Navigating brand challenges in the nutraceutical industry in India

The article underlines the importance of trademark protection in a booming nutraceuticals market in India and explain what steps brand owners should take.

India has witnessed massive growth in the nutraceutical market in recent years. The pandemic heightened consumer interest in preventative healthcare and has transformed consumers’ habits and market behaviour with regard to healthcare products.

According to a 2022 report by EY India, the nutraceutical market in India reached INR 331 billion in 2021 (now approximately $4 billion), with a compound annual growth rate of 15%.

Given the increasing demand for nutraceuticals, the branding of such products assumes even higher importance.

1) Regulatory framework for nutraceuticals in India

The manufacturing, storage, distribution, sale, and export of nutraceuticals, health supplements, and functional and dietary foods are outlined under Section 22 of the Food Safety and Standards Act, 2006 (the FSS Act, 2006) and are regulated by the Food Safety and Standards Authority of India (FSSAI).

Nutraceutical manufacturers, importers, distributors, retailers, wholesalers, and transporters must obtain a licence from the FSSAI. Furthermore, standards, licences, and approvals to be obtained for health supplements and nutraceuticals are covered under the Food Safety and Standards (Health Supplements, Nutraceuticals, Food for Special Dietary Use, Food for Special Medical Purpose, Functional Food and Novel Food) Regulations, 2016 (the FSS Regulations, 2016).

The FSSAI has recently introduced a new framework for nutraceuticals under the proposed FSS (Health Supplements, Nutraceuticals, Food for Special Dietary Use, Food for Special Medical Purpose and Prebiotic and Probiotic Food) Regulations, 2022, replacing the FSS Regulations, 2016.

The new regulations expand the category of goods from tablets, capsules, liquids, semi-solids, pills, jellies/gels, and sachets to drops, gummies, chewable and orally dissolving strips, bars, biscuits, and candies. They cover supplement guidelines for children above two years’ old, as opposed to above five years, as in previous regulations.

Nutraceutical manufacturers previously had to obtain permission from the FSSAI for every product that was not covered under the FSS Regulations, 2016; now they can just comply with the new regulations. The new regulations aim to remove ambiguity in the earlier regulations in terms of nutraceuticals.

2) The importance of trademark protection in the nutraceutical industry

Given the rapid growth of the nutraceutical sector, investment in intellectual property (IP) assets is rising.

Trademarks, as a source identifier of a product, are a highly valuable IP asset for a nutraceutical company and a source of trust among consumers and trade members. A trademark may include a brand name, logos, slogans, and taglines used for products, and even the trade dress, get-up, and packaging of products.

3) Trademark challenges faced by nutraceutical start-ups and possible solutions

Trademarks, copyright, and the get-up of the product packaging play an indispensable role in the success story of a nutraceutical company. If not strategically planned, IP issues can become a spanner in the wheel of a company’s planned launch and marketing.

3.1) Conflict with existing brand owners

It is not unheard of that companies adopt a brand for their nutraceutical product; invest their time, effort and resources in its promotion; and launch the same in the market only to receive a cease-and-desist notice from a pre-existing owner of an identical or a similar trademark, or an injunction order from a court restraining them from using the mark.

3.1.1) Trademark clearance search

To mitigate the above possibilities, a trademark clearance search is recommended before launching a brand, to determine whether:

  • The proposed brand is available for use;
  • The proposed brand is protectable against third-party marks; and
  • An identical or a similar trademark exists.

The Indian Trademarks Office (TMO) provides a searchable database on its website that allows users to search for trademarked words, brands, and even images. It is advisable to check domain names and conduct internet searches, including searches on popular search engines, social media platforms, e-commerce platforms, the website of the Registrar of Companies, and the list of well-known marks issued by the TMO. A clearance search avoids the costly consequences of an infringement lawsuit, product and logo redesign, rebranding, and the destruction of manufactured products, etc. It also helps in overcoming objections based on a prior pending or registered trademark.

3.1.2) International non-proprietary name search

An international non-proprietary name (INN) search is another crucial search for determining the availability of a trademark for nutraceuticals. An INN not being registerable and enforceable, as an example BIOTIN, should be avoided in branding the product.

3.1.3) Traditional Knowledge Digital Library search

The Traditional Knowledge Digital Library (TKDL) is a prior art search database of Indian traditional knowledge which contains information from existing literature pertaining to formulations related to Indian Systems of Medicine and its local names. Considering the plant-based nature of nutraceuticals, a TKDL search is helpful in avoiding potential objections by the registry on the ground of descriptiveness of a mark.

3.1.4) Copyright registrations

The labels, logos, and trade dress of a product can also be protected as artistic works under the Copyright Act, 1957, as amended. Copyright registration is advisable, considering Section 64 of the Act empowers police authorities to seize goods bearing the infringing logos, labels, and trade dress, etc. upon a direct complaint by copyright owners.

3.2) Trademark infringement/passing off

Another challenge faced by brand owners is the unauthorised adoption or use of an identical or a similar mark by third parties, which dilutes the distinctiveness of the trademark. Trademark registration is the first defence against such adoption.

3.2.1) Test for the similarity of marks

In India, pharmaceuticals and drugs are governed by the Drugs and Cosmetics Act 1940, while nutraceuticals are regulated by the FSS Act, 2006 and the FSS regulations. However, the test for determining the similarity of marks is the same for both, as laid down by the Delhi High Court in Sun Pharma Laboratories v Ajanta Pharma, CS (COMM.) 622/2018. The court acknowledged that nutraceuticals:

  • Are highly regulated products;
  • Cannot be manufactured without a licence; and
  • Require approval from the FSSAI for the product itself, its packaging, labels, specific disclaimers, etc.
  • Pharmaceuticals and nutraceuticals are usually advised by medical practitioners to address specific ailments and improve health.

3.3) Counterfeiting on e-marketplaces

A survey conducted by the social-media platform LocalCircles and published in 2018 indicated that 38% of consumers had received counterfeit products purchased from an e-commerce platform. E-marketplaces should be watched closely by brand owners given their popularity and the anonymity of sellers. Trademark owners are advised to have a watch service and a take-down programme in place to keep the space free of counterfeits and infringing products.

3.4) Product disparagement

With the rapid growth of the nutraceutical industry, brand owners may face comparative advertising issues with their competitors that may amount to disparagement of their products. Special care is suggested while designing advertising campaigns and keeping abreast of the regulations set out by the Advertising Standards Council of India in relation to unfair advertising.

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