David and Goliath of Alt-Protein: Incredible Foods vs Motif Foodworks
The ongoing “beef” between two prominent players in the alternative protein industry, Incredible Foods (Incredible) and Motif Foodworks (Motif), has placed the spotlight on the importance of having patents in the field of plant-based meats and the likelihood of further patent infringement action in this growing industry.
In March 2022, Incredible filed a lawsuit against Motif alleging that the latter was infringing its US patent no. 10,863,761 (Patent 761), which covers the method and composition in relation to producing Heme, a naturally occurring compound found in animal blood and plants, that gives their meat its meaty flavour. In response, Motif claimed its source of protein in HEMAMI is different (albeit they sound curiously similar).
The products in question are Heme (launched by Incredible) and HEMAMI (launched by Motif). Heme’s protein source is soy leghemoglobin which is found in the roots of specific plants, whereas HEMAMI uses myoglobin which is found in bovine muscle tissue. Notably, both companies use genetically engineered yeast to produce the additive to plant-based meats, to create a “meaty flavour”, irrespective of the protein source.
You may not think this is a big deal, however, Bloomberg reported the alternative protein industry is set to grow from $4bn to $74bn over the next 10 years. The market has seen significant growth in the number of food-related patents filed since 2019 and patent filings will likely grow in importance as this market expands rapidly in line with consumer demand. It’s no surprise that VC funding in the global alt-protein market increased from circa $500mn in 2017 to circa $3bn in 2021.
Growing Appetite for Alt-Protein is increasing Patent Infringement cases
Companies in the sector are focused on developing and patenting inventions to replace traditional food products. Patents not only help to protect the inventions and form a key element of the competitive moat around a business, they can also be key assets in an IP portfolio, often recognised as valuable in corporate fundraising. Additionally, big behemoths like Nestle and Unilever are also trying their hand in the industry against the new innovators. This has heated competition in the market and encouraged growth in R&D in the sector.
A patent is a form of formal intellectual property (IP) that gives its owner an exclusive right to make, use, import or sell the invention in the country where the patent was granted. Patent infringement happens when the accused party wittingly or unwittingly uses the invention or a part of it, without the approval of the patent owner.
This recent public feud between Incredible and Motif intensified when the latter filed an inter partes review (IPR) with the USPTO challenging the validity of Patent 761. Motif has argued that the patent is invalid on the grounds of inequitable conduct, i.e., there was a prior body of art including a previous patent or other literature was already available in the public domain. In other words, as per Motif, Impossible’s patent refers to methods that were already in common knowledge. Without getting too deep into IP defensive and offensive strategies, if approved in the court of law, then the likelihood is Impossible’s original petition against Motif will be nullified and no doubt competition in the alt-protein industry will intensify.
Something to Chew On
While the legal outcome remains uncertain, this case has highlighted the growing importance of food-related patents to protect innovation and strengthen the competitive moat of a business in a sector that traditionally relied on other IP assets such as trade secrets, to protect unique recipes or a secret sauce. As a result, a rise in food patenting activity could easily lead to an increase in patent-related disputes as the market grows and the stakes get higher. Previous academic and market studies have often suggested an increase in VC funding could be correlated with increase patent litigations. However, many indicate to a tipping point when a significant rise in patent litigation in a technology field consequently reduces VC funding in that field.
It’s too early to tell when and if that tipping point may come in the alt-protein industry, but what’s certain is that as the global population continues to grow and we search for new and sustainable food sources, demand for alt-protein products will continue to rise. Perhaps in the future it’s the food groups who might dominate the patent dispute headlines, ahead of the usual suspects like Samsung and Apple (the non-food group)!
Written by Juhi Agrawal, Senior Business Analyst