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Technology of Nestle

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					        Patents and Technology Transfer




    Cornelis Schüller - Group Head of Patents

    Patents and Technology Transfer

    Genève, 6th November 2007




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            Patents and Technology Transfer


Patents and Technology Transfer
     Introduction


     The   Patenting Process

     Technology      Transfer in Theory

     Technology      Transfer in Practice

     Conclusion

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         Patents and Technology Transfer




    Introduction
     Universities/public       research

     Innogenetics


     Nestlé



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       Patents and Technology Transfer




    The   Patenting Process




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         Patents and Technology Transfer



    The Patenting Process

     Exclusive   rights vs. Full disclosure

              scientific/technological
     Encourage
     development



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             Patents and Technology Transfer


    The Patenting Process
    Patents are primarily used for,

       Protection of R&D results
       Preventing competitors from entering a certain field
       Avoid being blocked out of a field by third parties
       Cross-license to get access to third party products and
        technologies
       Marketing tool
           » Proof of innovativeness
           » Selected licensing
           » PR.
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       Patents and Technology Transfer




    The   Patenting Process

    Trade    Secrets



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           Patents and Technology Transfer



    Trade Secrets (1)
     employees    move to other companies, including
      competitors more often there is no such thing
      as ‘life-time’ employment anymore,

     education is similar if not identical in terms of
      textbooks, handbooks,scientific journals etc.,

     access  to information is universal via the
      internet,

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             Patents and Technology Transfer



    Trade Secrets (2)
       access to information is universal via the
        internet,

       retrieving information from inside or outside of a
        company is easy,

     via   internet or on discs etc. huge amounts of
        information can be transported unnoticed,
        industrial espionage is growing, think of the
        formula 1 wherein McClaren was accused of
        using Ferrari info.
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     The   Patenting Process

     Trade    Secrets

     The   Current Situation

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          Patents and Technology Transfer



     Current situation
      Patents   protect economic interests

      Patents   serve to attract investors

      „Patent   or perish‟


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          Patents and Technology Transfer


     Technology Transfer
      …..theprocess of developing practical
      applications for the results of scientific
      research.

      …..theprocess of transferring process
      and production technologies from one
      factory to another.

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          Patents and Technology Transfer


     Technology Transfer
             of Patent Rights and
      Transfer
      Trademarks

      Transfer   of Technology

               as the Core of a Larger
      Licensing
      Contractual Package

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          Patents and Technology Transfer



     Key players
      Universities/public       research

      Innogenetics


      Nestlé




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            Patents and Technology Transfer



     Universities/public research
      Bayh-Dole   Act(1980) gave universities
       control of their publicly funded patents,
      Prior to enactment the US goverment
       had 30,000 patents 5% of which were
       licensed
      Petitions for „march-in‟ rights have
       mostly been denied.

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     Universities/public research
      Association  of University technology
       managers 6000 members (w.w.)
      US univ. 3000 US patents/year.
      Research budget 40 billion USD,
       Licensing revenues 1.4 billion USD
       Top 5 institutes account for 91% of the
       revenues (Univ. Calif., Stanford,
       Harvard…)
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     University (Groningen)
     The TLG‟s profile
     Who are we and what do we do?
      The Transfer & Liaison Groep is a faculty
       department of the Office of the University of
       Groningen (RuG). We function as the main link
       between RUG academics on the one hand and
       authorities (local, regional and national) and the
       business community on the other. You can find
       us at the university’s Zernike Science Park.

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     Innogenetics 2006
     -   Product sales increased by 13.2% to reach
         €47.9 million
     -   Total revenues increased by 10.6% to reach
         €53.7 million
     -   Total income increased by 6% to €58.0
         million
     -   Operating loss from continuing operations
         €25.7 million versus €20.0 million in 2005
     -   Cash position €22.3 million

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     Innogenetics products




                         (web site : Innogenetics (2007)

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          Patents and Technology Transfer


             Nestlé in Figures 2006
     •   Worldwide Sales:                   CHF 98,458 billion
     •   EBIT:                              CHF 13,302 billion
     •   Net Profit:                        CHF 9,197 billion
     •   Factories:                         481 in 87 countries
     •   Employees:                         Around 265,000
     •   Organic Growth:                    6.2 %
     •   R&D Expenditure (F&B):             CHF 1.7 billion
                                            (1.8% of sales)
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                           Patents and Technology Transfer

          Sales by region
          Percentage of total F&B sales in 2006
                                                       Europe
                                                       38.3%
           Americas
            42.4%
                                                                      Africa, Asia, Oceania
                                                                              19.3%



 ( Excluding globally managed businesses ( Pharmaceutical, Nestlé Waters, Nestlé Nutrition)
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                    and Technology Transfer
            PatentsPatents and Technology Transfer

          Sales by Product Group in 2006
                                                           Nescafé, Nesquik,
                                                           Milo, Nestea,
Alcon Laboratories,                                        Perrier, San
                                       •26.3%              Pellegino
Galderma
                                    • Beverages

Kit Kat,   • Chocolate
Smarties, • Confectionery •11.6%                •25.8%
Crunch, After
           • Biscuits                        • Milk Products
Eight
                       •17.9%                • Nutrition          Nestlé, NAN,
                            Cooking Aids                          NIDO, Dreyer's,
                                             • Ice Cream
                            Prepared    •11.6%                    Mövenpick
                            Dishes    • PetCare
     Stouffer's, Buitoni, Maggi•
                                     Pro Plan, Purina ONE,
                                     Friskies, Dog Chow
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           Patents and Technology Transfer

