Discover What Legal Challenges FMCG Lawyers Face
Legal teams in the FMCG sector need to balance a number of challenges. They need to be responsive and scalable in order to deliver cost-effective results.
Managing supply chain risks is another challenge. One risk is sourcing high-quality raw materials. This may pose difficulties, especially if the company is expanding into new markets.
Licensing and Intellectual Property
One of the most important aspects of any FMCG business is ensuring that the intellectual property (IP) that underpins its products and brands is not only fully protected but also working as hard as possible for the company. This is where the specialist trade mark attorneys, IP solicitors and patent attorneys in our specialist FMCG team can really add value for their clients – whether they’re a long-established heritage brand or a growing business looking to take advantage of the new economic realities.
This includes trademarks, which are essential to the success of any FMCG business. As the sector is global in nature, registering and enforcing FMCG trademarks in each jurisdiction can be a complicated task. However, a well-designed strategy can minimise the risk of infringement and counterfeiting as well as make it easier to enforce if the need arises.
Another issue facing FMCG lawyers is the dilution of business marks. Given the fast-moving nature of the industry, it’s easy for once-influential business names to be diluted into generic terms. As a result, FMCG enterprises need to communicate effectively to ensure that any changes in packaging and decoration designs or product names are promptly followed up by registrations to avoid a loss of protection.
Additionally, FMCG brands often face challenges when it comes to securing their patent rights. As the name suggests, a patent is an exclusive right for a limited period. The duration of this period varies across jurisdictions. For example, it’s common for grey market imports to materialise in marketplaces without the rights holder’s knowledge.
Once discovered, these unauthorised goods can be difficult to track. They may also be sold by companies that have not obtained the appropriate licences to sell the goods in question. This can have a significant impact on the reputation and goodwill of the brand in question.
FMCG lawyers need to stay on top of the latest compliance requirements in each jurisdiction where they operate, as this is an area where a misstep can have devastating consequences. It’s particularly challenging for FMCGs that operate in multiple markets, which often means coordinating compliance activities across different departments and teams.
Regulatory Compliance
FMCG brands have a reputation for being fast-paced, which is why it’s important that their legal teams are responsive and agile enough to respond quickly to market fluctuations. They need to balance maintaining a high-speed supply chain with the need to ensure that their products are complying with ever-changing regulatory requirements.
As the global business landscape continues to evolve, regulatory compliance issues are more prevalent than ever. Companies must comply with a wide range of laws and standards that govern the production, labelling, and packaging of their goods, as well as environmental sustainability and ethical business practices. The challenge is that new laws and standards emerge constantly, resulting in an exponential increase in legal compliance obligations.
In order to keep pace with regulatory compliance challenges, FMCG lawyers must stay on top of emerging technologies that enable them to optimise their supply chain operations. This will help them to meet regulatory obligations while also fostering a culture of innovation and sustainability within their organisation.
Another common regulatory issue facing FMCG businesses is the threat of counterfeiting. These products are typically of poorer quality than the originals and often misrepresent the brand name or image in a way that damages their brand equity. This has become a significant challenge for FMCG businesses and can damage the overall credibility of their established brands, and with that, it does become vital to consult with an FMCG consultant.
Counterfeiting is a serious problem for the FMCG sector because it can lead to significant losses. It may also compromise consumer safety and health and affect the goodwill of the brand. To prevent these problems, it’s essential that FMCG companies prioritise the protection of their product names, company names, and packaging designs during the early stages of market entry.
Moreover, they should always ensure that the trademarks used in their products match those registered by the rights holder. In the FMCG industry, rapid changes to product packaging and decoration designs can result in discrepancies between the trademarks used and those registered if the company fails to communicate updates or register them promptly. As a result, they may lose the right to use the trademark for their products.
Data Protection
In a business landscape where data is transforming the way that companies do business, FMCG lawyers must ensure that their clients can use and share consumer data with confidence while complying with applicable privacy and security laws. They must also keep up with constantly changing regulations, including the recent adoption of GDPR and California’s Consumer Privacy Act (CCPA).
The collection, processing and sharing of personal information presents serious compliance and legal issues for FMCG companies and consumers alike. In the US, the lack of a comprehensive federal law that protects all types of private data has resulted in a patchwork of state laws that offer varying levels of protection to consumers. In addition, reported data breaches and cyberattacks are at an all-time high.
As a result, the demand for privacy and security by both consumers and businesses continues to grow. Consumers want to know how their data is used and are increasingly unwilling to do business with companies that do not clearly communicate their data-privacy practices. Some are even willing to “vote with their feet” by boycotting companies whose privacy practices they do not trust or agree with.
In response to the growing need for data protection, many states and the federal government have passed new laws that require companies to be transparent about their data-privacy policies and give consumers the right to opt out of their collection and use of personal information. In addition, some technologies, such as facial recognition software, raise questions about the potential for discrimination against racial or political groups.
Duane Morris regularly handles these and other issues related to data privacy and cybersecurity, including advising clients on a variety of regulatory matters, preparing for data breach responses, and advising on a wide range of internal practices and policies that help our clients achieve and maintain compliance with the latest domestic and international data regulations. Our attorneys are skilled at preparing and implementing compliance programs for both large and small global organizations, as well as assisting them with ongoing issues and concerns. We have a team of multidisciplinary professionals dedicated to understanding our clients’ unique business models and needs so that we can provide individualized advice that addresses the specific legal risks they face.
Social Media
FMCG is an incredibly broad term that encompasses everything from food and drink to fashion and clothing through to household cleaning products. Regardless of the specific product range, however, one thing that all FMCG brands have in common is their incredible value as global assets. To ensure that these brands retain their value, it is essential that they are fully protected through stringent IP policies and enforceable rights.
To achieve this, lawyers should be mindful of the ethical rules that apply to social media. While the ABA’s Model Rules of Professional Conduct offer some guidance, New York’s rules of ethics also offer a strong legal basis for the strict ethical limitations that apply to social media use by attorneys.
In a social media landscape where consumers are more informed than ever, it is important that law firms have an effective strategy in place to protect their clients’ interests and reputation. By avoiding any content that could potentially be construed as advertising or promotional, and by using their networks to promote only well-researched, insightful articles and cases, lawyers can ensure that they are acting in accordance with the ethical rules.
Furthermore, by ensuring that they are properly protecting their clients’ confidential information, lawyers can avoid any potential conflicts of interest. The proliferation of social media and electronic communication has allowed all professions to perform better, communicate more effectively and deliver advice and agreements within an exceptional timeframe. However, this has also brought with it new legal challenges.
To meet the challenges of modern business, law firms must ensure that they have an up-to-date and robust IT infrastructure that supports their processes, data protection obligations and compliance with regulatory requirements. In addition, it is vital that they are constantly evolving and adapting to stay ahead of their competitors.
Potter Clarkson’s team of trade mark attorneys, IP solicitors and patent attorneys is highly experienced in advising FMCG clients on all aspects of their businesses. From registering new products to safeguarding existing trademarks, our specialists can help you to build and maintain a brand that is both distinctive and recognisable.