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Tate and Lyle confident in 'layered patent strategy'

By Lindsey Partos , 02-Jun-2008

As the decision on patent infringement allegations in the US is pushed back by three months, UK sucralose supplier Tate & Lyle confirms its confidence in the outcome of the case, while Chinese sucralose competitors affirm their supplies will continue.

Earlier this month the US International Trade Commission (ITC) announced the launch of an investigation into certain sucralose products, following a complaint filed by Tate & Lyle alleging infringement of its patented sucralose manufacturing technology.

 

 

 

The date for a decision has now been dealyed, with the ITC Administrative Law Judge Charles Bullock, implementing a 90-day extension. The initial determination is now set for September 12, 2008, with a final ruling by the ITC scheduled for no later than January 12, 2009.

 

 

 

The case claims patent infringement against three Chinese manufacturing groups, as well as 18 importers and distributors.

 

 

 

In response to the ITC delay, one of the respondents in the investigation, Changzhou Niutang Chemical Plant and its US affliate, US Niutang Chemical, took the opportunity to defend its position: "From the outset, we have said that Niutang does not infringe any of the patents asserted by Tate & Lyle in this proceeding," said Licheng Wang, Jr, general manager of Niutang.

 

 

 

Seeking to reassure customers, the Chinese firm added: "We do not anticipate any disruption in the delivery of sucralose."

 

 

 

But Tate & Lyle, which has enjoyed strong financial gains on the back of a virtual monopoly for its popular sucralose sweetener brand Splenda, remains confident of the outcome of the case and the "success of our layered patent strategy," says Rowan Adams, director of corporate communications at Tate & Lyle.

 

 

 

He confirmed to FoodNavigator-USA.com today that "proof of infringement of one claim of one patent against each manufacturer is required for Tate & Lyle to prevail in the case."

 

 

"After obtaining information through legal discovery process, including plant inspections and sampling of the Chinese manufacturing processes, our legal team has focused our legal action on the areas where we believe our case is strongest," he added.

 

 

 

Niutang, equally combative, also claimed in a statement last week to be "confident of a positive outcome in Niutangs favor".

 

 

Tate & Lyle is vigorously defending its share of the sucralose market, worth an estimated €41 million in Europe alone, as the expiry dates on certain patents that the firm filed decades ago reach daylight.

 

With patent expiry comes the arrival of generics; and with generics come new market opportunities for competitive sweetener suppliers.

 

 

 

Last week, for example, Dublin and Geneva-based Fusion Nutraceuticals, in partnership with Indian pharmaceutical company Alkem, rolled out to market for the first time their IP validated sucralose.

 

 

 

Against the backdrop of patent infringement allegations elsewhere, the firm is confident that their ingredient for industrial food and beverage applications does not infringe on any patents.

 

 

 

"We are using purely expired IP for the manufacture of sucralose," Shane Delaney, CEO at Fusion Nutraceuticals told FoodNavigator.com.

 

 

 

"We have gone through significant hoops on the patents and IP, we have been very careful and respectful of Tate & Lyle, and we have a clear IP position," he added.

 

 

 

The Fusion Nutraceuticals and Alkem partnership will bring up to 200 tonnes online (full capacity) of their SucraPlus brand, produced by Alkem's new plant, implying market erosion for Tate & Lyle.

 

 

 

And if viable competition does emerge, at some point in the future market economics will start to put downward pressure on prices for the ingredient. A state of play already reflected elsewhere in the sweetener marketplace.

 

 

 

According to market researcher Freedonia, overall sweetener prices are forecast to see erosion, following an increased dynamism in the sweetener industry, which is currently seeing a number of new options available after years of relative stability.

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