Know-How Exchange : Strategy

Barbara,

There are a couple ways to proceed with this situation. First, if you believe that existing or potential competitors can modify your packaging scheme and get around your patent, then patent all the variations you can think of. This is a variation on classic patent strategy - one often used by the Japanese. They take a product patent and create a blanket it with application patents so that no one can use the actual product without stepping on a Japanese patent. Using this in your case, you come up with every possible variation on the theme you can come up with. In addition, patent packaging equipment, product display equipment, and anything else you can think of. Hire a very good intellectual property attorney who can help you with this task. Yes, it will cost you some money to tie this up, but, as you said in your question, you'll have high sales if you do this right. Do it right.

The other way to do this costs big bucks too. Get the product out fast and in a big way. Move so fast and develop your brand image that you become synonymous with the product. Think Kleenex versus tissue. When one thinks of this concept, they think your brand. Work quickly to control the mind share. As you may be aware, this takes spending much money on a highly integrated promotional strategy including all medias, press releases, endorsements, etc.

Whether you pick one strategy versus the other depends on the estimate of the cost of each versus the effectiveness you would anticipate. If you believe you can identify enough intellectual property to blanket your product from competition (and you are willing to press litigation for offenders - at a cost), then you can figure the the cost by talking with an intellectual property attorney. You can do some surveying to test how much you'll have to spend on promotions to achieve your results.

Then, we come to the other part of your question: How to get a major brand to buy it (versus launch it yourself). If you have all the intellectual property tied up, then you can network your way in to decision makers. This makes it easier because you don't have to make the sign non-disclosures on the idea - just the preliminary marketing proposal you present to them. You can actually show them the product and even some customer sample results - and let them see the projections. Then, you negotiate licensing.

I hope this helps.

Wayde

Thank you for your response.

In the US, we have design patents and utility patents, so I"m not sure to which you are refering when you say "product" patent and "application" patent. It sounds like, when you say "product", you mean the "design," and when you say "application," you are referring to a utility patent. Is this correct? I'm wondering if the utility of packaging the product would pass the obviousness test, and whether the only protection available to us is design patents for each of our packages.

We do plan to talk with an intellectual property attorney about our packaging to make sure we get the proper protection, and get her advice about the possible infringement of the brand. What I'm looking for here is some inside info from someone who may have done something simliar - repackaging a known brand into their new product. How did you handle the trademark issues?

It's important to use the name of the candy that would fill the packaging, and want to make sure we don't infringe on the brand's trademarks by doing so. At the same time, we want the brand to understand how valuable this new packaging can be to them, and furthermore, that they won't take our product and run with it themselves.

Thank you for your response.

In the US, we have design patents and utility patents, so I'm not sure to which you are referring when you say "product" patent and "application" patent. It sounds like, when you say "product", you mean the "design," and when you say "application," you are referring to a utility patent. Is this correct? I'm wondering if the utility of packaging the product would pass the obviousness test, and whether the only protection available to us is design patents for each of our packages.

We do plan to talk with an intellectual property attorney about our packaging to make sure we get the proper protection, and get her advice about the possible infringement of the brand. What I'm looking for here is some inside info from someone who may have done something similar - repackaging a known brand into their new product. How did you handle the trademark issues?

It's important to use the name of the candy that would fill the packaging, and want to make sure we don't infringe on the brand's trademarks by doing so. At the same time, we want the brand to understand how valuable this new packaging can be to them. And, finally, we want to position ourselves so that they won't take our product and run with it themselves.

To be honest with you I think you have to assume the only thing you have which is "protectable" in this case is whatever brand you are going with as it sounds at though you are working with a candy commodity...say peppermints.

In this case you will be knocked off quickly if it happens. I think you have to look at something like the fairly new "5 Gum". They took an old idea of strips of gum and repackaged in a unique way, then launch quickly.

This company got first to market, got premium shelf space and delivered significant share gains and created a buzz on the impulse side.

Now you have quickly seen the competition respond with similar packaging for some of their other brands. Speed to market is your friend on this one...in my humble opinion, assuming I understand your proposition.

Yes, I am in the US also. The terms I used are outdated now and industry specific. Sorry for the confusion.

A clever and aggressive intellectual property attorney should be able to find an angle for the utility patent. Yes, it's "packaging a product" - but apparently in a unique way that hasn't been done before.

