Sep 26 2024 37 mins 18
Navigating Brand Restrictions, Sustainability, AI, and Anti-Counterfeiting with Myrtha Hurtado Rivas of Nestlé
On this episode of IP Fridays, I had the pleasure of interviewing Myrtha Hurtado Rivas, the General Counsel for Brands, Marketing Properties, Licensing, and Anti-Counterfeiting at Nestlé. Our conversation delved into several pressing issues in the field of intellectual property (IP), including brand restrictions, sustainability claims, artificial intelligence (AI), and anti-counterfeiting challenges. Here are the key takeaways from our engaging discussion:
Brand Restrictions: Impact on Businesses and Consumer Choice
Myrtha began by explaining brand restrictions, which are often implemented by governments to nudge consumers toward healthier or more environmentally friendly choices. These restrictions can take various forms, such as prohibiting certain branding, implementing traffic light labeling systems (e.g., for sugar or fat content), or even banning toys associated with products, like Kinder Eggs in certain countries.
One of the biggest challenges of brand restrictions is the impact on consumer choice and business innovation. Myrtha pointed out that limitations on brand usage, including packaging and advertising, can sometimes inadvertently stifle consumer access to safer products and even hinder efforts to combat counterfeiting.
During her recent moderation of a panel on brand restrictions at the International Trademark Association (INTA) annual meeting, Myrtha emphasized that these restrictions are not only a problem for brand owners but also limit consumers’ freedom to make informed choices. Brand restrictions, when applied broadly, also pose challenges for IP professionals trying to maintain consistency across markets, especially in smaller countries where product variations could make it economically unviable to continue offering the same products.
Sustainability and Green Claims: Defining the Difference
We also discussed the increasingly important topic of sustainability claims and green claims. While these terms are often used interchangeably, there are distinctions—especially in the legal and regulatory frameworks emerging around them. In Europe, for instance, green claims are commonly discussed in the context of a new Green Claims Directive, which governs the kinds of statements companies can make about their environmental impact.
Myrtha explained that sustainability claims generally cover a broader range of factors, from how products are manufactured to how waste is managed and how packaging is produced. However, there remains a lack of clarity and uniform regulation across jurisdictions, which can lead to confusion and even legal risks for companies making these claims.
At Nestlé, sustainability claims are vetted carefully, and Myrtha’s team plays a central role in ensuring that any statements made are accurate, legally compliant, and aligned with business strategies. The collaboration between IP, marketing, and compliance teams is key in navigating this complex area.
AI in Business: From Early Adoption to Everyday Use
Nestlé has been a pioneer in using artificial intelligence (AI) in its business processes, especially within Myrtha’s legal and IP teams. Myrtha recounted how she has been using AI tools for years, starting with her time in the pharmaceutical industry, where AI was essential in clinical trials and data gathering. Today, AI tools like Copilot and Nest GPT (Nestlé’s internal AI system) are embedded in many of their day-to-day operations.
These tools help with tasks such as negotiation support, summarizing emails, drafting contracts, and data analysis. Myrtha noted that AI significantly enhances efficiency and allows even junior team members to handle more complex tasks with greater accuracy. As a result, teams are better equipped to make business-focused decisions, with AI helping to ensure that the legal aspects are clear and easy to understand for non-lawyers.
Anti-Counterfeiting: A Global and Growing Challenge
One of the key areas of focus for Myrtha at Nestlé is the fight against counterfeiting, particularly in the food and beverage sectors. The rise in counterfeiting has been exacerbated by the economic downturn caused by both the COVID-19 pandemic and the ongoing Russia-Ukraine war, which has driven up the cost of raw materials and made consumers more price-sensitive. As a result, counterfeit products are thriving in the market, especially online.
Myrtha highlighted several challenges related to anti-counterfeiting, including cross-border collaboration, privacy laws, and the difficulty of tracking counterfeit products across various online marketplaces. She also pointed out that counterfeiters have become increasingly sophisticated, often operating in countries where law enforcement is limited. In some cases, counterfeiters even use the same production facilities as legitimate manufacturers, making it harder to shut down these operations without affecting legitimate goods.
Nestlé’s approach to counterfeiting is built on collaboration with governments, law enforcement, and other stakeholders. However, the company faces hurdles such as lenient punishments for counterfeiters and cultural acceptance of counterfeit goods in certain markets.
Key Takeaways for Startups and SMEs on Anti-Counterfeiting
Towards the end of our conversation, I asked Myrtha for her top three recommendations for businesses, especially startups and small-to-medium enterprises (SMEs), that are looking to protect themselves from counterfeiting. Here’s what she shared:
- Anti-counterfeiting is everyone’s responsibility: It’s not just the legal department’s role; the entire company, from the CEO down to the operational staff, needs to be on board with the strategy.
