Scaling Your Business through Partnership

I recently had the privilege of attending an educational workshop as part of the Oregon Entrepreneurs Network (OEN) Angel Food Conference and Education Series 2019. The workshop centered on the topic of scaling up businesses in the food and beverage sector.

Being a food science graduate and getting to work in food and beverage related patents, I was excited to learn about challenges for food and beverage businesses as they begin to grow. Discussion ranged from production to distribution to financing. No matter the topic, however, one of the central themes was finding partners that are the right fit for the various growth stages of your business.

These partners come in many forms, such as mentors, employees, co-packers, distributors, and financial institutions. And these partners can further include intellectual property (IP) counsel. Finding IP counsel that understands your business and how to serve your business as it grows is an invaluable asset. The right IP partners can help to protect your business in the early stages, maintain market share as it is growing, and help pave the way for future opportunities.

For example, at McCoy Russell LLP, we serve our clients through various growth stages by way of IP portfolio development, which takes a holistic point of view of our clients’ IP protection. In developing our clients’ IP portfolios, we work with our clients to understand the trajectory of their businesses. Then, with this understanding, we tailor their IP portfolio to support where their business is currently at, as well as the direction their business appears to be growing.

Bringing it home, scaling a business involves developing strong partnerships. Like any relationship, the best partnerships not only meet you where you are but help with where you are going.

Diversity in Patent Drafting

My Thanksgivings growing up were potluck-style, my family bringing traditional Persian foods, my aunt’s family bringing traditional Filipino foods, and everyone doing their best imitation on traditional Thanksgiving dishes. I’ve found that using a similar mindset can greatly improve patent drafting and prosecution. Unlike a more traditional patent law firm model where applications in a specific field are drafted by an individual who only works in that field, I’ve been exposed to different approaches with patent technology specialists having diverse backgrounds working with experienced attorneys who practice in a wide range of technologies. 

 

Why can this be advantageous?

Patent drafting inevitably requires some amount of learning. Inventions are, by definition, new and anyone other than the inventors is not an expert. Traditional firms might think it is beneficial to assign these inventions only to attorneys and/or agents considered experts in a particular field that seems closest to the new invention. However, they bring their own preconceived notions and experiences in a narrow field which may result in a tunnel-view of the problem and technical solution of the invention. When I work with a team having diverse backgrounds to prepare a new patent application, past experiences are used to deepen and broaden the scope of an invention and the scope of the description, thereby setting up the application to enable a diverse range of arguments in support of patentability. Interdisciplinary review ensures that the traditional aspects of the invention are described while strengthening the patent application as different eyes with different backgrounds learn the invention and provide their own spin.

 

From a legal standpoint, USPTO guidelines are continuously changing, further requiring attorneys and agents to, again, learn and adapt. My experience working in a collaborative team-based environment helps understand these changes from different points of view. For example, by being included in monthly continued legal learning events which include analysis of recent cases, I can get a better feel for the direction the USPTO is going and then adapt drafting strategies today for the USPTO guidelines changes of tomorrow.

 

The structure and strategy of a collaborative approach enables technical team members and legal team members to maximize their individual skills and the resulting patent application is more of a melting pot of these ideas due to the collaborative approach.Collaboration occurs not only during the searching, evaluationand drafting phases, but is also carried through during prosecution affording not only more robust patent applications with a smorgasbord of concepts with varying scope, but better ideas for developing a range of options to respond to Office action rejections by the USPTO. Inclusion of these types of diverse strategies in each patent application increases a client’s stronghold around technology, and builds a s

Skim Milk

Obesity is an epidemic in many countries, including America, resulting from a lack of exercise and poor diet. Commonly, people are happier when they exercise and eat right, not to mention their vitals (BP, HR, etc.) change to more desirable values. This logic applies to household pets as well; dogs are happier and healthier when sufficiently walked and fed appropriately. Therefore, it is safe to assume that livestock, such as cows, would also be happier when provided with a medium for exercise. However, cows are naturally dormant animals that enjoying grazing and relaxing. Commonly, farmers, whether dairy or cattle, arrange drinking water for the cows far away from their food, thereby forcing the cows to walk. However, this requires a large plot of land that could be utilized in other ways.

Large animal veterinarian, Arlan Smith, realized that animal husbandry costs may be reduced by providing a treadmill shaped to accommodate a cow. He claims that a variety of bovine problems may be preempted, such as lame cow syndrome, calving problems, digestive upsets, misplaced abomasum, infertility, and short lifespans.

FIG. 1 from U.S. Patent No. 7,654,229

FIG. 1 from U.S. Patent No. 7,654,229

The patent, US7654229B2, comprises a variety of features that are purportedly non-obvious with relation to human treadmills.  For example, it teaches an identification system coupled to a database of workout durations and frequencies.  It includes a trough, which may hold food or water, to prompt the cow to continue walking on the treadmill.  Most importantly, the treadmill has a plurality of rigid plates, that may fall away from end rollers of the treadmill - the rigid plates may both wear down the hoof, as well as sweep fecal matter away from inner componentry of the treadmill.  The poop may be further swept away from the plates via a flushing system, which injects water at spaces between adjacent plates. 

