The first in this new series of articles considering legal issues of relevance to the cosmetics industry will look at intellectual property (“IP”) rights, specifically what types of IP rights those in the cosmetics industry should be most attuned to. What differentiates one cosmetic product or company from another more often than not is the brand (by which I mean what distinguishes one company or product from another rather than the company or product itself) and, the formulation. IP is what underpins and protects both of these elements. Understanding what IP rights are relevant is vital for brand protection, enforcement, and commercialization. Battles over IP rights can be a key competitive tool, particularly where patents and trademarks are concerned.
IP often attracts criticism for dampening creativity and preventing people from making free use of ideas. However (appreciating that as an IP lawyer I am of course biased) IP rights ensure that ideas (as well as badges of origin) are protected and exploited solely by those who created them or otherwise have the right to do so.
IP will come into play at most stages of the life of a product, from idea generation to marketing and sale to the end-consumer, and will therefore often be one of the key value items not only when launching a product, but also in an acquisition or investment scenario. There are two “buckets” of IP—registered and unregistered (I go into more detail below on the rights themselves).
This article provides a high-level overview of key IP rights (each IP right covered below has been the subject of countless books, articles, and essays) and should not be considered an exhaustive treatise on IP rights and all potential legal rights to consider before and after the launch of a new product (there will be regulatory, consumer protection, and a whole host of other laws to consider), nor does it constitute legal advice. There are other rights and considerations (e.g., image rights, social media handles) which aren’t strictly IP rights but which are closely allied—more on these in a later article in this series.
Note that IP is territorial and will subsist on a broadly jurisdiction-only basis. There are some exceptions (e.g., EU trademarks which grant protection across the EU as a whole—it remains to be seen how Brexit will impact this state of affairs), but as a general rule, an IP right which exists in one country won’t necessarily exist in another. In the case of registered forms of IP, this will mean making applications in multiple countries where protection is sought in more than one country. This article focuses on the rights and remedies available under English and EU law but many (if not all) of the rights discussed below will have counterparts in other jurisdictions.
Right now the legal health warning is over—let’s get onto the interesting stuff.
What is it?
Copyright is a right which gives its owner the right to prevent the unauthorized use of their work. Under English law, copyright may only subsist in certain categories of “works” including literary, artistic, and musical.
I won’t go into detail here about ownership (I am saving that with all of its issues and potential pitfalls for a later article), but suffice to say, it is important to ensure that where copyright works, such as artwork or packaging designs, are produced by a third party such as a marketing agency, assignments need to be entered into to ensure ownership is transferred and the work can be used freely.
What might it be relevant to?
Artwork and packaging; design drawings; product blurb and descriptions; press releases; advertising jingles; market research reports (the copyright in these may well be owned by third-party research companies and licensed-in).
How do we protect it?
Copyright, if it subsists, will arise automatically upon creation. In some countries, it is possible to register copyright although this is rarely a requirement for enforcement. The fact that copyright is primarily an unregistered right means it is important to keep records to evidence both ownership (as mentioned above) and date of creation. With respect to the latter, emailing or posting works to oneself can be a helpful way of demonstrating that a particular work was in existence (if not created) at a particular date.
As a general rule, copyright lasts for 70 years following the death of the author. Copyright can be infringed in a number of ways, including making unauthorized copies of a copyright work. There are a number of statutory defenses available but there is no general “fair use” defense in the UK (as there is in the US for example).
What are they?
Registered trademarks are effectively badges of origin. Once an idea for a new brand name, slogan, or logo has come into existence, and it is likely it will be used for an extended period and protection is desired, applications for a registered trademark may be filed.
Trademarks are applied for in respect of particular goods and services. Cosmetic brands will, as a minimum, need protection in class 3. Registered trademarks (together with registered designs and other types of IP) can be recorded on customs notices to assist in the fight against counterfeits (more on this in a later article in this series).
Registered trademarks provide the owner with the right to prevent the unauthorized use of a sign that, for example, is identical to the registered trademark, is used in relation to similar goods and services, and is likely to confuse the “average consumer” and make them think that the goods the sign is used in relation to belong to the trademark owner when they don’t.
Unregistered trademarks are a slightly different animal in that any action taken to protect them (known as “passing off”) will be reactive rather than proactive—it is likely only when infringed that they will be given any real consideration or attention. Passing off is a common-law (i.e., established by the courts) action providing broad protection for business goodwill. It can protect get-up, names, images, and the like.