- Collaboration is key: Whether with competitors, consumers, or government authorities, businesses must work together to tackle the global counterfeit market effectively.
- Leverage your entire team: Often, junior team members, paralegals, and assistants play a crucial role in gathering data, monitoring activity, and supporting anti-counterfeiting efforts. Every member of the team should be trained and empowered to contribute.
In conclusion, this interview with Myrtha Hurtado Rivas provided invaluable insights into how a global giant like Nestlé navigates complex IP challenges, from brand restrictions to anti-counterfeiting. Whether you’re a large corporation or a startup, these insights are applicable across industries and highlight the need for collaboration, transparency, and innovation in tackling today’s most pressing IP concerns.
Myrtha Hurtado Rivas: Hi, this is Myrtha Hurtado Rivas. I’m the General Counsel for Brands, Marketing Properties, Licensing, and Anti-Counterfeiting at Nestlé. And you’re listening to IP Fridays.
Rolf Claessen: Today’s interview guest is Myrtha Hurtado Rivas. She is the General Counsel, Brands and Marketing Properties, Licensing, and Anti-Counterfeiting at Nestlé. Thank you very much for being on the show.
Myrtha Hurtado Rivas: My pleasure to be here.
Rolf Claessen: So we both just attended the INTA annual meeting in Atlanta, where not only trademark professionals go, but basically all IP professionals gather there. It’s just the biggest meeting of all IP meetings, and also the patent and design people come there.
You are on the Brand Restrictions Committee of INTA. And I first want to talk about that. So maybe first of all, can you briefly explain what brand restrictions are and how they are hurting businesses?
Myrtha Hurtado Rivas: Sure. Thanks for raising that question. So brand restrictions essentially can take many different forms. But in essence, what it is, is that governments or authorities try to nudge consumers into making more healthy choices. So that can be either when they choose an infant formula, for instance, a product where some authorities are convinced that it’s better to breastfeed children instead of giving them infant formula.
But it also can be, for instance, traffic lights on packaging with respect to maybe sweet foods where there is too much sugar, or too fatty products where the fat content is too high. And so you can have traffic lights, or you can have restrictions that forbid you from using certain brands on certain products. For instance, you can also forbid small toys from being sold together or gifted with a brand, like the Kinder Surprise Egg, which in some countries has been forbidden because you cannot incentivize the sale of a chocolate product by adding a toy to it.
We also have restrictions in areas like fossil fuels, tobacco, pharmaceuticals, and alcohol. It’s pretty much everywhere where some authority wants to influence consumer behavior.
Rolf Claessen: Okay. We all know, in Germany at least, the cigarette packaging with gruesome pictures on it. The government wants to scare people away from buying cigarettes.
Some of the brand restrictions are very visual and impactful. But you were also a moderator on a panel about brand restrictions at the INTA meeting. The panel was called “Navigating Brand Restrictions.” What were your main takeaways from this panel? And what, in your opinion, are the most pressing issues at the moment?
Myrtha Hurtado Rivas: The idea of the panel was to explain to INTA members why INTA had to publish a resolution with respect to the topic of trademark use versus advertising. Why is this relevant for brand restrictions? Because INTA has already been advocating against brand restrictions in general. But we are now being confronted with situations where authorities are trying to limit advertising, and advertising is not trademark use per se.
There are jurisdictions that recognize the advertising function of a trademark, but there are many where this is not the case. INTA needed to clarify its stance to be able to advocate against restrictions on both trademark usage and advertising.
During the panel, we discussed several examples, such as a proposed fossil fuel law in Canada and new WHO guidelines on infant formula. The takeaway was that brand restrictions limit not only businesses but also consumers’ choices. In some cases, it may even limit safe choices for consumers because brands and packaging cannot communicate important differences in products.
Rolf Claessen: Right. You mentioned infant formula. And maybe there are other products in Nestlé’s portfolio affected by these restrictions. What are the main challenges for you at Nestlé regarding brand restrictions?
Myrtha Hurtado Rivas: Thank you. Obviously, what I’ll share is my personal view, not the company’s. At Nestlé, the challenges are similar to those faced by other companies. We have to carefully consider how we brand our products, especially when extending product lines. Some changes may be required in certain countries, and we need to stay ahead of what might happen in the future regarding restrictions.
Our job is to advise the business to make decisions that will allow products to remain on the market, ensuring growth while also navigating these restrictions. We’re constantly balancing today’s restrictions with future business strategies.
Rolf Claessen: You mentioned smaller countries. Could you give an example so people can better understand this challenge?
Myrtha Hurtado Rivas: Sure. When I worked in pharma, there were big discussions about Ecuador. The Ecuadorian government wanted specific packaging for pharmaceuticals, which was different from neighboring countries. Ecuador is a small country, so pharmaceutical companies had to decide whether they would continue selling products there or increase prices because of the different packaging requirements. For life-saving medicines, price increases can be a sensitive issue.
