Guest article

Managing and protecting your ingredient in a crowded market

- Last updated on GMT

Related tags: Ingredient, Trademark

In the increasingly competitive nutraceuticals market, branding
strategy is essential to market differentiation.

Where the success or failure of a commercial product depends on the efficacy or successful promotion of a key ingredient, it may be advantageous to coin the name of that ingredient in order to claim exclusivity in marketing and promoting the end product. Ingredient "brands" indicate that a specific component of a product comes from a known source. A successful ingredient brand campaign can transform a commodity product into an enormously valuable consumer brand worth billions of dollars. If there is any doubt in your mind about the market power of an ingredient brand, simply ponder the clout of the Intel®​ and NutraSweet®​ brands. To embark on a successful ingredient branding campaign, it is important to establish a standard of quality and/or efficacy in relationship to your ingredient. You must be open to collaborating with distribution channel partners. You must be prepared to invest the money to sustain a marketing program to promote your ingredient. Consider targeting your ingredient to middle-of-the road brands where the addition of your ingredient may be perceived as providing the greatest value enhancement to yield a new ingredient-containing product that is more competitive with traditional category leader products. In certain circumstances, federal trademark protection can be sought for the coined name of a key ingredient. If secured, federal trademark registration affords an invaluable commercial asset, affording business and marketing advantages as well as significant legal rights -- particularly in the context of a crowded marketplace. To claim exclusive trademark rights to the coined name of an ingredient, the proposed name or "mark" must be newly coined and have no recognized meaning in the relevant trade or industry. If the proposed name is commonly used or recognized by others in the relevant trade, such as a generic name, common commercial name, or nonproprietary name or acronym, then arguably no one party can claim exclusive trademark rights and the designation may be used freely by anyone. To preserve potential trademark rights:

  • Create a generic name for the proprietary ingredient that all may use, and then seek exclusive protection for a coined name for that same ingredient.

  • Highlight the coined name in text and on packaging through the use of a special font or stylization or lettering size, or even capital letters, sufficient to distinguish the coined name from surrounding text or other ingredients

  • Use "look for" advertising to convey to consumers that the coined name has special source significance

  • Use trademark symbols, such as ™, to highlight the trademark significance of the coined term

Bear-in-mind, however, the mere addition of a ™ symbol or use of the term "proprietary" will not magically transform a merely descriptive term into protectible trademark, particularly if the term appears amidst a list of other ingredients. Strategic implementation of trademarking practices and market positioning of an ingredient can garner immediate brand recognition and leverage a "ready-made" audience for a new product which is tough for a competitor to imitate. For nutraceutical companies with a unique ingredient, effective ingredient branding can facilitate market penetration in highly competitive distribution channels. Norman Rich is a partner with Foley & Lardner LLP and a member of the firm's Trademark, Copyright & Advertising Practice Group. He can be reached at 202.945.6100or by e-mail at aevpu@sbyrl.pbz​. James F. Ewing is a senior counsel with Foley & Lardner LLP and a member of the firm's Biotechnology & Pharmaceutical Practice Group and the Life Sciences and Food Industry Teams. He can be reached at 617.342.4088 or by e-mail at wsrjvat@sbyrl.pbz​.

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