Trademark Archive

Legal Tools for Food Hubs, Part 1: Intellectual Property

April 7, 2014

by Lauren Handel

I recently spoke on Legal Tools for Food Hubs at a conference put on by the Wallace Center’s National Good Food Network. (By the way, the conference was truly excellent, and I recommend that anyone working in food hubs, or local food generally, attend next year.) For those who don’t know, a “food hub” is a business that connects farmers to local markets by providing various services, such as aggregating products, marketing, and distribution. There are many legal tools that are potentially useful for food hubs or any food business. I focused my presentation on three issues of particular relevance to food hubs: (1) intellectual property; (2) contracts; and (3) business planning to minimize upcoming regulatory burdens associated with the Food Safety Modernization Act (FSMA). I thought I would share here some of what I told the group. Today’s post is about intellectual property. Later this week, I’ll cover contracts and FSMA issues.

Every business should have a strategy for identifying, protecting, and leveraging its intellectual property (IP). Food businesses are no different. Trade secrets, copyrights, and trademarks are valuable assets. But, if these assets are not carefully protected, they will be lost. The first step in protecting IP is to know what you have. An IP audit should be done and periodically updated to consider what IP the company has, what it is doing to protect that IP, and whether any steps should be taken to better protect the IP. The audit should consider the company’s patents or patentable inventions, copyrighted works, trade secrets or other confidential business information, and trademarks.

Each form of IP is acquired differently and protected differently under the law. For example, patent rights exist only if a patent is obtained from the government, but copyright is protected by law as soon as an “author” creates an original work in a fixed, tangible form. A trade secret is a property right in some piece of information or know-how — such as a proprietary recipe, formula, customer list, or pricing information — that gives the owner a competitive advantage precisely because it is not generally known. A trade secret is protected under the law only if it is kept secret. Thus, if a company with trade secrets does not take steps to maintain confidentiality, it loses the ability to protect those secrets legally, and competitors will be free to use the information. A trademark is a symbol, logo, words, or anything that distinguishes goods or services as coming from a particular source (i.e., the manufacturer or service provider). Trademark rights are derived from the use of a mark in connection with the sale of goods or services in commerce. A trademark owner who does not continue to use the mark, or who freely allows other people to use the mark or similar marks, will be deemed to have abandoned his or her rights.

Company policies and contracts are key to protecting and maintaining IP rights. For example, when a company hires a designer to create a website or marketing materials, the designer generally will be the owner of any copyright in the works created unless the company and the designer enter into a work-for-hire agreement or assignment of copyright to the company. Companies with valuable trade secrets should have internal policies in place to maintain confidentiality and nondisclosure agreements with employees and outsiders to whom trade secret information is disclosed. Whenever a company allows someone else to use its trademark, it should have a written license agreement controlling the use of the mark. Without such control, the trademark owner risks abandoning its rights.

Trademarks are especially important to “good food” businesses because the only way that a small, local, sustainable food company can compete in the marketplace is by distinguishing itself from conventional, industrial food. Even though the owner of a trademark has legal rights without registering the mark with the US Patent and Trademark Office, registration is a good idea. Without federal registration, a trademark owner’s rights extend only to the geographic area where the mark is used in commerce. That means that a trademark owner has no right to block a competitor in another state from using the same or a similar mark. In contrast, national registration on the Principal Register confers nationwide rights to block trademark infringement. Federal registration of a trademark provides other benefits as well, such as a presumption that the mark is valid and, after 5 years, “incontestability” status, which makes it much harder for anyone to attack the mark in court.

A particular challenge for local food businesses is to choose a brand name that can be protected under trademark law. A brand that includes the name of a geographic place (for example, “Pleasantville Food Hub”) is descriptive and, therefore, would not qualify for full trademark protection. Because trademarks are meant to distinguish the source of goods or services, the less distinctive the mark, the less likely it is to be protected. If a mark is descriptive, one option is to register it on the Supplemental Register. Although such registration does not confer the full set of rights that comes with registration on the Principal Register, it can deter others from using a similar mark and will block the registration of confusingly similar marks. Through continuous use and marketing, a descriptive mark can acquire so-called “secondary meaning” — that is, it comes to be associated with the owner of the mark such that it then can be registered on the Principal Register.

