This poses a real risk to food producers. The damage that can be done is one of mistaken identity. It may affect sales as people confuse packaging and there is some potential that an inferior product may taint the perception of its branded equivalent. There is however a much bigger threat facing producers of innovative new brands – delisting. There are several instances of retailers mimicking a successful idea, producing an own-brand equivalent and delisting the original to boost the sales of items which have higher mark-ups. The most notable example would be Tesco’s delisting of ‘Saucy Fish Co.’ products in the same week it launched own-brand ‘Fish in a Flash’, both of which feature a range of ready-to-cook fish fillets, vacuum-packed with a sauce or dressing.
This practice will reduce competition and choice for consumers, and the long-term risk is price increases from producers that have no opposition. There is a range of legal tools that all food businesses should consider using to protect their new products. ww Patents - are used to protect an invention if they are new, involve a new inventive step and are capable of being made or used in industry so long as the item is not an adaptation or already in the public domain. Patents last up to 20 years but must be renewed regularly during that time to maintain protection. ww Copyright - automatically applies in the first instance to work that is original and involves ‘independent creative effort.’ There is no need to register, with the cover lasting for the life of the creator plus 70 years from the end of the year in which they died. ww Trademark - registering a trademark is a highly relevant form of protection for anyone who spends large amounts of money developing brands. A trademark can consist of words, logos or a combination of both. A registration provides 10 years where you have the exclusive right to use that mark for the goods and services it covers. ww Design - the appearance of a product can be protected by a registered or unregistered design right. It is important to understand the definition of design; it is the appearance of the product resulting from lines, contours, colours, shape, texture or materials of the product or ornamentation. The design must also be new and unique and needs to be registered in the UK within 12 months after it was first disclosed. Registration gives exclusive rights in the design for up to 25 years, however, an unregistered design right does not protect the article, only the design itself if it can be proven that it was copied intentionally.
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