The concept of the application is quite interesting as animal husbandry becomes a larger issue in the discussion of global warming.  Methane produced from cow flatulence aside, animal husbandry is often knocked for its excessive use of land, which results in deforestation.  With the introduction of the cow treadmill, land use for dairy and other types of farming may be reduced, thereby decreasing an environmental impact of the farm while also decreasing operational costs and increasing cow health. 

Operation space with regard to this concept is open, as the application was abandoned due to nonpayment of maintenance fees. Further improvements may yield interesting IP. One idea includes designing the platform to include an endless track that include a grass-like surface, which may trick the cow into thinking it is still walking the pasture.Additionally, the treadmill may be modified to include arms configured to massage the cow as it strolls on the treadmill.Lastly, to promote socializing between cows, a treadmill may include more than one track so that cows may walk next to one another and discuss their plans for the day.

Making Every Cocktail Neat and Perfect

Learning cocktail making, as with many hobbies, has an inherent barrier to novices guarded by vexing terminology. What does it mean to “muddle” something? Is a “dash” the same amount as a “splash?” How can a cocktail be “dry?” Combined with an array of intimidating contraptions and an overwhelming abundance of complex, multistep recipes, it may be tempting to head out to the bar and put home mixology on the rocks.

Somabar® and other companies are seeking to change that. In the age of instant and facile domestic comfort led by smart home technologies, one patentable space remains sparse – the automated home cocktail maker. As can be surmised by anyone who has been to a novelty robot bar, automated cocktail making is known. For example, Smart Bar USA claims to market “the world’s first patented touch-screen bar and automated cocktail dispenser” (see U.S. Patent No. 8,584,900, wherein the inventors recognize “a lack of the ability to provide mixed alcohol drinks” via the beverage dispensing systems in the prior art).

However, Somabar® seeks to push through U.S. Patent Application Publication No. 2016/0039653 by linking the size of the invention to specific applications. The primary argument is based upon similar inventions in the prior art being six feet in height or taller, whereas a housing of the drink vending apparatus of the ‘653 application is “less than two feet in height.” The invention is therefore “small enough to fit on a standard kitchen counter and underneath standard kitchen cabinets,” as supported in the specification.

FIG. 1 below provides one embodiment of the drink vending apparatus of the ‘653 application. Liquor cartridges may be placed on the manifolds 128 to provide ingredients for a mixed drink. A glass may then be placed on dispensing tray 203 to receive the mixed drink as prepared by the apparatus. Tying the invention further to the smart home paradigm are its wireless capabilities; a mobile phone or tablet can operate the apparatus, from which a user can request specific drinks via an associated mobile phone application.

Bloomberg prices the Somabar® at $2000, which may be a little steep for the cocktail-curious. For now, at least, most amateur mixologists will have to suffice with their martinis shaken, not automatically dispensed.

robot bar.png

Reefer Madness

blur-cannabis-close-up-606506.jpg

The burgeoning marijuana industry is witnessing incredible growth as the previously forbidden fruit becomes legal in an increasing number of states.  While the public is quick to adopt its legalization, other sectors are slow to adapt and the USPTO is no exception.  

            Early internet patents predicting various ways in which the internet would be used are now viewed as overly broad and the USPTO has swung the pendulum in the opposite direction (hello Section 101 rejections). Marijuana patents appear to be in a similar phase; it’s hard to say what is overly broad for a new product.  However, unlike the internet, marijuana has been known and tested, with many experiments occurring in the last century.  This presents an interesting issue - companies may patent previously known compositions, strands, and the like with little consequence, for now, as documentation of marijuana experimentation was minimal and possibly incriminating. 

            One example of such a case is going through the courts.  United Cannabis Corp is accusing Pure Hemp Collective Inc. of infringing a patent covering a liquid formulation with a high concentration of CBD.  People in the industry believe that the United Cannabis Corp patent, if maintained, could apply to most of the CBD products on the market, despite the fact that highly concentrated CBD formulations have been known before this millennium. 

            The marijuana industry is expected to reach about $75 billion by 2030, and patents will play a large part in who the big players in the industry will be, meaning that patents may dictate who gets to compete for those billions.  It will be fascinating to see how the patent side of a laid-back, laissez-faire culture shapes.  Will there be enough documentation from decades of marijuana research to limit new marijuana patents?  With so much money at stake, it is safe to say patenting early and often should be high on the priority list for all marijuana companies. 

The Early Filer Gets the Poke

As poke restaurants grow in popularity across the United States, trademark conflicts have been rising to the surface. For example, “Aloha Poke Holdings LLC” out of Chicago, IL, known as “Aloha Poke Co” has already been granted a trademark on the words “Aloha Poke”.

fish-food-market-96379.jpg

            The Chicago-based poke company has wasted no time in defending their mark against competitors using “Aloha” or “Aloha Poke” in their name or marketing. At least one Washington-based company has already opted to change their name in response to a cease and desist letter from “Aloha Poke Holdings LLC”. Considering the close tie between the words “aloha” and “poke”, there are likely to be many other poke restaurants that will fall under fire.

