Free-from controversy? IP disputes in the health and wellness foods market

Data provided by Mathys & Squire has featured in an article by Managing IP analysing the increase in demand for free-from foods and the subsequent surge in legislation.

An extended version of the release is available below.

Increased consumer demand for free-from food and drink products, such as non-dairy milk, low or no-alcohol and meat alternatives has seen a raft of new products hit the market in recent years. This change in consumer demand is driven by health concerns and increasing food sensitivities, as well as concerns over the impact of traditional meat and dairy products on climate change, and even long-distance transportation.

Given the huge potential for revenue growth in this market, which is expected to hit $1 trillion by 2026, established free-from brands, new entrants and makers of more conventional products will be fighting for market share. Unilever has announced plans to grow its plant-based meat and dairy products business five-fold to €1billion by 2027.

In an increasingly hotly contested space, brands such as Oatly and Impossible Burger have resorted to legal action over alleged breaches of their intellectual property in a bid to protect their market share. As the market grows, what considerations do brands need to take on board when pursuing litigation?

Assessing potential risks to your IP

On 9 March 2022, Impossible Foods Inc started infringement proceedings against Motif FoodWorks based on its US patent, US 10,863,761. According to Impossible Foods, when starting out, they had a team of researchers analysing which biological molecules make meat look and taste the way it does. As a result, it was discovered that a hemoprotein molecule, soy leghemoglobon (LegH), could be incorporated into plant-based products to provide meaty aromas and create the appearance of “bleeding” in a burger, similar to that of traditional beef products. Impossible Foods state that this molecule is a key ingredient in its products.  

The action brought by Impossible Foods centres around Motif’s sale of HEMAMI^TM – a bovine myoglobin composition which Motif’s website states “tastes and smells like meat because it uses the same naturally occurring heme protein”, along with burgers produced containing the HEMAMI^TM molecule. Impossible Foods claim that Motif directly infringe their patent (through the sale of the burgers) and indirectly infringes their patent through the sale of HEMAMI^TM – as Motif are considered to “actively encourage its business partners to make, sell and/or offer for sale the infringing burger”.

Claim 1 of US 10,863,761, refers to “a beef replica product, comprising:

• a muscle replica comprising 0.1 %-5% of a heme-containing protein, at least one sugar compound and at least one sulfur compound; and

• a fat tissue replica comprising at least one plant oil and a denatured plant protein, wherein said muscle replica and fat tissue replica are assembled in a manner that approximates the physical organization of meat.”

In response, Motif FoodWorks has now filed a petition with the USPTO’s Patent Trial and Appeal Board to request that the validity of the Impossible Food’s patent be reviewed. It would appear that Motif’s arguments are that the use of heme proteins in meat substitutes was known prior to the filing of this patent.

Motif’s actions in the circumstances are unsurprising and it is essential for companies to critically assess their own IP before commencing any form of contentious action. This ensures companies are aware of and can prepare for any potential attacks against their IP once proceedings begin.

Assess potential damage to reputation

In the June 2021 UK High Court case, Oatly AB/ Oatly UK Limited asserted that Glebe Farm Foods Ltd’s oat milk product, PureOaty (shown below,) infringed five of its registered trade marks, including three word marks (OATLY, OAT-LY! and OATLY) and two device marks (a blue OAT-LY! carton mark, shown below, and a grey OAT-LY! carton mark).

However, the judge dismissed this case stating that “there is no likelihood of confusion between the PUREOATY sign and carton and any of the Oatly trade marks”.

The decision to bring proceedings against Glebe Farm Foods (a significantly smaller competitor), resulted in negative publicity and a social media backlash with respect to the Oatly group. In particular, Oatly received media commentary accusing it of hypocrisy, often based around its 2020 investment from private equity fund Blackstone, which has been linked to deforestation.

While Oatly may have felt it had no choice but to take action against Glebe Farm, as failing to defend trade marks could open the door for other brands to enter the marketplace, the ultimate decision of whether to pursue a third party needs to be weighed up carefully against any potential long-term reputational damage in the marketplace.

A further dispute, relating to the ownership of US 11,058,137, is ongoing between two meat alternative startup companies, Meati Foods (previously Emergy) and The Better Meat Co.  Co-founders of Emergy.

Tyler Huggins and Justin Whiteley claim that, while conducting research at the U.S. Department of Energy’s UChicago Argonne National Laboratory (“Argonne”) in Illinois, they developed a new mycelium cultivating process (mycelium being the vegetative part of a mushroom consisting of a mass of branching, fibrous filaments called hyphae), which allowed the cultivated material to maintain a fibrous filament structure. Dr Huggins and Whiteley then went on to assess the use of this material as a meat alternative product. During this time Augustus Pattillo assisted in this research and had access to relevant confidential information before gaining employment at The Better Meat Co. Meati have accused The Better Meat Co. of basing their patent, US 11,058,137, which names Mr Pattillo as an inventor, and their filamentous fungi-based meat alternative product, ‘Rhiza’ on misappropriated trade secrets, as well as proprietary and confidential information belonging to Meati Foods. Meati Foods has requested that US ‘137 be assigned to their company. In response, The Better Meat Co. asserts that the action is simply an attempt to bully a less funded rival within this field. The issue of who owns such information will likely be key as well as the legal agreements and recorded information available from that time.

Given the rapid growth and potential size of this market, it is quite clear that the potential IP clashes will grow considerably in the coming years. However, given the expense of litigation proceedings and potential issues with respect to brand reputation, consideration should be given to other ways of settling disputes.

Alternative means of dispute resolution

For companies who find themselves embroiled in an intellectual property dispute but would prefer not to proceed down the litigation route, there are a range of options at their disposal which could be cheaper, faster and/or more discrete compared to full-blown litigation. For example:

• Offer to buy a licence: Short-term this may be a cheaper option, whereby firms offer to pay an annual fee to continue to use the contested IP.
• Purchasing IP rights: This can be more costly than licensing, especially up front, but brings the advantage of long-term security.
• Opting for mediation: Mediation uses an independent mediator to try and help resolve disputes without requiring court proceedings. This has obvious advantages for smaller players but may also offer advantages to large corporates too. This is especially the case if the IP which they claim is being infringed is not core to their business and they would like to enforce their rights without investing too much time and money. They may also be more likely to agree to mediation if they are less sure of the outcome.

All companies looking to make their way in the field of no/low products need to have a commercial strategy with a number of options should a third party seek to lay down a challenge.

Companies looking to develop new products and protect new and existing IP in this rapidly growing market should make sure they are as informed as possible on the latest IP law developments. With the right knowledge and expert advice they can ensure their products are indeed free from controversy.