Transparency and Intellectual Property Protection – creating balance for the future
The current need from regulators and civil society for increased transparency regarding ingredients used in consumer products presents a difficult and perhaps unique dilemma for the fragrance industry: how can we satisfy the need for more ingredient information whilst protecting our intellectual property?
The fragrance industry creates scents that bring added value to thousands of products and provide pleasure and benefits to peoples’ everyday lives. Products such as washing powders, fabric softeners, detergents, air fresheners, personal care products and fine fragrances all contain a fragrance formula. This formula is a mixture of fragrance materials and can contain anything from 20 to 200 or more different ingredients from a palette of over 3000, blended to create the perfect scent required for the product. A great deal of time, expertise, money and effort goes into developing the fragrance formula, which is extremely valuable and considered as a trade secret. $0$0Valuable as a formula may be, legally it is considered as ‘artisanal’ and therefore cannot be protected. Because of this, historically the fragrance industry has closely guarded the secrets of its formulae, only disclosing the ingredients under strict confidentiality agreements. Now, however, there is pressure from regulators and civil society groups for the fragrance industry to disclose some or all of the ingredients of a fragrance formula for any given product. $0$0In principle the fragrance industry accepts the need to know what is in products. It is generally understood that consumers are more aware of health and environmental issues and they wish to make informed choices about the types of products they use. The problem is how does the fragrance industry protect its intellectual property and still reveal the ingredients of the formulae if the formulae cannot be protected?$0$0Over the years there have been court cases based on the counterfeiting or copying of a fragrance. Recent cases have been won under existing intellectual property laws but the focus was rarely on the fragrance formula being copied but more often than not on the packaging and branding being copied. The fragrance industry would like to see some sort of similar protection afforded to the formula, if not through a patent, perhaps through an alternative legal mechanism. If a fragrance itself has been copied, this can be established using a combination of chemical analysis, olfactory expertise and consumer testing. $0 $0Legal confusion$0There is a case pending in France between Lancome Parfums & Beauty and Cie & Argeville for the alleged counterfeiting of the well known fragrance ‘Tresor’. This case illustrates well the confusion among the legal profession both in France and internationally on how to treat the intellectual property of a fragrance. $0$0At first Lancome lost its case for copyright infringment in the original jurisdiction. However, they then won in front of an Appeal Court in Aix-en-Provence, which ruled that a fragrance is an olfactice piece of art and therefore a unique expression of the authors (perfumer’s) creativity. In a further twist, this decision was quashed by the Supreme Court on January 22nd this year and the parties will now be back in front of a new panel of magistrates of the Aix-en-Provence Court of Appeal in October to again plead for copyright protection for fragrances.$0$0These procedings have an international impact due to a prior ruling in the Netherlands granting copyright protection to fragrances. The discrepency of opinions in French law and the precedent in Dutch law threatens the creation of a uniform European legal position.$0$0This discrepency in opinions can really only be attributed to a lack of understanding, between the differing jurasdictions, about the creation process of a fragrance and the necessary creativity involved on the part of the perfumer.$0$0To try to bring some clarity to the issue, IFRA has filed an ‘Amicus Curaie’, which amounts to written comments to the Court, in this particular case. These comments are intended to explain four key aspects of the issue to the judges; (i) the creativity linked to the composition of a fragrance; (ii) the intimate bind between the fragrance and its creator; (iii) the industry’s economic interests that depend on copyright protection and finally (iv) the lack of relevance of the arguments against copyright protection for fragrances.$0$0IFRA took this step because of the increasing importance of protectng the confidential business information of the fragrance industry on a worldwide basis. Trade secret protection is becoming increasingly challenged by ‘full disclosure’ and ‘transparency’ requests by various NGOs around the world as well as the now easy access to highly sensitive analytical tools. Existing patent law protects technologies and ingredients but not the full formulae and the fragrance itself and any protection gained through unfair competition or misappropriation law is insufficient.$0$0What does transparency mean?$0The protection of the formula is one aspect of the debate. Another is what constitutes transparency? As an industry how do we respond to the calls for ‘full disclosure’? It is not practical to list what could be anything from 20 to 200 ingredients of a fragrance formula on the product packaging, so how will this information be supplied? Via the internet? A telephone hotline? It is easy to publish a list of chemical materials, which IFRA has already done on its website, but what will it mean to the consumer? $0$0Again the fragrance industry will need to work together, as it did for the development of its Safety Program, which inlcudes the IFRA Code of Practice, IFRA Standards and the IFRA Compliance Program. $0$0Solutions need to be developed that address the need for greater transparency whilst ensuring the continued success of one of the most creative, innovative and successful industries by enabling it to protect its intellectual property.$0$0IFRA has already started this process and recently altered it’s Code of Practice to include a protocol for the protection of intellectual property.$0$0Whilst this approach provides a framework for the industry to help protect itself from copying trade secrets within its own industry it does not provide legal protection for those operating outside the IFRA membership and its Code of Practice.$0$0IFRA and its members will continue to analyse this issue and reach out to our stakeholders to find practicable solutions. Consumers need to continue to have full confidence in the contents and safety of their products whilst allowing a thriving innovative industry to continue to prosper and bring pleasure and wellbeing to people all over the world. A balance for the future is required.