Innovation in patent tactics over coffee Stefano John / NAIP Education & Training Group , European Patent Attorney
One of the large Swiss-based multinational company Nestlé’s most successful brands is Nespresso. Nespresso is a machine which makes single shots of espresso coffee. (Please see picture here below.) It involves using a specific machine with specific capsules containing coffee to produce a single shot of espresso coffee for each capsule. It has been a great success, especially in the European market.
The success of the Nespresso has led to many competing commercial activities in Europe to try and even compete by producing and selling generic versions of the machines or capsules at a discount to the Nestlé branded one. This has led to Nestlé to use its IP in Nespresso to try and defend its monopoly as much as possible and many IP battles across Europe against competitors.
One of the most notable instances was in the UK, where Nestlé used contributory infringement of EP2103236 and tort laws to sue Dualit, which produced a competing machine and capsules. The machine itself was outside the scope of patent EP2103236, but the capsules were suitable for the Nespresso machine and therefore Dualit could be accused as contributory infringers under the scope the patent.
This case was interesting because it introduced a problem very particular to European patent law – poisonous priorities. Basically EP2103236 enjoyed only partial priority from its priority application. In the priority application, the machine was described as having a housing for capsules that could only work if the capsule were in certain positions (offset and/or inclined), while in the patent being tried, EP2103236, the claim had been amended to allow the housing to work in positions in between.
Normally this would not be a problem because adding related subject matter to a priority is acceptable, but Nestlé let the priority also be published. This creates a problem in European patent law because the claim being used to sue Dualit enjoyed priority in part and that part, because of the manner in which the claim was drafted, could not be separated by the part that did not enjoy priority. As a result part of the claim in the trial was anticipated by the priority publication and this rendered the entire claim invalid. Thus Nestlé lost the case due to an unfortunate set of circumstances that originated of their own making and this case is now famous within European patent jurisprudence.
The same patent was also fought over at the EPO, where a group of generic companies attacked Nestlé’s patent. This was decided after the UK decision, but due to the manner in which it was attacked and the approach used by EPO proceedings, the EPO came to a different conclusion. The conclusion was that the claim had no basis in the application as filed and therefore the patent was rendered null and void for added subject-matter.
There is a now an escalation of the battle between Nestlé and the generic companies. One of the opponents at the EPO was a company called Ethical Coffee Company (ECC). ECC is an independent Swiss company set up in 2008 to produce coffee capsules suitable for use with the Nespresso machine. It markets itself as selling biodegradable capsules.
It has apparently obtained a granted EP patent to using hooks in a machine for use with capsules to release them from the machine after use. It recently started proceedings against Nestlé in French courts because it alleges that Nestlé introduced a “harpoon mechanism” into its machines in 2010, which grips the capsule and retains it in the correct position during and after emptying. This harpoon mechanism (which, ECC contends, is in the form of a barbed hook within the capsule extraction housing) apparently stopped ECC’s capsules from working properly in Nespresso machines. Nestlé also has attacked the validity of the ECC patent before the EPO in oral proceedings which are still on-going.
ECC does not have a dominant position in the sale of coffee making machinery (or not yet – they associate their name with a machine called U machine) for use with capsules but only sale of capsules to be used with other (i.e. Nespresso/generic) machines, and yet ECC are piling pressure on Nestlé by using patents. What is interesting in that the coffee wars across Europe are illustrating how generic companies are using novel ways to attack the leader in the market in trying to remove obstacles to their entry in the market (which is basically their business model). In the case of Dualit, this was through careful attention to details of the EP priority and finer details of added subject matter, while ECC has actually filed patents to cover the modifications to Nespresso machinery which it requires to complement the sale of its own capsules. What is also clear is that if one wants to maintain one’s position in the market, like Nestlé, one needs to carry on developing and innovating (and protecting the advances) before the generics enter the market.
Author:
Stefano John, European Patent Attorney
Experiences：
European Patent Attorney, Bryers
Trainee European Patent Attorney, Bugnion SpA
Trainee European Patent Attorney, Notabartolo & Gervasi
Internship, EPO