This is far from a comprehensive discussion of IP issues that may be relevant to food hubs or other food businesses. Feel free to contact us at info@foodlawfirm.com or (888) 908-4959 to discuss your business’s IP concerns.

 

 

Imported Extra Virgin Olive Oil Is Still Adulterated, Italian-Americans Cheer

June 26, 2013

California extra virgin olive oil is the best agricultural product in America that you are not buying. No doubt that California olive farmers are talented, but a lot of the credit needs to be shared with the California Olive Oil Council. The Council grades and certifies olive oils produced within the state and awards the use of its “Certified Extra Virgin” trademark to products that meet strict acidity and ultraviolet absorbency standards.

This privately operated grading and certification regime is the best insurance you, as a consumer, have against the rampant fraud permeating the international olive oil trade. Almost all of the imported olive oil you buy in the United States is no where near “extra virgin”. Tom Mueller, author of “Extra Virginity: The Sublime and Scandalous World of Olive Oil”, is the last word on the subject of olive oil fraud. (Buy that book). The ambition of the Olive Oil Council is to help domestic olive growers and consumers distinguish California oils from the criminally adulterated products on your supermarket shelves. I’ll bet that because of the objective quality standards they apply to oils produced in the region, in 10 years, California will do for the global olive oil trade what they once did to wine.

Up until now, the work of rehabilitating the reputation of the “extra virgin” label against adulterated imports has been assumed entirely by the Council, a nonprofit corporation. The latest Farm Bill sought to create a nationwide, federally sponsored “marketing order” for olive oil. A marketing order establishes standardized quality characteristics for agricultural products, and they are each regulated by the USDA’s Agricultural Marketing Service. The marketing order for olive oil would also have meant a modest tax to fund the interdiction and inspection of the imported foreign sludge. Two congressmen from New York, however, opposed the provision.

We put our money where our mouth is.

The ironic bit about this New York Post piece about the collapse of the olive oil marketing order in Congress is the alliance of the various lawmakers of “Mediterranean stock” that shot it down. I take it that these lawmakers were convened ostensibly because of their constituents’ cultural affinity for olive oil. None of them stopped to think that a more stringent inspection regime would help ensure they purchase legitimate extra virgin olive oil like Nonna used to have, instead of the adulterated biodiesel coming out of Spain and North Africa. I guess some people don’t mind being lied to so long as the lies are cheaper than the truth.

Thanksgiving Leftovers – Food Law News of Note

November 27, 2012

1. As it turns out, everything I ever needed to know about Dunkin Donuts, I learned from a Jim Gaffigan sketch. Dunkin Donuts recently attempted to trademark “America’s Best Coffee” with the United States Patent and Trademark Office, but was issued an initial denial. Trademark law 101 considers Dunkin’s proposed slogan to be merely laudatory. Laudatory words or terms that attribute quality or excellence to goods and services are considered merely descriptive and therefore ineligible for trademark protection.  TMEP §1209.03(k).  Laudatory terms, phrases, and slogans are nondistinctive and unregistrable on the Principal Register without proof of acquired distinctiveness.  See In re Nett Designs, Inc., 236 F.3d 1339, 57 USPQ2d 1564 (Fed. Cir. 2001) (holding THE ULTIMATE BIKE RACK a laudatory, descriptive phrase that touts the superiority of applicant’s bicycle racks); In re Boston Beer Co., 198 F.3d 1370, 53 USPQ2d 1056 (Fed. Cir. 1999) (holding THE BEST BEER IN AMERICA a laudatory, descriptive phrase for applicant’s beer and ale). This is probably not a rookie mistake by the capable and well-paid counsel to Dunks. This initial denial to the application just lays the groundwork for them to establish a claim of acquired distinctiveness for the mark. Stay tuned.

