Food & Drink is the largest element of UK manufacturing, but it’s been a tough last couple of years for producers. Labour shortages, supply chain challenges and increasing costs have been eating away at their margins and there’s an increasing realisation that there is only so much growth available in their home market.
As such, and despite the uncertainty and additional bureaucracy post-Brexit, growing international export markets remains firmly on the New Years Resolution list for many UK F&D companies. According to Johnston Carmichael’s last Annual Food & Drink Report (we’re looking forward to the next one in February 2024!), over half of F&D producers questioned are already targeting international markets and we expect that only to expand in 2024.
The growth opportunities are obvious when you think about the sheer size of some of these markets, especially the US, Middle East and Far East. But deciding to export and making a success of it are two very different things and you can easily run into issues if you’ve not done your homework and planned ahead – not least from an IP perspective.
So, to start your exporting year off on the right foot, here are our top tips for Food & Drink exporters to consider when it comes to trade marks and protecting your brand:
You can’t register everything everywhere - and you don’t need to!
There are so many export opportunities out there and it’s important not to get distracted and to focus your brand protection efforts strategically on the countries where a) you’re likely to see the biggest rewards (i.e. in terms of sales) and b) the risk is greatest (e.g. from squatting or rogue distributors).
So, get advice from your IP attorneys on the best strategy and prioritise (considering your legal, marketing and business needs) to make your budget work as effectively as possible.
Key things to think about include what names and logos you are actually using and where (both now and over the next five years).
Once you’ve worked out what you ideally want to protect and where, the next key question is: can you?
Trade marks are territorial beasts, so just because you’ve been able to register your marks and sell your products in the UK without issue to date, it’s far from guaranteed that the same will apply in new markets. Further, the fact you’ve been able to register your trade mark in a given territory does not necessarily mean that you are free to use it in that territory.
Therefore, we recommend running at least some level of clearance checks early on to find out whether a third-party owns any earlier rights which you could be infringing and which could result in a forced rebrand and legal action against you.
Remember: identical and similar marks can pose an infringement risk, so cast the net more widely than you might initially think. Again, your attorneys will be able to advise on the best clearance strategy, taking in to account budget, size of market, importance of brand and so on.
Review your protection regularly
Businesses and their export markets change and develop with time, so don’t assume that you only need to look at trade marks once or when you start your business or start exporting. When entering a new market or developing a new product, check your coverage to ensure that you are protected for the right brands, right products, and right markets and that your trade mark portfolio evolves with your business. Finally, good internal communication will be key to ensuring that your international team are seamlessly joined up with the rest of the business (especially those handling your trade mark protection!).
When it comes to China, get good local advice – early on!
China is a massive export market, but be aware that there are certain quirks to the Chinese trade mark system.
For example, there is a subclass system which sits below the usual international classification system which means that goods that may seem similar to a UK/EU F&D exporter e.g. tea and tea-based beverages fall in a different subclasses and are actually considered dissimilar from a Chinese perspective. It can work the other way too, so you could unexpectedly find yourself infringing a brand which would never be an issue in your home market.
Keep in mind also that China is a “first to file” country, which means if someone registers before you (including a squatter, who is not using the mark), they could stop you from registering or using your brand in China, even if you’ve previously been using the name there for some time.
Remember too that a Chinese registration covers only mainland China; if you want protection in Hong Kong, Taiwan or Macao, you’ll need to file separate applications.
Lastly, if you file in China via the Madrid Protocol (or “International trade mark”) system, remember to apply separately for a Chinese Registration Certificate once your mark is granted, as these are often needed to enforce your rights and to list your products on certain online marketplaces.
Own your brand and design work
Make sure that you register and own your brand, not your distributor. That means filing early and making sure that your contracts (e.g. licence and distributorship agreements) contain robust provisions specifying how, when and where your business partners may use your trade marks.
Likewise, if you have a logo and/or packaging designed for you by an agency, make sure that the copyright has been assigned to you. If you don’t have a contract or assignment in place, the agency will own it, not you. This is one of the most common issues we see in due diligence at investment and exit.
And finally, don’t forget about Registered Designs
Registered designs can be a very powerful way to protect the look and feel of a product or its packaging and make for a useful defence against copycats. Yet they are often overlooked and underused. In order to obtain a registered design, unlike trade marks which can be filed at any time in your product’s life cycle, you can’t have disclosed your design prior to filing (although some countries have a limited grace period). So, think about designs early on, especially when looking at a rebrand, and take a holistic approach to building your IP arsenal.
Remember, this is not just another tick box exercise – you’re protecting what’s potentially the most important asset in your business (your brand), so get good advice and allocate the time, budget and internal resource it deserves.
If you have any questions or for more information, please contact Rowena Tolley, Alicia Nash or your usual Kilburn & Strode advisor.