White Label Manufacturing presents a powerful partnership where manufacturers and brand owners play to their strengths. Manufacturers handle everything from raw material sourcing to packaging, while brand owners focus on branding, marketing, and sales.
However, this relationship often requires significant capital investments from manufacturers to meet market standards, typically on a cost-plus markup basis. Brand owners, on the other hand, invest heavily in building market reputation. Despite mutual benefits, the relationship can become imbalanced, with manufacturers needing to accommodate brand owners due to their market influence.
White label manufacturers (WLMs) can enhance their market presence and monetise their efforts through the following strategies:
Trade Marks
WLMs should protect their brand and services under the Trade Marks Act, 1993 (amended). This involves:
- Filing distinctive trade marks or brand names.
- Choosing appropriate trade mark classes that align with their business objectives. For example, class 42 covers research and development of new products and quality control services.
Know-how and Trade Secrets – Copyright Protection
WLMs can dominate their market by excelling in quality assurance or possessing exceptional scientific expertise. These attributes form know-how, which needs to be codified and kept confidential as trade secrets to be monetised.
Trade secrets must consist of confidential information known only to a restricted number of people, be applicable in trade and industry, and have economic and business value. Codifying staff know-how in confidential documents, like SOPs, and enforcing this through employment agreements with confidentiality and trade secret clauses, is crucial.
Patents and Research and Development
While patents require public disclosure, WLMs can develop a patent filing strategy that protects trade secrets without revealing too much information.
Update your Policies
Staff often face pressure to reduce prices or alter deliverables. Implementing policies backed by a comprehensive IP protection strategy can create a buffer. Similarly, Service Level Agreements (SLAs) often favour brand owners, but WLMs can use well-crafted definitions and clear language to protect their interests.
WLMs can protect and monetise their brands and service offerings by implementing a robust IP strategy.
Seeking advice from established legal IP experts can help WLMs develop a diverse IP portfolio strategy that aligns with their business objectives while maintaining their market position.
By Aletia Oberholster | Senior Associate, Viteshen Naidoo | Junior Associate, Dr. Gerard Verhoef | IP and Tech Transfer Specialist
