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Identifying and Enforcing Trade Secrets in the Food & Beverage Industry
By Donald Bocchinfuso and Noel Courage
Trade secrets provide a business with an opportunity to obtain a commercial advantage over competitors who do not know or use the secret. Trade secrets do not have to be significant innovations, just new and unknown, with at least a minimal degree of skill applied by the secret owner to obtain it. Many food and beverage businesses do not realize that even a simple new manufacturing process or formulation could give rise to a protectable trade secret. However, the secret must be managed carefully to initially qualify as a trade secret, and then to avoid loss of rights. This article will provide a brief overview of trade secret protection, as well as show how they can be used to protect against misappropriation by former business collaborators, as well as departing employees and their new employers.
Trade Secrets for Food and Beverage Products
Creation and protection of trade secrets is especially important for food and beverage products, where processes and recipes may not be suitable for patenting.1 We emphasize that simplicity is not a bar to trade secret protection.
As an example, the specific proportion of clam juice, seasonings and tomato juice used in Clamato™ beverage was a protectable trade secret.2 This was the case even though the label listed all the basic ingredients (though “spices” listed on the label were not specified). As well, the Clamato brand owners weren’t the first to mix tomato juice and clam broth with spices. This had been disclosed in a cookbook at least 10 years before Mott’s first sold Clamato beverage in 1966. Since it was a trade secret, the owner was able to prevent its misuse by a former business partner.
Read more here
PRANA: Strong trademarks help make "snacktivism" possible
As Canadians grow increasingly mindful of nutrition, as well as the way their food is produced and packaged, businesses are seizing opportunities in the field. At the forefront of the organic snacks industry is PRANA, a Montréal-based Canadian company selling organic vegan snacks.
The founders of PRANA, Alon Farber and Marie-Josée Richer, got the inspiration for the company's name while travelling in India in the early 2000s. PRANA means "vital energy" in Sanskrit. Farber and Richer thought this was the perfect name to represent their company, which prides itself on the sustainability and wholesomeness of its products.
Read more here.
Relevant changes related to exemption form complying with the Mexican labelling standard
As of 1 October 2020, the Mexican Ministry of Economy is no longer allowing the use of “exemption letters” to request that food products imported in bulk or for processing, wholesale or foodservice purposes (i.e. not for retail sale) be exempted from compliance with Mexican Official Standard NOM-051, which is related to labelling of pre-packaged foods and non-alcoholic beverages for retail sale.
This change, which caught the Mexican industry by surprise, stems from modifications published by the Mexican Ministry of Economy to its General Rules and Criteria for Foreign Trade Operations. As part of the changes, the Ministry of Economy removed the provision that allowed Mexican companies importing food products in bulk or for processing/foodservice/wholesale purposes to present a letter under oath requesting that the products be exempted from compliance with the Mexican Official Standard NOM-051, since the products are not intended for retail sale directly to consumers. We understand that this change was implemented following what was considered as abuses in the use of these exemption letters when importing products that were not complying with NOM-051, but were in reality being sold at retail once imported.
While the use of “exemption letters” is no longer permitted, the Ministry of Economy indicated to the Mexican industry that there are some “Exemptions of Compliance with NOM-051” that Mexican customs brokers can still use when conducting the import process for products imported in bulk or for processing/foodservice/wholesale purposes (not for direct retail sale). The Ministry of Economy explained to the Mexican industry that in order to make use of these compliance exemptions, when filling out the official document to be presented at Mexican customs for importing a shipment (called PEDIMENTO in Spanish), the customs broker needs to include the corresponding “Code” in the PEDIMENTO, to indicate that the product should be exempted from complying with NOM-051 because it is not intended for direct retail sale. Mexican importers have indicated to the Embassy that they have already started to use this provision, and are also attaching a letter to the PEDIMENTO, justifying why the product does not need to comply with NOM-051 (i.e. imported in bulk for processing or for foodservice purposes).
Industry contacts also indicated to the Embassy that another option they are using is to request from a private verification unit authorized to verify compliance of NOM-051, to issue a “Certificate of Non-Application of NOM-051” (CONSTANCIA DE NO APLICACION DE LA NOM-051) for the products, which is then attached to the PEDIMENTO. Mexican industry contacts recommended that companies should evaluate what is the best option on a case by case basis. Industry contacts also indicated that when required, Mexican authorities are providing the option of re-labelling products in a fiscal warehouse at the point of entry or in warehouses inside Mexico, under the supervision of the authority or an authorized private verification unit
When shipping products in bulk or for processing, wholesale or foodservice purposes, the Embassy recommends that Canadian exporters work closely with their Mexican importers to define the best available strategy to demonstrate to Mexican authorities that the product is not required to comply with NOM-051 as it is not intended for retail sale directly to consumers.
Need financing? The Canada Small Business Financing Program makes it easier for small businesses to get loans from financial institutions by sharing the risk with lenders. Up to a maximum of $1,000,000 for any one borrower, of which no more than $350,000 can be used for purchasing leasehold improvements or improving leased property and purchasing or improving new or used equipment. Financial institutions deliver the program and are solely responsible for approving the loan. For more information download their PDF pamphlet or click here to find a lender near you.
