This article is written by FEMINA P U,  BA LLB, FACULTY OF LAW, ALIGARH MUSLIM UNIVERSITY, ALIGARH during her internship with Le Droit India.

ABSTRACT

The purpose of this paper is to critically analyze how major beauty brands protect their innovations with the help of intellectual property rights. Innovation is key to the beauty industry’s success, from innovative product compositions to distinctive branding. Big beauty firms depend on intellectual property (IP) regulations to protect their R&D and creative marketing initiatives. This article examines the different ways in which brands utilize copyrights, patents, trade secrets, and trademarks to safeguard their innovations. It looks at how trade secrets guard proprietary formulations, patents secure product developments, trademarks protect brand identification, and copyrights defend artistic creations like advertisements and packaging. Furthermore, covered are the functions of litigation, regulatory compliance, counterfeit protection, and licensing in preserving IP integrity. In the end, strong intellectual property (IP) policies let beauty firms stay ahead of the competition, grow internationally, and secure their ideas for a long time.

INTRODUCTION

For businesses in the very competitive beauty sector to stand out and win over customers, innovation is essential. Beauty companies are continuously coming up with new goods and experiences that characterize their market presence, from iconic branding and packaging to groundbreaking skincare formulae. But innovation also increases the possibility of copying, counterfeiting, and infringement. Big beauty firms depend upon intellectual property (IP) regulations to safeguard their R&D and creative initiatives. By strategically utilizing trademarks, patents, trade secrets, and copyrights, these businesses protect not just their innovative products but also their market share and brand identity. This article examines the several strategies used by beauty companies to safeguard their inventions and maintain the viability of their enterprise through efficient intellectual property management, enabling them to prosper in an increasingly globalized market.

The worldwide behemoth that is the beauty industry is propelled by creativity, innovation, and brand loyalty. Beauty firms, which have invested billions of dollars in R&D and marketing, need to safeguard their intellectual property (IP) in order to maintain a competitive edge. Beauty enterprises can protect their innovations and keep their market leadership thanks to intellectual property rights, which also allow them to create innovative formulas and distinctive packaging.

SIGNIFICANCE OF INTELLECTUAL PROPERTY RIGHTS IN THE COSMETIC INDUSTRY

¹ BA LLB, FACULTY OF LAW, ALIGARH MUSLIM UNIVERSITY, ALIGARH

The term “Cosmetic” has been defined by the Drugs and Cosmetics Act, 1940 as “any article intended to be rubbed, poured, sprinkled or sprayed on, or introduced into, or otherwise applied to, the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance, and includes any article intended for use as a component of cosmetic”². As can be seen, a broad variety of items are included by this term, such as shampoos, serums, makeup brushes, and more. By 2032, the projected size of the worldwide cosmetics market is expected to almost double, from $378 billion in 2022 to $661.12 billion. It is anticipated that the Indian market would grow at a 25% CAGR and reach $20 billion by 2025³.

New goods are introduced into the market virtually every day, making the cosmetics sector a dynamic one. For this reason, in this industry, originality, creativity, and brand identification are highly prized. Rights to intellectual property (IP) are essential for safeguarding original works of art and the competitive advantages of companies in this industry. For example, the attractiveness of any recently released beauty product stems from a complex web of intellectual property rights, including trade secrets, designs, patents, trademarks, and copyrights, all of which work in concert to guarantee the product’s legitimacy, high quality, and uniqueness. This protects the brands from infringement and impersonation in addition to attracting customers. Cosmetic brands are protected by intellectual property in a number of ways, including:

1.TRADEMARKS: PROTECTING BRAND IDENTITY

A brand’s identification and consumer recognition in the beauty sector are largely dependent on its name, logo, and unique packaging. The main weapon used by beauty firms to safeguard these assets is trademarks, which make sure that no other business can use a name, logo, or packing style that is confusing to customers.

Estée Lauder is a prime example; it is the owner of multiple trademarks for its different product lines, including its name, logo, along with certain packaging styles. This also applies to trade dress, which is the term for a product’s distinctive color palette, form, and packaging. By preventing imitation and maintaining a company’s unique visual character, trademarks preserve customer confidence and brand loyalty.

Furthermore, slogans as well as other branding components are also protected by beauty businesses in addition to product names. For example, memorable phrases and slogans used in advertising campaigns are frequently protected by trademarks, which helps to further cement the brand’s perception among consumers.

In the case of Blue Heaven Cosmetics (P) Ltd. v. Anish Jain⁴, the Delhi High Court granted an ex- parte ad-interim injunction against the defendants for copying the packaging and the artwork of the plaintiff including the plaintiff’s description of their product.

² Section 3(aaa) of the Drugs and cosmetics act, 1940

³ McKinsey & Company, The Beauty Market in 2023: A Special State of Fashion Report, (Aug. 04, 2024, 6:30 PM) https://www.mckinsey.com/industries/retail/our-insights/the-beauty-market-in-2023-a-special-state-of-fashion- report (discussing E-commerce in beauty has quadrupled between 2015-22)

2.  COPYRIGHT: SAFEGUARDING CREATIVE WORKS

Beauty companies make significant investments in creative material, such as advertising campaigns, packaging design, and visual marketing, in addition to the scientific and technical aspects of their goods. These artistic resources are safeguarded by copyright law, which makes sure that unauthorized reproduction or duplication of the brand’s original works is prohibited.

