Protecting Assets

The Internet has birthed the concept of intellectual property (IP) rights as illegal music and movie download remains rampant. In 2007, a report by the Institute for Policy Innovation found that the US loses $12.5 billion in total output annually as a result of global music piracy. While the infringement of IP rights is often seen in online and offline publishing, the food and beverage industry is feeling the need to protect its assets.

Such protection starts from the registration of trademarks. The Intellectual Property Office of Singapore (IPOS) defi nes a trademark as “a sign used by a person in the course of business or trade to distinguish his/her goods or services from those of other traders”.

The authority requires a registered trademark “to be capable of being represented graphically” that can be “any letter, word, name, signature, numeral, device, brand, heading, label, ticket, shape, color and other aspects of packaging”.

However, trademark disputes occur from time to time. On September 8 2009 the Associated Newspapers reported an eightyear trademark battle by McDonald’s in its bid to stop a restaurant in Malaysia from calling itself McCurry. The fast food chain lost in the end.

In another legal suit with 3-in-1 coffee mix manufacturer Future Enterprises in 2007, the Court of Appeal ruled in McDonald’s favor and barred Future Enterprises from registering the word ‘MacCoffee’ for its coffee mix on the grounds that it was similar to McDonald’s ‘McCafé’, especially since both trademarks were used on coffee products.

A study by Strategicom has found that a majority of Singapore food manufacturers look to famous brands for inspiration when designing their trademarks.

While the infringement of IP rights is often seen in the publishing industry, the food and beverage industry is feeling the need to protect its assets.

Creating trademarks

A recent research study by StrategiCom on Singapore food manufacturers was conducted to find out if the manufacturers are leveraging on their trademarks to grow their businesses in their markets. Supported by the Singapore Food Manufacturers’ Association and SPRING Singapore, the scope of the study covered:

• How Singapore food manufacturers ensure the uniqueness of their trademarks during creation,

• The percentage of companies that registered their trademarks in relevant markets,

• The extent the food manufacturers have gone to promote their trademarks in their markets, and

• The extent the food manufacturers have done to enforce their rights on their trademarks in the event of a breach.

The study revealed a worrying sign – a majority of the manufacturers look to famous brands for inspiration when designing their trademarks.

This could potentially spark off more legal wrangles due to the lack of differentiated trademarks. Manufacturers were surveyed on their company policies and attitudes on establishing brands through trademarks, as well as on the extent of their marketing activities.

The researchers discovered that 54% of those surveyed would select colors and designs that looked similar to those belonging to leading competitors before creating a brand, while 57% selected colors and designs akin to famous brands.

Group principal consultant and CEO of StrategiCom Wilson Chew says, “The results of the survey indicate that the majority of Singapore food manufacturers do not emphasize on originality when building their brands. This can be dangerous, especially when their products have trademarks similar to leading brands in the food sector.”

“In a grave situation, it could be viewed as passing off as another brand that could lead to possible legal implications. The brand could potentially assimilate not only positive associations of brand leaders, but also portray negative connotations.”

The study found that 60% of the manufacturers surveyed registered their trademarks in some or all of their overseas markets; 83% registered their trademarks in Singapore and 76% monitor companies for unauthorized use of their trademarks.

Statistics from IPOS showed that local and foreign-based entities in 2007 filed 1012 applications for class 30, which has provisions for ingredients and components in food manufacturing, and 1060 applications in 2008, placing the class at the 10th spot for the most number of applications filed for two consecutive years. Despite the numbers, the study found that the manufacturers did not extensively market their trademarks to maximize their commercialization efforts.

Statistics from the Intellectual Property Office of Singapore (IPOS) showed that local and foreign-based entities filed 1012 trademark applications for class 30, which has provisions for ingredients and components in food manufacturing, in 2007 and 1060 applications in 2008.

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Empowering manufacturers

A one-day workshop entitled ‘Brand Building with Trademarks – The Mark of Success’ was held in Singapore last September to help local food manufacturers differentiate their brands with greater originality and safeguard their IPs.

Speakers from design agency Crecept, Alpha & Omega Law Corp and StrategiCom shared with the delegates on establishing an online presence, having a legal perspective on strategies to protect and manage their trademarks in the midst of competition, and the ways to win their customers.

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