In-house insight: Nestlé USA Inc

As the world’s largest food and beverage company, Nestlé has spent the past 150-plus years building a solid brand development structure that ensures that its products are protected across the globe.

Christa Cole, head of legal brand development, enforcement and licensing at Nestlé USA Inc, explains: “The US companies that I support are licensees of Société des Produits Nestlé SA, which is the trademark owner. We’re the licensee, they’re the licensor, and my team liaises with the Swiss, global team to ensure that the actions we’re taking in the United States are consistent with the global strategies.”

In an industry where food and beverage brands are highly specific to each country, adapting the global strategy for each key market is vital.

Cole’s remit covers all of Nestlé’s food and beverage brands in the United States. This includes major meals brands Lean Cuisine and Stouffers, pizza and snacking brands California Pizza Kitchen, Digiorno, Jack’s and Tombstone, and, as of this year, water brands Acqua Panna, Perrier and S Pellegrino. On top of that, there are also the globally renowned beverage brands Coffee-Mate, Nescafé and Nesquik. For these, the company has a joint-venture licence with Starbucks, which covers everything from ground coffee to a new coffee creamer.

Unsurprisingly, the US food and beverage portfolio is the biggest dollar-wise in the Nestlé global group. “It’s a significant portion of Nestlé total US market sales, which was around $26 billion in 2020,” Cole confirms.

Collaboration with key functions

This is a heavy workload for a small team – comprising one paralegal and two lawyers – to handle. But Cole has spent 14 years building solid relationships with everyone involved in the process from across the enterprise. “My responsibility is to lead the function, utilising the various resources – whether they’re other legal department members, lawyers or paralegals that sit in Switzerland, or outside counsel. I’m the one who recommends the strategy and engages internal and external staff for each individual project. How do we staff it? Who needs to be involved? I make sure we proceed with enforcement, clearance, whatever the legal issue is, according to our pre-established objectives and strategies.”

With that in mind, the end goal is always to win with the consumer. Keeping everyone on track to achieve this requires clear, regular communication. “We have a lot of policies and guard rails and institutional knowledge that’s already in place, but we also have a lot of collaborative meetings, a lot of getting together and talking about the issues,” Cole explains.

In fact, when it comes to litigation, the team has weekly standing meetings to connect with other stakeholders and discuss how things are progressing. “Business people are invited to that meeting, and other lawyers – anyone who’s connected to that team, we make sure they’re there and we check in and see what’s going on,” she reports. This is not only effective project management, it is also a concerted effort to collaborate with other functions and place legal at the centre of operations.

“We have a really great, collaborative legal team on a global basis, so everyone really leans in and helps each other out,” she states. “It’s really important to how our legal function operates – definitely in the United States, but on a global level as well – that we are partners to our business.”

As a result, legal has shaken off the stereotype of being a stick in the mud and earned itself a place at the table as a thought leader. “I think because we have such an easy-to-work-with legal department, people around the business like working with us,” Cole admits. “They like coming to us. They want us there because of the thought leadership that the lawyers provide to the bigger project team.”

“Sometimes we get a new acquisition and it’s a little more tricky to get their buy-in from legal because they’re not used to it,” she continues. “But with time we can get them on board to partner with legal.”

Once that relationship is in place, it is a tough bond to break and, as the years pass, the task of educating clients on the company’s goals becomes easier. “Another helpful thing at Nestlé is that people tend to stay a long time,” Cole reflects. Although the company headquarters recently moved from Los Angeles to Arlington VA, leading to a slight increase in staff turnover, most people are around long enough to get a full appreciation of what legal can achieve. “I have the same clients that I have had for the past 10 years,” says Cole. “They have experience with the IP team and already know our processes. That makes the job easier.”

Cole is also on hand to guide brand teams on where to get started with licensing ventures. “They have an idea on a licensing deal they’d like to pursue so they come to me and ask: ‘How do we do it? How do we get started?’” From there, it is up to the marketing manager to drive the relationship with the licensee/licensor – often through regular brand board meetings.

“The business drives the licensing arrangements and they pull in legal when legal is needed,” Cole explains. “We get involved in the beginning to structure and document the deal, and then we get pulled back in when there are interpretation questions about the licensing agreement.”

Investing in trade dress to fight copycats

One of the biggest brand challenges for Nestlé over recent years has been the increase in private label products in the food and beverage industry. “Our customers are creating copycat products, with packaging that looks highly similar to ours, and confusing the consumer and diluting the look and feel of our products,” Cole states.

In response, the company takes an aggressive approach. “I always have one case pending, where we go and challenge either our competitors or our customers on trade dress that is too close to ours,” she says. When it comes to deciding who to go after, the team considers the size of the market share that the copycat has and whether the legal spend for enforcement justifies the action.

The team also works hard to acquire non-traditional trademarks to protect trade dress. “That’s also been a challenge for us,” Cole admits. “It’s one that we’re winning at, but it does take a lot of time and effort to get the registration for non-traditional trademarks in the United States.”

Again, regular collaboration with the brand teams is vital to deciding what and where to file. “We identify the non-traditional marks that we should be filing for by meeting annually with each of the brand teams and reviewing what we call a protection chart – a list of all the key protections for that brand,” she explains. This way, the group ensures that the key values of the brand are protected going forward by considering future goals and changes in the market. Cole’s role is to ask those all-important questions: “This year, what is important for this brand? What is the consumer identifying as the overall look and feel of the brand? We’ve got the names, but what else are they identifying as the source of origin?”

The answers give a clear view of the market and where legal focus should lie. A good example of this is Coffee-Mate. “Coffee-Mate has become known for being the one with the red lid,” Cole says. A few years ago, at one of these regular meetings, the marketing team explained that it had conducted consumer testing by providing shoppers with a set of crayons and asking them to draw Coffee-Mate. The result? They all drew the red lid. This got the trademark function thinking. “We did the work we needed to do and the proper counselling of the business on how to use and how to position the red lid so that over time we’d have the acquired distinctiveness to support a registration and just this last year we got one,” she reports.

Therefore, the importance of regular, cross-functional meetings cannot be underestimated. “It takes meeting with the business, educating them about what their trademark portfolio looks like, and then quizzing them on what we are missing,” Cole reiterates. “Just having that conversation with them once a year gets us thinking ‘this is what we should be doing’. As trademark lawyers, you can’t know until you talk to the marketing people, so it’s about having that open dialogue.”

With those registrations in place, the company has the ammunition it needs to come down hard on copycats. “We won’t tolerate another coffee creamer with a red lid,” she states. “We see it; we learn of it; we’ll pursue it.”

(A version of this article first appeared on the WTR platform on 29 April 2021.)