2nd March 2007
Paula Nelson General Counsel - Intellectual Property
IP Management @ Nestlé
IP Management @ Nestlé - 2nd March 2007
Nestlé in the Global Food Market
1.5% 98.5%
• Nestlé Sales (2006)
CHF 98.5 billion
USD 80 billion
Nestlé
Others
2 Finance & Control
IP Management @ Nestlé - 2nd March 2007
The World's largest Food and Beverage
Company in 2005
80
Food Sales (in billion USD)
70
60
50
40
30
20
10
0
Kellogg's
Kraft Foods
ConAgra
Coca-Cola
Schweppes
Unilever
Cadbury
Nestlé
PepsiCo
Mills
Danone
General
Sara Lee
Mars
Facts and figures
3 Finance & Control
IP Management @ Nestlé - 2nd March 2007
Nestlé in Figures 2006
• Worldwide Sales: CHF 98,458 mio
• EBIT: CHF 13,302 mio
• Net Profit: CHF 9,197 mio
• Factories: 487
• Employees: Around 265,000
• Organic Growth: 6.2 %
• R&D Expenditures (F&B): CHF 1.7 billion
4 Finance & Control
IP Management @ Nestlé - 2nd March 2007
Our Line of Products
• Soluble Coffee
• Infant Nutrition
• Confectionery
• Dairy
• Chocolate Milk Beverages
• Bottled Water
• PetCare
• Ice Cream (co-leader with Unilever)
5 Finance & Control
IP Management @ Nestlé - 2nd March 2007
6 worldwide strategic
corporate brands
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IP Management @ Nestlé - 2nd March 2007
Sales by region
Percentage of total F&B sales in 2006
Europe
38.3%
AOA
19.3%
Americas
42.4%
7 Finance & Control
IP Management @ Nestlé - 2nd March 2007
Nestlé R&D
An interactive Network covering four Continents
Nestlé Research Center (NRC)
Lausanne (CH),Tours (FR),
8 Product Technology Centers
(PTCs): Konolfingen, Orbe (CH),
Beauvais, Lisieux,
Nestlé Waters (FR),St Louis (US),
York (GB), Singen (D)
8 Research and Development
Centers: Amiens (FR), Marysville,
Solon (US), Shanghai (CN),
Singapore(SG), Sderot (IL), Casa Buitoni (I),
FS Bev. Centre Orbe
8 Finance & Control
IP Management @ Nestlé - 2nd March 2007
The Group Intellectual Property
Department Manages IP Rights
Worldwide
9 Finance & Control
IP Management @ Nestlé - 2nd March 2007
Organisational Intellectual Property Department
10 Finance & Control
IP Management @ Nestlé - 2nd March 2007
Strategic and local brands are
protected & managed by IPD
Brands Protections
Managed by 17 Regional
Local IP Advisers (RIPA's) for
27'000 local Nestlé Operating
Companies
6'000
Managed by Center IP
82'000 Department in co-
operation with the
Strategic Business
Strategic Units ('SBU's) and the
365
RIPA's
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IP Management @ Nestlé - 2nd March 2007
Nestlé has a substantial
patent portfolio
The Nestlé patent portfolio contains as
at 26.02.2007:
• 9'516 granted patents
• 6'826 pending cases which may result in the
grant of a patent
The top 5 patenting territories for
Nestlé are: USA, Europe, Australia, Canada,
and Japan
12 Finance & Control
IP Management @ Nestlé - 2nd March 2007
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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IP Management @ Nestlé - 2nd March 2007
What is Intellectual Property ?
OUTPUT OF SYNERGISTIC INTERACTION
BUSINESS TECHNOLOGY
Intellectual
Property
LAW
Must be integrated to generate strategic value
A long term strategic investment
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IP Management @ Nestlé - 2nd March 2007
Sources of Technology
Internally generated
Externally sourced
Licensing-in complements internal R&D
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IP Management @ Nestlé - 2nd March 2007
Proper Defence is fundamental
We defend our rights against any infringements, e.g.
Imitations including counterfeits
Unauthorised use of patented processes
Internet & domain name misuse
Cybersquatting
Examples: maggi.com, rowntrees.com
Derogatory use of our trademarks
For instance use of our brands in pornographic sites
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IP Management @ Nestlé - 2nd March 2007
... Infringements are frequent ...
Example:
Trademark infringement
+ Unfair competition
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IP Management @ Nestlé - 2nd March 2007
... in various parts of the world
...
Example NESTLE PURE LIFE Pakistan/Afghanistan
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IP Management @ Nestlé - 2nd March 2007
Russia
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IP Management @ Nestlé - 2nd March 2007
20
Russia
Finance & Control
IP Management @ Nestlé - 2nd March 2007
Counterfeiting is a
multi-faceted issue ...
• customer safety
• brand protection
• corporate reputation
• profits (loss of revenue &
government taxes)
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IP Management @ Nestlé - 2nd March 2007
What Nestlé is Doing
• Protect our intellectual property
• Work with government organisations
• Enforce our rights
AND SO
• Keep our promise to our consumers
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IP Management @ Nestlé - 2nd March 2007
Illustrative split of Nestlé Value
(as a % of market capitalisation)
Recorded balance sheet
values
31.8%
Non-recorded values
68.2%
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IP Management @ Nestlé - 2nd March 2007
24 Finance
Finance
& Control
& Control