            However, although “Aloha Poke Co” has been winning battles in defending their trademark, there has already been some negative PR over their aggressive protection for use of the word “aloha”.

            It goes to show that although the early filer gets the worm (or poke, in this case), it is still important to think through enforcement strategy.

Food and Beverage IP Still Highly Competitive Part II

There are many cases where a company may choose to file continuation applications. For example, in the food and beverage industry, a parent application may be directed towards a system for packaging food, and then a continuation application may have coverage on a method for packaging the food. This approach may have advantages for obtaining patent coverage on various aspects of an invention, while maintaining the benefit of an earlier filing date.

            As shown in the recent Nestle USA, INC. v. STEUBEN FOODS, INC. case, it is important to keep in mind that continuation applications may be subject to similar interpretation as related patent applications.

            In particular, a decision was recently rendered in favor of Nestlé with regards to an aseptic food packaging patent to Steuben Foods, Inc. (U.S. Pat. No. 6,481,468 B1).

            One of the main points that won the recent ‘468 case for Nestlé was an assertion that the Board erroneously relitigated the term “aseptic”. Specifically, the ‘468 Steuben Foods, Inc. patent is related to another Steuben Foods, Inc. patent (U.S. Pat. No. 6,945,013 B2) which Nestlé previously appealed.

            In the related ‘013 case, Nestlé had already submitted arguments during appeal against construction of the term “aseptic” in the ‘013 patent, and the issue was decided against Steuben Foods, Inc.

            Then, during prosecution of the later ‘468 Steuben Foods, Inc. patent, the term “aseptic” was interpreted differently than decided in the ‘013 patent. Thus, Nestlé won an appeal of the ‘468 patent based on arguments that collateral estoppel should have precluded relitigatation of the term “aseptic”.

            So, it goes to show that it is important to consider both current and related patent prosecution history when filing continuation applications. When patents are all in the same family, there is a chance that similar arguments and interpretations will apply.

Food and Beverage IP Still Highly Competitive Part I

A decision was recently issued at the Federal circuit level in a case between Nestlé Healthcare Nutrition, Inc. (Appellant) v. Steuben Foods, Inc. (Appellee). In the case, Nestlé attempted to invalidate a patent to Steuben Foods, Inc. directed towards systems for aseptic packaging of food products.

            The arguments submitted by Nestlé primarily asserted that Steuben Foods, Inc. improperly relitigated issues directed to the meaning of “aseptic” that were resolved in related patents.  

            Ultimately, the decision upon appeal was in favor of Nestlé to remand and carry out further proceedings, as collateral estoppel should have precluded relitigatation of the term “aseptic”. Therefore, it is still to be determined whether or not Steuben Foods, Inc. will be able to retain their patent rights.

            In any event, this case demonstrates that patents for innovations in the food and beverage industry are still highly competitive. Moreover, as discussed below, this case highlights issues to be aware of when prosecuting a child patent application.

Pabst and MillerCoors Taking It to Trial This Fall

Pabst Brewing and MillerCoors have been in a legal dispute over an impending 2020 contract renewal and will go to trial this November according to CNBC.

            MillerCoors has brewed for Pabst under contract for many years, making well-known Pabst beers such as Pabst Blue Ribbon (PBR).  However, MillerCoors may terminate their contract with Pabst in 2020, citing potential capacity issues.

            Pabst has a lot to lose and has already begun to fight hard against contract termination by MillerCoors. Among the potential losses for Pabst are intellectual property rights. Specifically, the trademark system is a use it or lose it system in the U.S., and Pabst could be at risk of losing trademark protection if marks go unused for too long.

            That being the case, if the contract with MillerCoors is terminated, Pabst may be in the expensive situation of quickly procuring a brewing facility, both to meet sales orders and to protect their trademark rights. Further complicating the situation, Pabst products are in the value beer category, making cost efficiency extremely important.

            Co-packers are common in the food and beverage industry and can be a great option for start-ups or businesses growing quickly. Co-packers may be especially appealing to brand-forward businesses, as the co-packers handle manufacturing details and allow businesses to focus on sales and marketing.

            However, when your business is brand-focused (as in Pabst’s situation), supply chain contracts are critical. Although supply chain and branding protection may not seem closely related, as discussed above, they directly impact each other.

            So, as you develop manufacturing agreements, take into account the intellectual property portfolio of your business. By taking this big picture approach, supply chain contracts may be proactively structured to reduce their impact on your intellectual property rights.

           

Coca-Cola Re-Imagines the Life Cycle of Citrus Products

            Re-purposing by-products is common in the food and beverage industry to both reduce waste and create additional value added products.

            However, Coca-Cola has gone one step further, recognizing that a citrus processing by-product may be used to make animal feed, and that a fiber by-product from making the animal feed may be extracted for use in paper products. Basically, Coca-Cola obtained a patent (U.S. Pat. No. 9,909,260) directed towards a method for using by-products of goods made from by-products.

            It goes to show that, with a little creativity, the life cycle of raw materials may extend far beyond their original use.