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Beating the counterfeiters with IP

Ruth Walker and Edward Carstairs of Gill, Jennings & Every discuss the use of intellectual property to protect food and drink businesses from counterfeiting.

According to The Food Crime Annual Strategic Assessment [1], published recently by the Food Standard Agency’s National Food Crime Unit, piracy could account for more than one billion pounds of annual UK food and drink trade. Different businesses benefit from usage of different anti-counterfeiting measures. These can present opportunities in terms of creating and building value in your business through intellectual property (IP), but they also present risks in terms of navigating third party IP.

Whatever techniques are employed, however, making them visible to consumers can help to build trust in your brand in the marketplace, increasing the value of your IP. The alcohol industry is embracing a range of anti-counterfeiting measures which prove to consumers that drinks companies are willing to invest in ensuring that only legitimate, quality products bearing their branding reach the shelves.

Tonic wine producer, Buckfast, employs a combination of anti-counterfeiting technologies, registered IP rights and trade secrets to protect its brand and products. The Buckfast recipe is a trade secret, while its name and mitre device logo (shown on the right) have both been registered as trade marks. The logo is used both on the cap and the label of the bottles. The screw caps are of a snap open style to indicate any tampering and both the cap and the ring that remains on the bottle after opening are marked with batch number and bottling date. The label is also barcoded. All of these measures have become familiar to Buckfast’s customers and retailers, making it easier for them to identify fakes. 

The increasingly pervasive ‘Internet of Things’ or IoT is starting to be added to the arsenal of anti-counterfeiting technologies available to food and drink producers and packagers.’

Alcohol producers sometimes use chemical markers to track their product and identify marker-free counterfeits, though regulations must of course be considered where additives to the drink itself are used. Whilst the recent

Brexit vote might result in the UK adopting its own legislation in this field in due course, EU law is likely to remain in force for a few years yet. It will of course remain relevant to UK companies exporting to the EU in any case. Some marker technologies are patented. For example, European patent number EP2038647 [2] protects aspects of the use of maltose as a marker for ingestible products.

The increasingly pervasive ‘Internet of Things’ or IoT is starting to be added to the arsenal of anti-counterfeiting technologies available to food and drink producers and packagers. Thinfilm, a Norwegian printed electronics specialist, initially developed smart bottle technology for Diageo’s Johnnie Walker Blue Label. This has been modified for use on wine bottles in collaboration with G World Group, a global authentication company, and Ferngrove Wine Group, a Chinese owned, Western Australia premium wine company. The bottles were unveiled at last year’s Mobile World Congress, Shanghai.

The bottle labels incorporate extremely thin printed electronic sensors, which can detect whether a bottle has been opened. NFC (near field communication) tags, similar to those used for contactless payments, uniquely identify individual bottles in the supply chain. The tags remain active even after the factory seal has been broken and allow consumers to scan the bottles with their smartphones to verify authenticity and obtain additional product information.

Thinfilm and G World Group have both protected their investment in this innovation using the patent system; Thinfilm’s NFC OpenSense tags are patent-pending and G World’s SAMSCAN process is patented around the world. Of course, such technologies need not apply only to alcoholic products. The broad range of possible applications presents Thinfilm and G World Group with huge potential to monetise their patents in other fields, for example via licensing.

The International Federation of Spirits Producers estimates that spirits companies lose over one billion dollars per year due to counterfeits [3] so there is certainly a commercial incentive for them to embrace technology to protect their brands. Governments also have an incentive to help; across the EU an estimated €1.2 billion of government revenue is lost due to wine and spirit counterfeiting, along with 23,300 direct and indirect job losses [4].

Developing an innovative way of protecting against counterfeiting can allow you to license your technology to other companies.

UV-Vis absorbance spectroscopy can be used to identify the brand of spirits, and even the grade or distillery of origin. This technique can therefore be used to identify counterfeit and watered-down alcohol products. Even more sophisticated identification software based on neural networks is also under development [3].

Ocean Optics, whose modular spectrometers and complementary technologies can be used for such optical testing, have noticed a shift in the drivers for developments in testing techniques in recent years from biomedical applications to solutions for the food and drink sector. This shift illustrates how the food and drink industries are looking to existing technology in other fields for a quicker route to high-tech solutions.

Searching patent databases can allow you to understand what technology already exists, potentially triggering ideas for developments. Being aware of relevant patenting activity can also help you to identify prospects for R&D collaborations. It is essential when embarking on this kind of project though to ensure the collaboration agreement sets out clearly what IP each party is bringing to the discussions and who will own any new IP which results. Developing an innovative way of protecting against counterfeiting can allow you to license your technology to other companies, or to carve out a space which gives you an edge over your competitors.

When it comes to protecting your brand and packaging, enforcement of trade mark and design rights can be key in preventing counterfeits and/or dilution of a brand, while UK or EU-wide customs watches based on your registered IP, can ensure interception of counterfeits at borders. If suspected counterfeits are identified, contacting those involved in their sale can sometimes help to identify the source or at least stop the sale of the products (although caution is advisable when contacting retailers and not the actual manufacturer, in view of threats provisions under UK law). For example, a renowned bread and flour company was suspicious about branded merchandise being sold through various online retailers, marketed as souvenirs reclaimed from a closing factory. Investigations revealed that the products were indeed counterfeit, although the retailers had acquired the products in good faith from a third party. Having been advised that the products were counterfeit, the retailers agreed not to sell the infringing items in the future while further efforts were made to identify the ultimate source.

Whether you choose to protect your brand and product from counterfeiters with high-tech or low-tech solutions and however you deal with any counterfeits that do make it onto the market, visibility is key. At a time when consumers are well aware that their ‘beef’ burgers might contain horse and ‘vodka’ might even be antifreeze, they need their trusted brands to make it very clear that the products bearing well known branding are the real thing. Failure to safeguard your brand in this way is likely to result in genuine damage to your business, reputation and market share.

Ruth Walker, IT & Engineering Patents Associate, and Edward Carstairs, Trade Marks

Associate, Gill, Jennings & Every LLP, The Broadgate EC2A 2ES Tel: +44 (0)20 7655 8500

Web: www.gje.com Email: Ruth.Walker@gje.com, Edward.Carstairs@gje.com

http://linkedin.com/pub/ruth-walker/88/818/8a

http://linkedin.com/pub/edward-carstairs/42/8ba/180

Gill Jennings & Every LLP are a specialist intellectual property law firm providing

commercially focused advice on legal protection for innovations and brands to companies

ranging from start-ups to multinationals. A team of patent and trade mark attorneys

specialises in advising clients in the food & drink sector.

 

References

1. The Food Crime Annual Strategic Assessment, https://www.food.gov.uk/sites/default/files/fsa-food-crime-assessment-2016.pdf

2. EP2038647, https://www.google.com/patents/EP2038647B1?cl=nl

3. Ocean Optics Application Note: Sampling of Spirits, http://oceanoptics.com/application-note-sampling-spirits/

4. The economic cost of IPR infringement in the spirits and wine sector, https://euipo.europa.eu/tunnel-web/secure/webdav/guest/document_library/...

 

 



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