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

 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 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
 …..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
Diagnosis
profiling

Diagnosis

Treatment

Treatment
selection

Treatment

Treatment
Outcome
monitoring

>€23bn – Growth 6%-7%* >€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 Roche license fee, R&D funding,
testing milestone payments,
royalties
Out-licensing
HIV-1 group O Abbott license fee, royalties
Bayer
Roche
bioMérieux/O.T.
Dade Behring
Ortho-Clinical Diagnostics
HCV genotyping Roche license fee, royalties

Figure 2

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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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 PatentsPatents
and Technology Transfer
and Technology Transfer

Sales
•
by Product Group in 2006
Ph Nescafé, Nesquik,
ar Milo, Nestea,
m
Alcon Laboratories, ace Perrier, San
u •26.3% Pellegino
Galderma ti c
al • Beverages
s
6.8%
Kit Kat, • Chocolate
•25.8%
Smarties, • Confectionery •11.6%
Crunch, After
• Biscuits • Milk Products
Eight
•17.9% • Nutrition Nestlé, NAN,
Cooking Aids • Ice Cream NIDO, Dreyer's,
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
Nestlé's top competitors in 2006

80

70

60
Food Sales (in bn USD)

50

40

30

20

10

0
Nestlé PepsiCo Kraft Foods Unilever Coca-Cola Mars Danone Cadbury General ConAgra Kellogg's Sara Lee
Schweppes Mills

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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

FC-JUR/TM/UB – 10 January 2000

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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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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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 The Group Intellectual Property
Department Manages IP Rights
Worldwide

FC-JUR/TM/UB – 10 January 2000

 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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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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Nestlé SA
(Holding Co.)
Funding

Royalties Nestec SA
(Knowledge Co.)

Knowledge
and
Operating Licences
Company
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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 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
ininfringement
Russia
+ Unfair competition

+ Fraudulent act
with penal
sanction

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NESCAFE PLATINUM in Russia

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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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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
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becomes outdated faster.
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