As far as the trademark issues are concerned, I'm almost positive you will run into problems using the existing product name in your name. To be able to do this, you are going to have to seek the brand's permission and most likely share your profits. But, I'm not an attorney, I'm a marketing professional (with a design engineering manager background). You may find someone here who has had the exact experience you are seeking, but, that would be a long shot. And even if you do, I wouldn't take much stock in it, unless they happen to be an intellectual property attorney and are willing to back their opinion formally, you're best shot is working with your attorney on this.

Regardless, I wish you luck with your idea/project.

Wayde

I read the comments so far, they are all correct to a point.
The bottom line from my experience, is that is no such thing as 100% legal protection. Doing what you want to do carries a risk, no matter how good your legal defense is.
It all depends on your competitors and their willing to copy you, your design, infringe on your category, penetrate the ownable brand property you have, and decide that it is good for them! etc.
I have done similar things in the toothpaste category, redesigned the packaging of a multinational brand, the product included new ingredients, and what not...the marketing support was not enough, and that brand is now gone from many markets.
One comment here was true, but also limited. If you become a household brand fast, establish your territory in record speed, control the distribution channels, only than you have a chance to make your competitors think that it will not even pay them to copy you.
Again, in our current market conditions, where the exclusivity and the life expectancy of any new product could be no longer than six months, its hard to guarantee any total security by any means.

Ilan is quite correct - no guarentees. That's why I recommended both intellectual property protection and fast market penetration - together. And with respect to intellectual property, you have to be willing and able to spend the money on prosecuting the folks who infringe on your IP or your investment in it isn't really worth anything.

btw - IP is a part of your strategy, not a single event. So if you want to make a business out of this, you will have to plan to come out with other products and other packaging ideas that turn into IP.

Otherwise, row the dice, approach a brand with the idea, and hope they will license the idea from you at an attractive price, cash in, and run onto the next thing.

Wayde

I think I threw you a curve when asking my question.

The name of our product does not include the brand name. That would be outright infringement.

We do need to use the name of the brand candy when promoting the product, so people will know what is in the package. The packaging would have to include the name of the brand candy for the same reason.

The promotion around this package includes letting people vote on which candy goes in the package, so of course, we would have to use the brand name, or how would they know what they are voting for?

For instance, it could be as simple as "Square box with peppermints(tm) or chocolate bar(tm)" Which do you choose?

Does this make a difference?

Barbara,

Thanks for clarifying. I understand better now. But, I do have a couple other questions:

Is the candy in its original package and you are reselling it in your "over-package?" So you are buying, say, M&M's in packages and then putting the packaged M&M's in another package and reselling it? I'm not absolutely positive about this - I still recommend you talk with an IP lawyer (they are usually versed in trademard and copyright law as well as patents) - but I believe you can license the brand from the manufacturer for the purposes of promotion for resale. I believe this is a common license arrangement - every grocery store is allowed to advertise M&M's. The issues here is that you will want the license to be transferrable to other retailers (if they aren't already licensed to promote M&M's) and since you may be subjected to a license fee from the brand - where as a retailer is part of the "channel" and wouldn't pay a licensing fee. You probably can find a few people on here who have this kind of experience.


Wayde

No, we wouldn't take a package of candy and put that package inside ours. We already buy this product bulk from the local distributor and package it for resale. I know we can put the product in any packaging we want.

My main concern is building a promotion that incorporates their brand named product, and being open to the risk that the manufacturer will want to take the promotion away from us. My dream is that they will like the promotion and want to pay us to run it themselves.

If you buy it in bulk can't you remove the brand name from the product itself?
For example, if you buy Life Savers, you may be able to move the embossed "Life Savers" from the product but keep the shape and the colors intact.
That will immediately keep the brand association without the legal issue.
If that is what you are talking about, you can come up with any name you want that doesn't include the words "life" or "savers".
So far its very simple.
What is not clear here, is the relationship you have with the manufacturer from which you buy the product in bulk...you say you buy it from a local distributor. This alone adds a risky proposition, and you have to know all the legal aspects of his relationship with the manufacturer.
Who is he and what is the relationship he has with the brand name, the ownership of the brand name, the distribution channel rights etc.

I agree with matthewanxa, this is not a patent issue. I appreciate your insight. I also appreciate the additional research wnelson went to in order to ask my question. wnelson, that PDF is exactly what I was looking for.

Thank you to everyone for a lively discussion, and for taking the time to help.