Photographs used in advertisements, product designs, and even digital information like images from websites and social media platforms are frequently covered by copyright laws. For example, a company such as Dior will utilize copyright to safeguard the distinctive creative components of its advertising campaigns, making sure that its style is exclusively connected to its merchandise. Likewise, copyright frequently protects brand narratives and storytelling that enhance a product’s image.

In order to preserve a distinctive visual identity within the competitive market and stop rivals from stealing their innovative ideas, copyright protection is essential for beauty firms.

3.PATENT: SECURING PRODUCT INNOVATIONS

A patent on an invention gives the creator the sole right to use the creation for financial gain, which inspires and supports innovation. Major cosmetic companies launch a variety of items annually. Cosmetic companies try to launch goods that make scientific claims since doing so makes them far more marketable. Big names in cosmetics make significant investments in the development, formulation, and research of these goods. This has fueled the expansion of cosmetic patents, with the goal to safeguard the creation, investigation, and manufacture of cosmetic goods. Innovative skincare products, cutting-edge anti-aging compounds, or novel sun protection techniques may all be eligible for patents. Products that have patents or are patent-pending give an edge to product over the other products in the market because they serve as guarantee of its quality. For example, the brand Minimalist has come up with a patent-pending hair serum that has a combination of Maleic Acid, Transglutaminase and Amino Acid which helps in repairing damaged hair. The use of the term ‘patent-pending’ assures consumers of the novelty and quality of the product. Under the Patent Act, 1970, cosmetic treatments which do not have any therapeutical effect i.e. does not cure any disease in any way, may be patentable.

It was discovered that L’Oreal items were counterfeit through the e-commerce platform ShopClues in the case of L’Oreal v. Brandworld & Anr⁵ , ShopClues was not granted intermediate protection because the court noted that the company did not meet the requirements to be exempt from intermediary status because it introduced a separate category to report copies on its website and assured that all products sold through its website were “100% genuine.”

4.  TRADE SECRETS: PROTECTING CONFIDENTIAL FORMULAS

Trade secrets serve to safeguard knowledge that an organization would rather keep private, whereas patents mandate that the protected innovation be made public. One of the best kept secrets in the cosmetics industry is the use of proprietary formulae. Brands take great care to make sure that only a select group of important employees have access to these formulas, which are not made public.

In the field of beauty, well-known trade secrets include the precise recipe for fragrances, skincare products, or makeup. Brands such as Lush, for instance, mostly rely on trade secrets to safeguard their carefully mixed formulas. Trade secrets offer perpetual protection as long as they are kept hidden, in contrast to patents.

Manufacturing procedures and sourcing tactics are examples of trade secrets. Brands benefit from these behind-the-scenes operations because they enable them to provide something special, like cost-effectiveness or product quality, that rivals cannot match.

5.COUNTERFEIT PROTECTION: PRESERVING BRAND AUTHENTICITY

In the beauty industry, counterfeiting is a serious issue since phony goods put customer security and brand reputation at jeopardy. Major beauty companies employ a range of anti-counterfeiting technologies and methods, such as unique identifiers, serial numbers, and holograms, to prevent counterfeiting.

Businesses such as MAC Cosmetics and Estée Lauder, for instance, take steps to guarantee that customers are able to differentiate between authentic and fake goods. Beauty businesses safeguard their reputation and customer confidence by collaborating closely with border police and customs officers to stop the entry of fake products into the market.

By preventing counterfeiting, beauty firms can preserve the quality of their products and guarantee that customers are getting real, safe products.

CONTEMPORARY CHALLENGES FACED BY THE COSMETICS INDUSTRY IN TERMS OF THEIR INTELLECTUASL PROPERTY.

The up-and-coming trend in the cosmetic market is that of ‘Dupes’ Unlike counterfeits, dupes do not intend to deceive customers, but merely provide affordable cosmetics to the customers. The dupes attempt to imitate colour, consistency or formula of high-end products but they do not copy the packaging, logo or distinctive features, and thus, the law governing counterfeit products does not apply to dupes. Fragrance and shades of cosmetic products like lipsticks, nail polish, etc., are the most duped products. Thus is because the ‘fragrance’ or the ‘colour’ of these products is the functional part of the product which makes them ineligible for protection under trademark law or patent.

CONCLUSION

One of the most precious assets a firm may have in the beauty market is intellectual property. Beauty firms stay competitive in the market by protecting their ideas and using copyrights, trade secrets, patents, and trade secrets. As the industry develops further and new ingredients, technology, and trends appear, intellectual property protection will continue to be an essential component of a brand’s long-term success plan. Beauty brands may succeed in a fast-paced global market by maintaining their innovation, growth, and intellectual property.

REFERENCES

1. Blue Heaven Cosmetics (P) Ltd v. Anish Jain, 2023 SCC OnLine DeL 8509

• L’Oreal v. Brandworld & Anr, 2018 SCC OnLine DeL 12309

• McKinsey & Company, The Beauty Market in 2023: A Special State of Fashion Report, (Aug. 04, 2024, 6:30 PM)

https://www.mckinsey.com/industries/retail/our-insights/the-beauty-market-in-2023-a-special-state-of- fashion-report (discussing E-commerce in beauty has quadrupled between 2015-22)

• Raj Latha Kothi, ‘Beauty & the Brand: Navigating Intellectual Property in the Cosmetic Industry’. https://search.app/cmvAQNYcge1SazUb6

• The Drugs and Cosmetic Act, 1940, S. 3 (aaa) , Act No.23 of 1940