All USPTO applications and their affiliated documents are a matter of public record. You can search for them here at the Trademark Status and Document Retrieval Portal. The serial number for Dunk’s application is 85739062. Follow the saga if you are into that sort of thing.

2. Via Civil Eats, a thought provoking piece on the future of organic agriculture. As a point of clarification, I think the threat posed to the organic brand from conventional foods labeled “natural” or “wholesome” or whatever is overstated.  How incredulous are you when you see that ridiculous commercial for Nature’s Valley sugar bars? Those sorts of nebulous marketing terms are already bunk in the eyes of  truly discerning consumer. The standards for organic agriculture, however, are static and are apt to cause a public outcry anytime an attempt is made to change them. The actual threat to organic agriculture or organic products is not General Mills or maleable marketing terms, but local foods. That’s the word on the street anyway. Organic and local compete for the same affluent, discerning consumer. The real dichotomy of choice is not “big ag” versus “organic” but “premium niche” versus “premium niche”. The lack of a definite standard for “local” compounds the threat – the Consolidated Farm and Rural Development Act of 2008 for example defined “local” as anything produced within a 400 mile radius. That is just over 500,000 square miles, or an area the size of Paraguay.

3. Farm sales in commodity states like Iowa are up sharply in anticipation of big changes in the tax code as we creep ever nearer to the Fiscal Cliff.

If Congress fails to resolve the “fiscal cliff” before the end of the year, a number of automatic tax increases and spending cuts will be triggered on Jan. 1. That includes capital gains taxes increasing from 15 percent to 23.8 percent, and the allowable deduction on estate taxes would drop from roughly $5 million to $1 million.

A few parcels are fetching in the neighborhood of $15,000 per acre. At those prices, the sale of even a modest sized farm of 200 acres has huge tax consequences.

 

California Extra Virgin Olive Oil Certification, The Best Food Idea You’ve Never Heard Of

October 19, 2011

The New York Times today has an excellent article on the California olive oil industry. For the last few years, the industry trade association, The California Olive Oil Council, has tried to distinguish the truly extra virgin products of its membership from the flood of mislabeled imports stocked on supermarket shelves.

The Council tries to underscore the distinction between these cheap imports and its members’ products in a number of ways. They sponsored the UC Davis study cited above which let you know just how dreadful the competition is.

The Council also has its own certification system to identify those domestic oils that are qualitatively superior to competitors. Qualifying products are marked with this symbol. These oils are superior in every measurable way to the yellow jugs of biodiesel you get at Costco.

The problem with the system is that you have never heard of it. Your olive oil purchases should be predicated on the presence or absence of the certification symbol, yet as a typical consumer you do not know to even look for the seal on the bottle.

Trademark law is an astonishingly powerful way to unite growers from across an entire agricultural industry, unite them behind a single production standard, and then fund a comprehensive marketing message to consumers. Idaho potatoes and Florida citrus use trademark law and licensing to promote their members’ products. Trade shows, trade publications, product placement, full page ads in Saveur, all of that stuff is funded through collective certification mark licensing fees which are paid by membership. California has no such system in place yet, which is probably the reason why you are still putting biodiesel on your salad.

For what it is worth, I have tried lots oils bearing the Council’s mark and they rock. If you can find a bottle of it, buy it.

Time for a Drink

August 14, 2011

If you are stuck at the airport or at the doctor’s office, read this long-form piece on the history of vodka in the United States. Key quote:

“Keep in mind that the Alcohol and Tobacco Tax and Trade Bureau defines vodka as “neutral spirits [alcohol produced from any material at or above 190 degrees proof] so distilled, or so treated after distillation with charcoal or other materials, as to be without distinctive character, aroma, taste, or color.””

To me that sounds like the definition of ubiquitious. Marketing and branding were the drivers of demand in the story of American vodka, not quality or distinctiveness. Though it is not credited in the article, you can be sure that trademark and IP law for all of the fancy logos, ads, and product labels were an important part of its success, too.