Rolf Claessen: Great example, thank you. Let’s switch topics to sustainability claims. Consumers want to know where products come from and how they’re produced. What are sustainability claims, and how are they different from green claims?
Myrtha Hurtado Rivas: That’s a great question. In Europe, we have the Green Claims Directive, which gives an official framework for green claims. But sustainability claims tend to be broader. These are claims about how products are manufactured, how waste is handled, or the type of packaging used. It can also cover services, like the sustainability claims around air travel.
The issue is that we don’t have a precise catalog of what is and isn’t allowed. At Nestlé, our IP team reviews sustainability claims to ensure they are accurate and compliant, which helps us stay connected to the business.
Rolf Claessen: So you work closely with compliance and marketing on sustainability claims?
Myrtha Hurtado Rivas: Exactly. We collaborate with compliance, marketing, and other departments to ensure that sustainability claims are legally sound. However, the challenge is the lack of a clear, uniform definition of sustainability and green claims across jurisdictions.
Rolf Claessen: What are your concerns about sustainability claims in the future?
Myrtha Hurtado Rivas: My main concern is the lack of consistent regulation. Many different authorities have the power to impose fines related to sustainability claims, from food safety authorities to advertising regulators. Monitoring the constantly evolving laws and regulations across more than 180 countries is a massive task.
There’s also the growing concern that IP offices are starting to equate certain symbols, like a leaf on a logo, with sustainability or eco-friendliness, even when that may not be the case. This opens the door to more refusals of trademark registrations based on ambiguous interpretations.
Rolf Claessen: Let’s shift to another topic—AI. I remember an interview where you talked about using AI five years ago. How does Nestlé use AI in its daily business?
Myrtha Hurtado Rivas: Yes, I’ve been using AI for many years, starting in the pharmaceutical industry. Today, we use tools like Copilot for recording, transcribing, summarizing, and managing emails. We also have Nest GPT, our internal AI tool, which allows us to safely feed internal business information for analysis.
AI is embedded in almost everything we do—from negotiations to contract drafting. It helps junior team members handle more complex tasks, allowing them to work more efficiently while being guided by AI.
Rolf Claessen: That’s very impressive. You also mentioned using AI to summarize complex legal documents for non-lawyers. How has AI impacted your team?
Myrtha Hurtado Rivas: AI has been a game-changer. It allows our junior lawyers to take on tasks that previously required senior lawyers, as AI tools can simplify legal opinions and make them easier for the business to understand. It’s a great tool for training and improving efficiency across the board.
Rolf Claessen: Let’s now talk about anti-counterfeiting. Nestlé has a large portfolio of food and beverage products. What are the challenges you face in combating counterfeit products?
Myrtha Hurtado Rivas: The biggest challenge today is the global economic crisis, which has led to an increase in the price of raw materials. This has created a fertile ground for counterfeiters, as consumers are looking for cheaper alternatives. Counterfeiters exploit this by offering fake products at lower prices, especially online.
During COVID, we had good collaboration with authorities, and many platforms are now more cooperative. However, online marketplaces remain a significant challenge. Counterfeiters can quickly reappear under different names, and privacy laws sometimes prevent us from getting the information we need to take action.
Rolf Claessen: You mentioned changing counterfeiting routes. Could you expand on that?
Myrtha Hurtado Rivas: Yes, we’ve noticed new channels emerging to bring counterfeit products into markets where production is limited. In some cases, the same production facilities are used for both legitimate and counterfeit products, making it difficult to shut down these operations without disrupting legitimate goods.
Rolf Claessen: Food and beverage counterfeiting seems particularly dangerous. Could you elaborate on the risks for consumers?
Myrtha Hurtado Rivas: Absolutely. Counterfeit food products may not meet safety standards. They could contain harmful ingredients or be packaged in substandard materials that don’t preserve the product properly. Over time, consuming such products can pose serious health risks.
Rolf Claessen: Thank you for those insights. As we wrap up, what are your top three recommendations for businesses, especially startups, looking to tackle counterfeiting?
Myrtha Hurtado Rivas: First, anti-counterfeiting must be a company-wide effort. It’s not just a legal issue—everyone from the CEO to the operations team needs to be involved.
Second, collaboration is key. You won’t solve the problem alone, so reach out to others in your industry, including competitors and authorities.
Third, empower your entire team. Anti-counterfeiting requires everyone’s contribution, from paralegals to senior lawyers. It’s crucial to train all team members and involve them in the process.
Rolf Claessen: Thank you so much, Myrtha. This has been a very insightful discussion, and I appreciate your time.
Myrtha Hurtado Rivas: You’re very welcome, Rolf. It was my pleasure.
