1 February 2011Patents

Playing ketchup: a holistic approach to IP

Something interesting has been happening in IP in recent years. It used to be broadly possible to divide companies’ intellectual property concerns based on the type of product they produced. So hi-tech and pharma companies would have seen their patent lawyers as key to their success, while consumer goods and food companies might have identified their brands and trademarks as their principle IP assets.

But increasingly, companies on both sides of the equation are realising that it’s not enough just to protect their trademarks, or solely to focus on patents.

Chereé Johnson has been chief innovation counsel at HJ Heinz for two years. She is at the forefront of the company’s attempts to make sure its IP strategy covers all the bases. “My primary responsibilities are to make sure that we are creating strategies for protecting and defending our IP—more specifically our patents—from a global perspective,” she says.

Johnson has contributed to a rapid evolution of Heinz’s IP practice since she arrived, and the company now boasts more than 200 patents, in addition to about 7500 trademark applications and registrations.

She explains: “Heinz is a food company, so historically we haven’t had a large patent portfolio. We are definitely changing that. We see opportunities for protecting our packaging, in terms of design applications in various countries, as well as manufacturing processes and recipes.”

The idea, Johnson says, is to look at the full array of what the company can protect. So as well as all the things you might expect, Heinz is also pursuing some less obvious avenues.

“We’re also delving into the area of plant patents, whether that’s plant variety designs or plant utility patent applications,” Johnson says. “We’re trying to understand how to protect our industry leading technologies. Historically we’ve protected these sorts of things using trade secrets. But we’re realising that there may be benefits to stepping out of the trade secret forum and protecting plant varieties.

"As in most areas, our initial plan is to get in and understand what we have to protect, and whether can we protect it offensively. Then later on we’ll be thinking about how we can protect defensively and file patents on areas where we may want to have a licensing program,” Johnson says.

Up to the mark

Heinz’s trademarks policy will be more familiar to students of large brands. Sabrina Hudson is responsible for the company’s global trademark portfolio, including applications and registrations, but is also party to discussions about licensing agreements. With three paralegals working alongside her at Heinz’s Pittsburgh headquarters, Hudson relies on a network of overseas partners to help her identify and deal with potential infringements.

As with many large brands, certain regions of the world are more problematic than others when it comes to infringement. Heinz faces challenges in Asia in particular, though Hudson stresses that infringement is likely to be of a different sort for a company like Heinz than for others who run into problems.

“Heinz is a food company, so in most countries including the US we don’t have the same counterfeiting problems that say a clothing or technology company might have, but we still face counterfeit issues in some parts of the world,” she says.

“A lot of infringing items we see are not food products, but merchandise using our brand, like clothing products with the Heinz mark. We sell branded merchandise as well, and we license third parties the right to use our marks in connection with merchandise. We often find third parties who are trying to sell similar products without respecting our IP rights.”

“Once a trade secret is out, there's only so much that can be done, but patent rights are enforceable whether people know about them or not. The flipside is that such a strategy puts an even greater premium on secrecy during the early stages of development, especially given the current trends towards disseminating information rather than restricting it.”

There are other challenges too, as rivals try to trade off the goodwill of Heinz brand, whether by their name or in the look and feel of a product. If someone does try to release a counterfeit product in Asia, for example, Heinz can rely on its overseas partners to step in. “Our greatest resource for counterfeit food products is our people—Heinz employees and colleagues that are there locally, but also our suppliers and distributors. They all have a vested interest in eliminating counterfeit products in the marketplace.” Sometimes though, it’s not enough merely to wait for someone to spot an infringement. Sometimes it’s necessary to be more proactive in identifying those who are damaging Heinz’s brands.

To that end, the company sometimes hires agents to go to trade fairs and other events in order to keep a look out for potential problems.

Double-edged sword

There is a contradiction at the heart of an IP strategy that relies on the cooperation of staff and business partners, one that Heinz is acutely aware of: clients and staff often have access to sensitive product information.

Johnson says: “One of the biggest concerns for any food company is maintaining a strong trade secret protection program to prevent inadvertent or intentional diversion of proprietary information. Prevention is about making sure that everyone in the company understands the sensitivity of the information, and as you begin working with new partners and suppliers, that they understand that too.”

In some ways, this problem provides an insight into the thinking behind moving from trade secrets protection to a patent-based system. Once a trade secret is out, there’s only so much that can be done, but patent rights are enforceable whether people know about them or not. The flipside is that such a strategy puts an even greater premium on secrecy during the early stages of development, especially given current trends towards disseminating information rather than restricting it.

Johnson says: “Another area for caution is this concept of ‘open innovation’. That’s the new buzzword, the new thing that people want to make sure they’re doing—developing partners, receiving and exchanging ideas—but you have to be very careful about that.”

She adds: “Sometimes the company and the business may want to go in a different direction from a conservative legal standpoint, so we have to follow their path, provide the best protections available and make sure they understand the risks associated with it.”

Worse case

While Heinz is reluctant to discuss specific cases of either patent or trademark infringement, Hudson confirms that the priority is to get the product off the market.

“We try to resolve it without resorting to litigation,” she says. “If that’s not possible, it would depend on the country and the nature of the offence as to what we do. The main thing is to get it off the market as quickly as possible so it doesn’t harm our brand.”

If litigation is necessary, Heinz will look to its outside counsel for assistance. However, most of the day-to-day intellectual property work, whether that be registrations, applications or even patent filings, will be co-ordinated in-house.

Early involvement

One of the key strengths of the company’s approach to IP is allowing the IP specialists to participate early on in a product’s development, ensuring that potential difficulties are identified early and that opportunities can be identified.

Johnson explains: “Here at Heinz, we have an unusual and beneficial situation where I actually sit with the R&D team several days a week. I’m able to be involved very early on from the conception stages. The global R&D community has embraced me as a team member. I participate in many of the R&D leadership teams, so I’m usually involved from the very beginning in terms of ideas, conception and thinking about solutions for problems that we may encounter.”

This level of influence has other benefits for the company too. “I see a lot of technology coming across my desk, so one of my other roles is connecting technologies to different businesses and different regions. So if I see something coming out of the US, and I know that the UK team are working on something similar, I can coordinate information sharing between the different areas. This is an example of the true culture of sharing at Heinz,” Johnson says.

Hudson also will contribute from the beginning to branding discussions, including on matters like packaging design with a view to securing trade-dress rights.

Upholding standards

In a competitive marketplace, Heinz has a longheld reputation for quality and brand identity. Its tomato ketchup is one of the world’s mostrecognisable food brands, with 150 products that are number one or two in markets worldwide. With that sort of reputation, it is imperative for the company not only to be watchful against imitators, but to ensure that its assets are as robustly protected as possible. Its holistic approach is an attempt to do just that.

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