You must protect all your trade secrets – Neeraj Thomas

A key ingredient of success has been Barr's ability to keep their Irn Bru recipe under lock and key and out of competitors' clutches. Picture: John Devlin
A key ingredient of success has been Barr's ability to keep their Irn Bru recipe under lock and key and out of competitors' clutches. Picture: John Devlin
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The recent case involving McDonalds, where the EU Intellectual Property Office revoked the company’s EU trade mark for “BIG MAC” owing to McDonalds’ failure to show genuine use, raises some interesting questions. It has also led food and drinks businesses to query what practical steps they can take to protect their most important commodity: their brand. As is so often the case, the answer lies in ensuring a company’s valuable intellectual property rights are properly protected.

Something that often catches companies out is if a logo is designed by an external consultant (or someone other than an employee of the company), the default position is that the designer will be first owner of the copyright. To ensure the company who commissioned the logo is the true owner of the copyright in the logo, a written agreement (an assignation) is required to transfer the copyright from that third party to the brand holder.

Neeraj Thomas is a Senior Associate, Burness Paull

Neeraj Thomas is a Senior Associate, Burness Paull

Failing to make such arrangements is not uncommon in practice, but the consequences can be significant (and very expensive). In 2015, the High Court in London heard a case in which it was alleged the well-known Innocent Smoothies logo was not owned by Innocent’s trading company – on the basis that ownership of that copyright had never been effectively transferred from the design agency commissioned by Innocent to carry out the work. Although it was ultimately decided Innocent had “beneficial ownership” of the logo, the entire case could have been avoided with a simple contract.

As well as ensuring a brand holder owns the copyright in their logo, it is always sensible to register your brand or brands as a registered trade mark. Trade marks cover recognisable signs, designs or expressions which distinguish goods and services. Trade mark registration lasts for 10 years and there is no limit to the number of times a registration can be renewed. A trade mark registration can give the owner a monopoly right over that trade mark for ever, as long as the registration is maintained.

One note of caution is that even if a trade mark is registered, there is no guarantee it will remain protected. A registered trade mark can be revoked if there has been no genuine use of the mark by the owner for a period of five years after it has been registered. As the McDonalds case shows, being able to demonstrate genuine use in the relevant territory during the relevant period isn’t always straightforward.

In addition to registering a brand name, it is also possible to register a 3D mark which covers the shape of a product or its packaging (ie the shape of a bottle). It is by no means certain that each and every shape is capable of enjoying the protection of a 3D trade mark – for example Kit-Kat’s application to register their four-fingered KitKat bar was refused. Whilst there are some important limits as to what can and cannot be registered as a 3D mark, there is no doubt that if capable of registration, a 3D mark can add real strength to overall brand value.

In 2018 the UK government introduced new Trade Secret Regulations, extending statutory protection to trade secrets for the first time. Unlike trade marks and patents, trade secrets do not require registration to qualify for protection. To come within the definition of a “trade secret”, the information, process or know-how must not be generally known, there must be a commercial value attributable to it remaining a secret and there must be reasonable steps in place to keep it a secret. Once these criteria are met, the Regulations provide for a number of remedies in the event that the trade secret is unlawfully appropriated; including interdicts (the Scottish equivalents of injunctions) against the unlawful use and orders for seizure or delivery up of the infringing goods.

One home-grown company that will reap the benefits of the new regulations is AG Barr. Irn-Bru is one of Scotland’s best-loved soft drinks, with the equivalent of 12 330ml cans consumed every second. A key ingredient of success has been Barr’s ability to keep their recipe under lock and key and out of competitors’ clutches. Indeed, it is said only three people know the exact recipe of Irn-Bru. In the food and drink industry where recipes may well be a closely-guarded secret, the 2018 Regulations provide added protection to guard against copying.

Neeraj Thomas is a Senior Associate, Burness Paull