Patents and Technology Transfer
Cornelis Schüller - Group Head of Patents
Patents and Technology Transfer
Genève, 6th November 2007
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Finance & Control
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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Finance & Control
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
 Encourage
scientific/technological
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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Patents and Technology Transfer
The
Patenting Process
Trade
The
Secrets
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
 …..the
process of developing practical
applications for the results of scientific
research.
 …..the
process of transferring process
and production technologies from one
factory to another.
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Patents and Technology Transfer
Technology Transfer
 Transfer
of Patent Rights and
Trademarks
 Transfer
of Technology
 Licensing
as the Core of a Larger
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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Patents and Technology Transfer
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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Patents and Technology Transfer
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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Patents and Technology Transfer
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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Patents and Technology Transfer
Innogenetics products
(web site : Innogenetics (2007)
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Patents and Technology Transfer
Diagnostics
Specialty Diagnostics
Predisposition
profiling
Diagnosis
Diagnosis
Treatment
Treatment
selection
Treatment
Outcome
>€23bn – Growth 6%-7%*
Treatment
monitoring
>€1bn – Growth 15%*
Figure 1
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Patents and Technology Transfer
Specialty Diagnostics – Partnerships
Distribution
HCV genotyping
Bayer
license fee, R&D funding,
milestone payment,
transfer price
Co-development
rapid microbiology
testing
Roche
license fee, R&D funding,
milestone payments,
royalties
Out-licensing
HIV-1 group O
HCV genotyping
Abbott
license fee, royalties
Bayer
Roche
bioMérieux/O.T.
Dade Behring
Ortho-Clinical Diagnostics
Roche
license fee, royalties
Figure 2
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Patents and Technology Transfer
Nestlé in Figures 2006
•
•
•
•
•
•
•
Worldwide Sales:
EBIT:
Net Profit:
Factories:
Employees:
Organic Growth:
R&D Expenditure (F&B):
CHF 98,458 billion
CHF 13,302 billion
CHF 9,197 billion
481 in 87 countries
Around 265,000
6.2 %
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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PatentsPatents
and Technology
Transfer
and Technology
Transfer
Sales by Product Group in 2006
Alcon Laboratories,
Galderma
Nescafé, Nesquik,
Milo, Nestea,
Perrier, San
Pellegino
•26.3%
• Beverages
• Chocolate
Kit Kat,
Smarties, • Confectionery •11.6%
Crunch, After
• Biscuits
Eight
•17.9%
•25.8%
• Milk Products
• Nutrition
Cooking Aids
• Ice Cream
•
11.6%
Prepared
Dishes
• PetCare
Nestlé, NAN,
NIDO, Dreyer's,
Mövenpick
Stouffer's, Buitoni, Maggi•
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Pro Plan, Purina ONE,
Friskies, Dog Chow
Finance & Control
Patents and Technology Transfer
2006 World's largest Food and
Beverage Companies
Nestlé's top competitors in 2006
80
70
Food Sales (in bn USD)
60
50
40
30
20
10
0
Nestlé
PepsiCo Kraft Foods Unilever Coca-Cola
Mars
Danone
Cadbury
General
Schweppes
Mills
ConAgra Kellogg's
Sara Lee
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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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Patents and Technology Transfer
Our Brands
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Patents and Technology Transfer
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
Nutrition
PetCare
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
Russia, Israel
Switzerland
Japan
Russia
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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
Local
22'132
7'653
84'253
Strategic
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365
Status 24.10.07 / E.Dum.
Managed by 17 Regional
IP Advisers (RIPA's) for
local Nestlé Operating
Companies
Managed by Center IP
Department in cooperation with the
Strategic Business Units
('SBU's) and the RIPA's
Finance & Control
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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Patents and Technology Transfer
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.)
Operating
Company
Knowledge
and
Licences
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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’
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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
N,H and W products needed.
Finance & Control
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
ininfringement
Russia
+ Unfair competition
+ Fraudulent act
with penal
sanction
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Patents and Technology Transfer
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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Patents and Technology Transfer
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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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
becomes outdated faster.

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