Additional resources:
Government of Canada Overview of Services for Small Business (download PDF)
Government of Canada Managing Your Business During COVID-19
Surplus Food Rescue Program
The Surplus Food Rescue Program is part of the government of Canada’s emergency response to the current COVID-19 crisis. This is a time-limited program to help manage and redirect existing surpluses to organizations addressing food insecurity and to avoid food waste. It will provide an opportunity for non-profit and for-profit organizations across the supply chain to bid on significant volumes of surplus products at the cost of production or less, processing them where necessary for longer shelf life and distributing to food serving agencies.
Applicants under this program may be eligible to receive a maximum of $20 million unless the organization can make a case to move commodities in all categories.
Applications are being accepted immediately, until July 15, 2020
Information on the application process is available through the Surplus Food Rescue Program.
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Perfect your pitch at digital Bootcamps Are you looking to master your pitching skills to highlight your products or services for new buyers, investors and partners or simply to wow the judges at the upcoming Canadian Export Challenge (CXC)? The Trade Commissioner Service (TCS) invites you to join Startup Canada and Volition for a series of virtual pitch‑building bootcamps to help participating entrepreneurs prepare for the upcoming CXC pitching competitions this fall. These sessions will provide key insights to create and refine a flawless 90‑second pitch using proven narratives and pitch‑building techniques. You'll learn how to:
Dates and times:
The CXC is presented by Startup Canada in collaboration with the TCS, along with Export Development Canada (EDC), UPS, Mastercard and Scotiabank, and powered by Google. This year marks the third annual, and first fully‑digital edition of the CXC for Canadian startups and scale‑ups to grow their business globally. Fine‑tune your pitching techniques at a digital bootcamp. Register now. Have questions? Startup Canada can be reached by email at cxc@startupcan.ca. Minister Ng encourages entrepreneurs and innovators to apply for the Canadian Export Challenge (click to view) |
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Turning Point Initiative Aims to ‘Reimagine New Brunswick’ Ten economic development, business, and community development organizations from across New Brunswick will present a virtual conference and podcast series designed to reimagine New Brunswick in a post-pandemic world. Turning Point: Recovery and Reimagination in New Brunswick will consist of eight virtual conferences and related podcasts in both English and French over a four week period. The first conference will be held this Thursday on the province’s fiscal realities and will feature Premier Blaine Higgs and economist Richard Saillant. All eight conferences will feature leading economists and a panel of public and private sector experts. The series will be big on interaction with conference attendees. The goal of the series is to design a sustainable roadmap for economic and social growth as New Brunswick emerges from the pandemic. Read more here |
$50 million to assistance in costs associated with mandatory 14 day quarantine for TFW
The Government of Canada recently announced up to $50 million to assist farmers, fish harvesters, and food production and processing employers with the incremental costs associated with the mandatory 14-day quarantine period for temporary foreign workers arriving from abroad.
Agriculture and Agri-Food Canada is now accepting applications for all provinces/territories with the exception of Prince Edward Island. Eligible employers in the province of Prince Edward Island can apply for the program through their provincial government.
Le gouvernement du Canada a récemment annoncé un montant de 50 millions de dollars afin d’aider les secteurs de l'agriculture, de la pêche ainsi que de la production et de la transformation des aliments. Le programme aidera les employeurs canadiens avec certains frais supplémentaires liés à la période d'isolement obligatoire imposée aux travailleurs étrangers temporaires à leur entrée au Canada.
$62.5 million of new assistance to the Fish & Seafood Processing Sector
On Saturday, April 25, the Honourable Bernadette Jordan, Minister of Fisheries, Oceans, and the Canadian Coast Guard, announced $62.5 million of new assistance to the fish and seafood processing sector. This new Canadian Seafood Stabilization Fund will help businesses:
- access short-term financing to pay for maintenance and inventory costs;
- add storage capacity for unsold product;
- comply with new health and safety measures for workers;
- support new manufacturing/automated technologies to improve productivity and quality of finished seafood products; and,
- adapt products to respond to changing requirements and new market demands
More information can be found here:
In this region the program will be delivered via ACOA, You can contact them: Head Office: 1-800-561-7862.
