Tate & Lyle has filed a United States International Trade Commission (ITC) case over alleged infringement of its patented sucralose manufacturing technology.
The UK-based ingredient giant said that its US subsidiary Tate & Lyle Sucralose on Friday filed the case in Washington alleging patent infringement against three Chinese manufacturing groups as well as 18 importers and distributors. The proceedings allege infringement of patented sucralose manufacturing technology in respect of sucralose manufactured in China and imported to the US. "Our sucralose manufacturing technology is protected by a robust and sophisticated patent estate, which we will defend rigorously," said Robert Gibber, general counsel of Tate & Lyle. The move comes less than a year after a filing with the US Federal District Court against a Chinese manufacturing group and six importers of sucralose into the US. According to Tate & Lyle, the suit has so far resulted in "favorable settlements" with three of the defendants in the case. "As a next step after launching our federal case in 2006, we are now ready to proceed with this broader ITC Case and so extend our enforcement action to two more Chinese manufacturing groups, who have stolen our technology, as well as their distribution networks in the US," said Gibber. For Tate & Lyle, patent protection is vital. The company has so far enjoyed a virtual monopoly of the sucralose market with its patented Splenda product. Any infringement of this would therefore represent a real threat to its core business. Tate & Lyle filed the original product sucralose patent in 1976. This recently expired, opening the product up to competitors. But firms have been reluctant to enter the market for fear of slipping up somewhere in the complex web of patents, and being slapped with astronomical legal fees and fines. In the same way, the food and beverage industry - both at manufacturing level and retail level - has not jumped at cheaper alternative sucralose products manufactured in China for fear of a legal backlash. The defendants named in last week's complaint are manufacturers Hebei Sukerui Science and Technology (and its affiliated entities Hebei Province Chemical Industry Academe, and Hebei Research Institute of Chemical Industry), Changzhou Niutang Chemical Plant (and its affiliated entity US Niutang Chemical) and Guangdong Food Industry Institute (and its affiliated entity L&P Food Ingredient). The named importers and distributors are AIDP, Beijing Forbest Chemical, Beijing Forbest Trade, Forbest International USA, CJ America, Fortune Bridge, Garuda International, Gremount International, Heartland Packaging Corporation, Lianyungang Natiprol, MTC Industries, Nantong Molecular Technology, Nu-Scaan Nutraceuticals, ProFood International, Ruland Chemistry, Shanghai Aurisco International Trading, Vivion, and Zhongjin Pharmaceutical. The ITC has jurisdiction over manufacturers of goods for importation and importers into the US (even if they are located outside of the US), as well as entities in the US who resell after importation, however small the quantities involved. The ITC has the right to exclude products from importation into the US that are shown to infringe a US patent. But as Tate & Lyle patents drop off, the marketplace is likely to see the emergence of viable competitive sucralose production, would lead to a sharp fall in the price of the ingredient. Indeed, overall sweetener prices are forecast to take a downward turn, following an increased dynamism in the sweetener industry, which is currently seeing a number of new options available after years of relative stability, according to market researcher Freedonia. A recent report by Freedonia revealed that the US sweetener market is poised to grow 4 percent per year, to reach over $1bn in 2010. And Frost & Sullivan estimates the European intense sweetener market will reach $362m in 2012.
"Up until now, sucralose has not seen the kind of price erosion that happens with high intensity sweeteners because demand has remained strong, and also because Tate & Lyle still maintain some patents on the production techniques that have really prevented new producers from entering the market in the same way," Freedonia analyst Mike Richardson told FoodNavigator-USA.com in January.