     2006 World's largest Food and
     Beverage Companies




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                          Patents and Technology Transfer

         Some perspectives
                                    Sales growth 2006 (CHF b)


            Nestlé

Cadbury Schweppes

           Danone

        Coca Cola

      General Mills

             Heinz

           Numico

          Unilever

         Campbell

              Kraft

          Hershey

                      -     1,000   2,000    3,000    4,000     5,000   6,000     7,000        8,000
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     Our Brands




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     25 brands with sales over
     CHF 1 billion
     Beverages                           Chocolate, confectionery and biscuits




     Prepared dishes and cooking aids    Water




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                 Patents and Technology Transfer


     25 brands with sales over
     CHF 1 billion
     Milk products           PetCare




     Nutrition                           Ice cream   Pharma




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                    Patents and Technology Transfer


     Local tastes and needs
      Nestlé  tailors products to local tastes
         and needs:
             – around 200 Nescafé blends to answer local
               consumers expectations




     Japan     Poland   Europe   Malaysia   Africa, Greece   Switzerland   Japan        Russia
                                            Russia, Israel

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                                                                            Finance & Control
The Group Intellectual Property
Department Manages IP Rights
         Worldwide
      Patents and Technology Transfer

     Organisational Intellectual Property Department




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                 Patents and Technology Transfer

       Strategic and local brands are
           protected & managed
                   Brands                 Protections
                                                        Managed by 17 Regional
     Local                                     22'132   IP Advisers (RIPA's) for
                                                        local Nestlé Operating
                                                        Companies
                     7'653
                                                        Managed by Center IP
                                               84'253   Department in co-
                                                        operation with the
                                                        Strategic Business Units
                                                        ('SBU's) and the RIPA's
     Strategic        365
33                  Status 24.10.07 / E.Dum.
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              Patents and Technology Transfer

     Nestlé has a substantial patent
     portfolio
      The Nestlé patent portfolio contains as
      at 24.09.2007:
      10'418 granted patents
      6'173 pending cases which may result in
       the grant of a patent
     They key patenting territories for Nestlé are:
     USA, Europe, Canada, Japan, Australia, and
     more recently China and India.
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         Patents and Technology Transfer

     Most Valuable Global Brands 2006




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     Technology Transfer Nestlé




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                Patents and Technology Transfer


     Nestlé's IPRs are centrally owned &
     licensed to local Nestlé Companies...
     •   Société des Produits Nestlé S.A. is the
         registered trademark and design owner and
         Nestec SA is the registered patent owner, in
         both cases acting as nominee for Nestlé
         S.A., who is the beneficial owner
         - Central ownership applies to trademarks linked
           to strategic as well as to local brands
     •   These rights are licensed, together with
         know-how, to the Nestlé Operating
         Companies who pay royalties for their use
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                 Patents and Technology Transfer




                              Nestlé SA
                            (Holding Co.)
                                                   Funding


     Royalties               Nestec SA
                          (Knowledge Co.)

                                                   Knowledge
                                                   and
                              Operating            Licences
                              Company
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          Patents and Technology Transfer


     Joint Venture
     Nestlé is party to a number of important
       JVs:
      BPW (Beverage Partners Worldwide)
       with the Coca Cola Company
      CPW (Cereal Partners Worldwide) with
       General Mills
      Innéov with l’Oréal
      Galderma, Lactalis etc.

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            Patents and Technology Transfer

     „Innovating the Future‟
     This strategy is enhanced by the following
      continuous improvement into consumer insights
       and their translation to innovative products built on
       superior science and technology,
      harnessing the vast expertise in our research and
       development work,
      working closely with leading universities and
       outside partners on cutting-edge science and
       technology,
      recruitment of open-minded and passionate
       innovators who can bridge science, technology and
       business needs,
      bigger pioneering innovations that hit the
       “innovation sweet-spot” where best in class science
       and technology combine to deliver precisely the needed
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       N,H and W products needed.
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             Patents and Technology Transfer



     Technology transfer ….

     -   includes patents, trademarks, brands etc.
     -   extensive defence is needed against
         counterfeiting and copying.




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            Patents and Technology Transfer

     Counterfeits are a serious problem
     and a crime in most countries!
                                         Example
                                           Trademark
                                         NESCAFE
                                           infringement
                                         in Russia
                                              + Unfair competition

                                              + Fraudulent act
                                               with penal
                                              sanction



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     NESCAFE PLATINUM in Russia




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              Patents and Technology Transfer


     Universities
      rely on technology licensing groups which
       are not always experienced enough,
      license (co-own) and are therefore free to
       exploit outside of field of sponsoring
       company.
      feel the pressing need to exploit, as patents
       cost money and are perishable,
      understand that technology is only the
       starting point,
      may get additional sponsoring for further
       research, further co-development and
       licensing of IP relating to same project.
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     Biotech companies/INNX
      further develop certain fields like
       Universities,
      are tied to the Industrial results of their
       licensee,
      still rely heavily on public subsidies,
      understand that the basic, scientific steps
       are not the most rewarding as there is a
       long way to go to a final product and that is
       where a big part of the risks is located.

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           Patents and Technology Transfer

     Food Industry/Nestlé
      primarily has direct ownership of results by
       direct investment, either by full-ownership
       or in the form of JV‟s,
      intergroup licensing involves multiple
       subjects know-how, training, patents,
       trademarks,
      is more and more accepting ownership by
       developers outside their own field of use,
       especially with engineering firms,
      Starts co-development in „Open Innovation‟
       with peers.
      is more open for licensing especially since
       developments are going fast and so IP
46     becomes outdated faster.
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