Are you protecting your competitive edge through IP protection?

In the food and beverage industry, you should be able to immediately rattle off your point of difference over your competitors.

This point of difference is particularly important in the export market due to the geographical constraints of New Zealand, in terms of the distance to our target markets as well as our restrictions on land area.

Your company's point of difference may be reducing your costs due to improved processing/manufacturing efficiencies you have developed.  This may allow you to compete on price, yet maintain a higher profit margin.

Alternatively, you may have developed a novel added value food product which none of your competitors have, allowing you to charge a premium.

However, as many of you will appreciate, it is only a matter of time before your competitors, either based in New Zealand or overseas, catch on to your point of difference.  Suddenly, you are on equal playing fields, or quite possibly at a disadvantage due to the challenges discussed above.

As such, many of you are doing your company a disservice by not protecting your competitive edge through IP protection, such as patents.

Of course, in many cases patents may not be a suitable strategy, and other forms of IP protection are better suited, such as trade secrets.  The take home message is to at least have a discussion with a patent attorney before any disclosure or sale.  This can help you identify what form of IP strategy is best suited to your company's goals.

As outlined below, patents can allow your company to really leverage your point of difference for much longer periods of time than achieved just through speed to market and/or maintaining trade secrets.  For example, such secrets are often lost, for instance when your employees go to work for a competitor; a common problem seen in New Zealand.  

I also outline how patent rights can lead to a host of other growth opportunities, besides simply protecting your patch.

Path to market

One of the great advantages of the food industry is, when compared to the likes of the human pharma, the path to market is relatively short and without needing to go through clinical trials.

This actually makes patents in the food industry particularly valuable because the 20 year monopoly can be put to its maximum use during the commercialisation of your product or process.  This links in well with our country's expertise in getting a new food product to market quickly.

A relatively fast R&D process can also help to avoid ongoing patent costs for a "dead duck" concept.

This also means there is provide a window of opportunity to withdraw your patent application prior to publication (normally 18 months after an initial filing).  This can be a fall back position to allow for trade secrets or to avoid your competitors from learning from your R&D mishaps.

Multi-industry applications

In many cases, R&D in the food sector will have multiple applications.  For example, development of a new food processing technique could lead to improved efficiencies for both the seafood and beef industry.

Therefore, you can retain rights to your patented technique in your industry of interest, while cross-licensing in a different industry or even your same industry in another country.  This adds passive income, generates ongoing collaborations, and can synergistically add to our export market.

We only have a small pasture

The geographical size of New Zealand means we cannot mass produce compared to the likes of South America, USA or China.

Indeed, John Key has signalled a key area for growth in our export industry is through food exports which should treble to $58 billion p.a. by 20251.  If we have any hope of meeting this target (and similar growth of your company), it will need to be from added value products or improved processing techniques to boost productivity or lower costs.

Low threshold for patent exemplification

Compared to other areas in biotech, the food industry is a relatively predictive art.

What this means is if you are able to show the effectiveness of a new antimicrobial agent for preserving poultry, it is also likely that you could seek valid patent protection for preserving other meats, other food products, and potentially even other uses with very little supportive data.

As discussed above, this opens up a world of licensing opportunities.

Advertising

Overseas companies are becoming increasingly IP savvy and regularly review patent filings and publications.  They may then approach your company if your technology looks promising or synergistic with theirs - this can lead to new business opportunities and income streams through licensing to avoid patent infringement issues.

You can also use patents to advertise your company's innovative nature to the general public.  Patented technology instantly helps to give your product and company an element of sophistication.

Source: Food NZ