What might they be relevant to?
Packaging; marketing materials including websites; storefronts.
How do we protect them?
Registered trademarks need to be (you guessed it) registered. Applications to register trademarks can be made on a:
Certain criteria must be met in order for trademarks to be registrable, e.g., they must be distinctive and capable of distinguishing goods or services. Registrations are generally renewable every ten years.
As mentioned above, unregistered trademarks may be protectable under the law of passing off. Other jurisdictions may have a so-called “unfair competition” regime which may help in the protection of business reputation and goodwill. To establish passing off, there must be:
What are they?
Registered designs protect the appearance of the whole or part of a product resulting from features of, in particular, the lines, contours, shape, texture, or materials of the product or its ornamentation. This includes surface decoration. Community unregistered design right offers a similar scope of protection.
UK unregistered design right protects the shape or configuration (external or internal) of the whole or part of an article—it does not protect surface decoration.
Registered designs may be infringed where they produce the same overall impression on the so-called “informed user.” Unregistered designs provide a narrower scope of protection in that they provide the right to prevent unauthorized copying.
What might they be relevant to?
Packaging.
How do we protect them?
Applications to register a design can be made on a:
Designs can be registered only if they are new and have individual character. Registrations last for a period of 25 years (subject to the registration being renewed every 5 years). Community unregistered designs last for only 3 years.
UK unregistered design right lasts either 10 years from the end of the calendar year when articles made to that design are made available for sale or hire, or 15 years from the end of the calendar year in which the design was first recorded in a design document or when an article was first made to the design.
Unregistered design rights will arise where the various requirements are met. As with other forms of unregistered IP right, these are only likely to be a consideration where there is a need to enforce rights, e.g., where the shape of a competitor bottle shares an uncanny resemblance with yours and there are no design registrations.
What is it?
As the name suggests, information which is confidential and could be harmful to, e.g. a new launch if leaked. Even after launch, confidential information may be important as a means of keeping the exact formulation secret.
Note that once an idea is recorded (in e.g. pitch documents, artwork etc.), there may well be copyright in those records, but it is important to note that there is no copyright in an idea—copyright will only arise in the expression and recording of that idea, so the laws which protect confidential information will be important.
What might it be relevant to?
Company details; product launches; idea generation; formulations which cannot be / have not been patented—most stages of the product life cycle will likely entail some degree of confidential information.
How do we protect it?
Non-disclosure agreements (“NDA”) will be key where any third parties are involved (such as manufacturers). It will also be important to ensure that all employment and contractor agreements contain adequate confidentiality provisions to provide contractual provisions. Taking practical steps such as watermarking all documents so it is clear from whom they originate can be helpful to track the source of a leak and plug it before it spreads further.
The fact remains, however, that once confidential information has been leaked there is no adequate remedy—the genie cannot be put back in the bottle. Legal action may be helpful to obtain injunctions, for example, helping to minimize the further spread of information.
Where there is an NDA, breach of contract is a potential ground for action. Where there is no NDA or other contractual protection, common law (i.e., law that has arisen as a result of court cases) may provide recourse if the information in question:
What are they?
Particularly relevant to the world of cosmeceuticals and highly sought after for the monopoly they provide, patents protect novel and inventive products or processes.
What might they be relevant to?
The product itself if it (or a key ingredient) is inventive or the process by which it has been made or by which it operates (in the case of e.g. mechanical facial cleansing brushes or UV light masks) is inventive.
How do we protect them?
Applying for and obtaining patents can be a costly process, both in terms of time and money. Patent protection is available where an invention is:
Patent protection, as a general rule, lasts for a maximum of 20 years, and it gives the owner:
What are they?
Domain names are the electronic addresses for websites (not the website or website content itself). They can be bought and sold like other types of IP right.
What might they be relevant to?
Brand websites.
How do we protect them?
Domain names can be purchased from the relevant domain name registrar. Ownership of a trademark registration for a particular word or phrase does not automatically guarantee that you will be able to obtain a domain name which contains it. Domain name operators (e.g., Nominet for <.co.uk> domains) have dispute resolution procedures which can provide a means of securing the desired domain names based on e.g., prior trademark rights.
Read the full series:
