Industries are changing due to the pandemic and the role of intellectual property – Case study 1: Restoration

This is a joint article with the firm NKA

This case study examines the impact of the COVID-19 pandemic on SMEs (small and medium-sized enterprises) from the start of 2020 to 2021. It focuses on the industries most affected by the crisis and whether intellectual property (IP ) and IP management may have helped mitigate its impact through adaptation and change. It is part of a series of case studies from multiple sectors examining the role of IP and IP management during COVID-19 and lessons learned. It is aimed at governments and SMEs planning disaster recovery strategies involving intellectual property assets over the coming months.

Sector overview

The global restaurant and broader food and beverage (F&B) industry is predominantly comprised of SMEs. Since the outbreak of the COVID-19 pandemic, it has been one of the hardest hit and most immediately impacted industries, with loss of customers almost overnight, damaged supply chains, losses important jobs and financial difficulties. For many players in the hospitality industry, intellectual property assets largely meant branded assets such as trademarks, domain names, or customer or supplier databases. However, the challenges posed by the pandemic have not only forced companies to better utilize and, in many cases, monetize these assets, but more importantly, they have also driven a degree of innovation into the industry. , accelerating the changes already underway but also forcing many businesses to reinvent themselves and develop new online offerings, new supply chains and new business models. In this context, intangible assets are likely to become increasingly important for this industry by protecting these innovations and helping companies to create a niche and consolidate their position in the market.

To analyse

These changes for SMEs in the F&B industry have included changes in business models, changes in operating and procurement processes as well as accelerated digitization and acceleration of emerging technologies in this sector. Uncertainties have forced companies to better manage risk, business performance and cash flow, as well as to imagine new paths towards revenue generation and prioritization of business models incorporating digitization, the latter being an important tool. to help the recovery of this sector.[1]. It is important for SMEs affected by COVID-19 to recognize the impact on their business at an early stage and understand what actions will be required to restart their business and survive the storm of COVID-19[2]. It’s clear that Intellectual property will play an important role in this process[3].

A survey by the China Cuisine Association and Deloitte China indicated that 94% of companies surveyed had seen their catering services severely affected – in many cases by a 80% drop in the number of restaurant customers. This is particularly evident in the graph below, reflecting the year-over-year change in the number of diners seated in restaurants around the world during the global spread of the coronavirus in March 2020.

Figure 1: Year-over-year daily variation in sit-down restaurants due to the coronavirus (COVID-19) pandemic worldwide in March 2020.

In the UK alone, around 3.2 million people are expected to work in the restaurant sector and be affected by COVID-related job losses, furloughs or pay cuts -19. Many sites have expanded existing online ordering services by offering food and recipe boxes and providing customers with fresh ingredients for their favorite meals at home. Some restaurants and cafes also offer baskets for sale online to customers and may continue to use them as an additional source of income in the future. With the explosive growth of online food delivery platforms such as Just Eat, Deliveroo and Uber Eats, it is quite simple for regular restaurants and cafes to provide such “takeout” services, especially to those who may be housebound long term. such as those with existing medical conditions or the elderly.

SMBs and food service establishments around the world are meeting these challenges with process automation (robotics), development of online ordering and payment systems (e.g. QR codes for menu access and online payment), while also enabling contract traceability, a requirement in many countries during the current pandemic, while others have also introduced innovative air and surface purification technologies to ensure that the air present is purified and any viral or bacterial contaminants have been neutralized. Many of these innovations in software platforms, robotics and food preparation systems are well protected by appropriate intellectual property rights and likely represent significant changes in the industry, many of which will continue into the future. licensing opportunities for these technologies also represent potential additional revenue. flows for the companies concerned. For example, Creator, a San Francisco-based restaurant already known as an innovator due to its robot-made burgers, closed its restaurant and now delivers its meals via patent-protected pressurized transfer chambers, which avoid the entry of air from the outside while having a self-disinfection of the surface of the conveyor. The company has obtained patents for aspects of its burger-making robot and has also applied for patents for its COVID-19 inspired food delivery system.

Despite the opportunities for the active exploitation of intellectual property that underpin innovative business opportunities, intellectual property challenges remain. With ongoing shutdowns and a significant economic downturn still likely to occur, many businesses in this sector may also suffer from the potential risk of their trademarks not being used. While this period of non-use (which is five years in Europe and three years in the United States) may not seem immediately concerning, it is unclear whether many companies will continue to meet the requirements, especially longer term.[4]. Additionally, as restaurants expand their delivery businesses and meals become only part of the offering, there may be increasing pressure on catering businesses to protect revenue through NDAs in due to limitations protecting recipes using copyright and trade secrets, as well as place branding and chef’s personal branding. This will require a broader understanding of the brand assets by the company, the means of protection and, above all, the means by which the assets can be monetized and deployed to generate revenue. For example, JD.com live-streamed a club experience and partnered with a number of liquor brands, encouraging viewers to have a drink while watching. This boosted sales of beer and spirits. This is further demonstrated in Corona Beer’s silence in the face of prominent online memes and jokes, shows the company is distancing itself and the brand from unfortunate potential damage.[5].

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