Support for farmers and agri-food businesses
The Federal Government has announced
The Government of Canada is providing an update on travel restrictions put in place to stem the spread of COVID-19. Exemptions to the air travel restrictions will apply to foreign nationals who have already committed to working, studying or making Canada their home, and travel by these individuals will be considered essential travel for land border restrictions. The exemptions include
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Prime Minister announces more support for workers and business The Government of Canada is taking strong and quick action to protect our economy, and the health, safety, and jobs of all Canadians during the global COVID-19 outbreak. The Prime Minister, Justin Trudeau, today announced a new set of economic measures to help stabilize the economy and help Canadians affected by the impacts of this challenging period. These measures, delivered as part of the Government of Canada’s COVID-19 Economic Response Plan, will provide up to $27 billion in direct support to Canadian workers and businesses, plus $55 billion to meet liquidity needs of Canadian businesses and households through tax deferrals to help stabilize the economy. Combined, this $82 billion in support represents more than 3 per cent of Canada’s GDP. This wide-ranging support will help ensure Canadians can pay for rent and groceries, and help businesses continue to pay their employees and their bills during this time of uncertainty. This plan builds on coordinated action taken since the beginning of this outbreak, including the more than $1 billion COVID-19 Response Fund, which provided funding to provinces and territories to strengthen critical health care systems. It represents over $500 billion in credit and liquidity support for people and businesses through cooperation between financial Crown corporations, the Bank of Canada, the Office of the Superintendent of Financial Institutions (OSFI), and commercial lenders to ensure businesses can continue to operate. |
Federal Work-Sharing Program If your workplace is feeling the impacts of COVID-19 due to a reduction of business, consider applying for the federal government’s Work-Sharing program. The Work-Sharing program aims to help employers avoid layoffs and provide employees with income support during times of temporary reduction in normal business activity that is outside of an employer’s control. Work-Sharing is available to employees eligible for Employment Insurance benefits and requires that employees agree to a reduced schedule of work. Employers and employees must apply for the program together, with union involvement as well if applicable. Applications must be submitted at least 30 days in advance and benefits will generally be available for up to 38 weeks. However, in response to the COVID-19 outbreak, the federal government has implemented special measures to address employers experiencing a downturn in normal business related to the outbreak. The changes include waiving the mandatory waiting period between Work-Sharing agreements and extending the number of weeks that benefits may be received from 38 to 76. These special measures are effective March 15, 2020 to March 14, 2021. What is a Work-Sharing Unit? A Work-Sharing unit includes a minimum of two employees who perform similar work and agree to reduce their hours by the same percentage, over a specific period of time. A unit must reduce its hours by 10%-60%. All employees in the same job description must reduce their hours of work, regardless of whether they are part of the Work-Sharing unit (i.e. one employee cannot refuse to join the unit and continue to work normal hours). Who is Eligible? Employers must be involved in a year-round business in Canada for at least two years in order to be eligible for the program. This includes private businesses, publicly held companies, or not-for-profit organizations. A business must be experiencing a recent decline in sales or production levels of at least 10% in the last six months to be eligible for a Work-Sharing agreement. An employer must be able to demonstrate that the recent decline is directly or indirectly related to impacts of the COVID-19 outbreak and that the work shortage is temporary and beyond the employer’s control. In order to be eligible, the decline cannot be due to a recurring slow-down. Finally, employers must be willing to submit a recovery plan outlining measures that will be implemented to support the on-going operation of the business. In order to be eligible for the Work-Sharing program employees must be eligible to receive Employment Insurance benefits. Employees involved in the program must be year-round, permanent employees, and may be full or part-time as long as they perform the main functions of the business. Those employees eligible for the program are those which comprise the employer’s “core staff”. Finally, employees in a work sharing unit are employees who agree to reduce their normal working hours and share the work that is available at the workplace.
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Whole Foods Market’s top product trends predictions for 2020Meat-plant blends, new varieties of flour, West African foods, and zero-proof drinks are among the key areas Whole Foods Market says could take off in 2020.
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Atlantic Trade and Investment Growth Strategy SIAL Canada Food and Beverage Atlantic, working jointly with the Atlantic Canada Opportunities Agency and the provinces of New Brunswick, Nova Scotia, Newfoundland and Labrador and Prince Edward Island, is seeking Atlantic Canadian companies to attend SIAL Canada in Montreal, Quebec from April 15 to 17, 2020. SIAL is now the only event of its scale in Canada, with more than 1000 national and international exhibitors hosting over 18,500 buyers from Canada, the U.S., and over 50 other countries. This project is being supported by the Atlantic Trade and Investment Growth Strategy, a partnership between the Government of Canada and the four Atlantic Provincial governments. SIAL Canada is the only national trade show that offers a complete range of food products under one roof to meet customers’ expectations. Buyers and decision makers across the whole industry, from grocery, wholesale and specialty retail to food service and manufacturing, will converge to uncover the hottest trends, latest product launches and the industry’s vision for the future. The 2019 SIAL Canada Show in Toronto had over 18,500 professional buyers from over 60 countries, and there were over 1000 exhibitors from these countries. The top 5 of the 60 plus countries and regions visiting SIAL include Canada, United States, Mexico, the European Union and China.
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Tammy Brideau, Food & Beverage Atlantic Tammy says the key to building a successful food and beverage industry is in partnerships and good communications. She cites the excellent relationship with the Atlantic Canada Opportunities Agency and partnerships such as the CTV News Atlantic segment, What’s For Dinner, that showcases members weekly. Not unlike the rest of the country, labour supply and workforce development is a top priority in Atlantic Canada. As a member and Director with Food and Beverage Canada, Tammy can rely on the organization to find policy and program solutions that will work for her members. One of Tammy’s greatest assets is her willingness to meet with people and businesses in the region and what she learns is making Food & Beverage Atlantic a top performing organization. To learn more about Food & Beverage Atlantic contact Tammy Brideau. |
