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patent in the FMCG

Patents in FMCG

Fast Moving Consumer Goods

In today’s era, consumer goods are going around the market and manufacturing at an expeditious and large scale. The term FMCG refers to Fast-moving Consumer Goods, which is the largest segment of consumer goods. FMCG sector is the fourth largest sector in the Indian Economy where personal care and household accounting for 50 percent of FMCG sales in India[1].

Companies utilize the patent system to protect their products in their respective jurisdiction and by doing so, these companies have more leverage with the supermarket and the retailers they supply.

Basically, the fast-moving consumer goods are divided into three categories:

  1. Durable Goods
  2. Non-durable Goods
  3. Services

These goods have a limited shelf life, perishable in nature, and are sold quickly but at a relatively lower cost due to high consumer demand. (Example: packed food, soft drinks, etc.). 

Patents and FMCG Sector

The FMCG Sector all in all is imperative to analyze at this juncture because of the high volumes of sales involved in this industry at any stage during a specific point of time. In the FMCG Sector, the profit earned on an individual component isn’t a lot but the gross profits which are so maid in this regard is exceptionally good.

On the other hand, patent law plays an important role in providing the exclusive right to the inventors over their inventions[2] which are so capable of industrial application, are novel or new in nature and have an element of inventive step in it.[3] Such an invention would be qualified to be granted a patent if the specific invention has a written description. In India, the patent law is regulated by the Indian Patent Act, 1970.

The patenting of the products in the FMCG Sector is an incredibly strenuous deliberation. The patents are used generally at the product development stage.

In today’s era, several corporations are working towards proving their goods distinctive element from that of the present state of prior art in the market. The same can be understood well through the case study of consumer goods giant Colgate-Palmolive. The corporation worked on getting a European patent of the age old Indian traditional knowledge. It was an attempt to patent a mouthwash formula containing herb extracts, used in traditional medicines to cure oral diseases.[4] In the pertinent situation, the statement released by India (CSIR-TKDL) enunciated upon the aspect of “Traditional Knowledge Digital Library of Council of Scientific & Industrial Research (CSIR-TKDL) had submitted proof in the form of references from ancient books, which said the herb and its extracts of Myristica Fragrans were used for oral diseases in Indian systems of medicine”.[5]

The role of IP in the FMCG Industry is quite extensive and majorly free from discrepancies. The types of patents that are relevant in the food industry are utility patents. They can be obtained for a food recipe, food composition, or cooking techniques. The case of Tata Global Beverages Limited and. Hindustan Unilever Limited proves to be a testament to the discrepancy in patenting through the use of a process for the preparation of flavored herbal tea. However, at this juncture, the plaintiff failed to get a patent on the method of preparation of the herbal tea.[6]

In consonance of the same, there is also the Food Safety and Standards Authority of India, which is regulated by the Food Safety and Standards Act, 2006. It works or mandates upon the aspect of the level of food safety in India.

However, there is a totally unexplored arena of cosmetic products as a part of the FMCG products. The drugs and cosmetics in India are governed by the Drugs and Cosmetics Act, 1940.[7] The specific provision also enunciates upon the aspect of the tussle of approval between the Registrar of Patents and the Central Drugs Standard Control Organization (Directorate General of Health Services).

Convoluted prism of patentability in FMCG

The admixture of the patent law and the FMCG Sector has the ability to create a convoluted web. Protection to the patent that is so granted at this juncture is for 20 years which is not in proportion to the fast scale of retail markets that the FMCG is associated with. The short shelf life is also not helpful at this juncture. Usually, the corporations which are involved in the FMCG Sector endeavor to take protection under Trade Secret Laws. One of the classic examples of the same is the formula of Coca Cola. Coca-Cola made a choice to brand the recipe of the aerated drink as a trade secret.

The inference of the trademark law in the specific domain is highly imperative as corporations highly rely upon their trademarks and brand identity to sell their products. Again the Coca-Cola Corporation has worked on protecting its trademark, it has worked to such a great extent that today the consumers can easily identify the red and blue circle as a sign of Coca-Cola.

Conclusion

The aforementioned deliberation clearly brings forward the overlapped level of protection that is associated with FMCG.  Also, when it comes to entering the market, a lot of FMCG relevant brands and products face challenges. The issue lies with the duty to adhere to the minimum defined standards and innovate something new that is for the ultimate benefit of the economy. In conclusion, adequate IP protection enables the rights holder to cope with the constant changes in the FMCG sector leads to effective economic growth and effectiveness.


[1] https://www.assocham.org/defaultpage.php?pageId=139

[2] Section 2(1)(j) of The Patents Act, 1970.

[3] Article 27 of The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), 1995.

[4] EP2689806.

[5] India Foils Colgate-Palmolive Bid to Patent Nutmeg Mouthwash, Press Information Bureau, Government of India, Ministry of Science & Technology, Government of India, (Updated on July 16, 2015). {https://pib.gov.in/newsite/PrintRelease.aspx?relid=123331}

[6] Sajan C Kumar, Tata Global Beverages fails to get patent for herbal tea, Financial Express, (Updated on November 07, 2015). {https://www.financialexpress.com/market/commodities/tata-global-beverages-fails-to-get-patent-for-herbal-tea/162535/}

[7]  Section 18 of the Drugs and Cosmetics Act, 1940.

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