By Warren Scott, Partner
Food suppliers regularly make considerable investments in developing and protecting their brands, packaging and advertising. Unfortunately, it is not uncommon for a retailer to offer a private label with branding and packaging identical or similar to the original product.
The introduction of the Food and Grocery Industry Code of Conduct (Code) recognises the importance of a supplier’s intellectual property (IP) in its products. The Code provides suppliers with a formal complaint process for when a retailer has not respected a supplier’s investment in its brand, packaging or advertising. The ACCC also has powers to investigate breaches of the Code.
The ACCC recently announced the introduction of the Code. Although the Code is voluntary, it is expected that the dominant grocery retailers will sign on. Coles and Woolworths were closely associated with the development of the Code, and Aldi has ‘unequivocally’ agreed to be bound by the Code.
The Code provides a framework for interactions between grocery retailers and suppliers, with a particular focus on the conduct of grocery retailers. Of particular interest to food suppliers with developed brand portfolios, the Code specifies:
- The retailer must respect the IP held by suppliers in relation to grocery products, including IP in branding, packaging and advertising (section 24(1));
- In developing or producing own brand products, the retailer must not infringe the IP held by a supplier in relation to grocery products, including rights relating to branding, packaging designs or advertising (section 24(3)); and
- Other than for the purpose disclosed, the retailer must not use confidential information disclosed by a supplier and in connection with the supply of grocery products, product development, proposed promotions or pricing (section 25(2)).
Where the above provisions of the Code have been contravened, a supplier may direct a complaint to the code compliance manager of the retailer for review and action. The supplier also has the option of seeking mediation or arbitration of the complaint by the independent Institute of Arbitrators and Mediators. Importantly, the ACCC is responsible for regulating compliance with the Code, and can take enforcement action to enforce the Code. This includes any breaches by a retailer of the IP provisions or the complaints process set out in the Code.
The introduction of the Code reiterates the importance of suppliers seeking IP protection for their brands, packaging and advertising. Mills Oakley regularly provides advice to suppliers on IP protection, enforcement and commercialisation issues both in Australia and overseas, and assists them to maximize the return on their investment in innovation.
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