Tate & Lyle Loses Sucralose Patent Infringement Case

Tate & Lyle said it will review the ITC’s full final determination in detail when it is received and then evaluate its possible options in respect of any further appeals through the US Federal Circuit Court of Appeals.

07/04/09 Tate & Lyle has lost a patent infringement complaint case against a number of Chinese competitors. Tate & Lyle reported that the full six-person International Trade Commission (ITC) in Washington D.C. upheld in all material respects the initial ruling of an Administrative Law Judge of the ITC given on 22 September 2008 in respect of its patent-infringement case against certain manufacturers of Chinese sucralose. This represents a binding and final determination by the ITC.

The company had asked the US International Trade Commission to take action against four Chinese sucralose manufacturers and associated distributors, arguing that its intellectual property rights were being flouted.

Tate & Lyle said it will review the ITC’s full final determination in detail when it is received and then evaluate its possible options in respect of any further appeals through the US Federal Circuit Court of Appeals.

Karl Kramer, President, Tate & Lyle Sucralose said, “While this development is disappointing, intellectual property is just one of the many components which define Tate & Lyle’s formidable competitive advantage in the global sucralose business. Our manufacturing facilities operate at a level of cost, efficiency and environmental stewardship surpassed by none, producing sucralose which meets the highest standards of quality, purity and hygiene. Our business is built upon long-standing relationships with some of the world’s leading food, beverage and pharmaceutical manufacturers, as well as the established SPLENDA brand which is renowned as a high quality, reliable and trusted product in a number of markets.”

Sucralose made by Tate & Lyle is sold under the Splenda brand. It accounted for 18 per cent of the group’s adjusted operating profits in the first half of its 2008-9 financial year. Its patents for sucralose date back to the 1970s.

Last week Tate & Lyle said in a trading update that sucralose volumes and profits increased over the previous quarter although they were lower than a strong quarter in the comparative prior year period. “We continue to be encouraged by the considerable progress we are making in improving manufacturing yields as we implement process developments identified at our pilot plant,” the company said.

Sucralose manufacturer Guangdong Food Industry Institute/L&P Food Ingredient Co. Ltd. (GDFII/L&P), which was involved in the case welcomed the result.

The company noted that this final ruling confirms the initial determination issued by Administrative Law Judge Charles E. Bullock of the ITC in September 2008 that there is no violation of Section 337 by GDFII/L&P. Judge Bullock found that GDFII/L&P did not infringe any of the asserted T&L patents and that one of the patents was also invalid. T&L appealed that initial ruling and the ITC approved a full review by the Commission.

Roger Matkin, CEO/President of Ingredients Specialties, Inc. (ISI), a strategic marketing and distribution partner to GDFII/L&P, notes, "We congratulate GDFII/L&P for this hard fought victory and recognize our attorneys with the Bingham McCutchen firm, led by Washington, D.C. partner Gary Hnath, who have represented GDFII/L&P so skillfully and diligently throughout the proceedings before the ITC. Gary and his team presented the facts to the ITC as fully and completely as possible." Roger continues, "After 2 years of a careful and thorough review by the ITC, the Commission has now presented its definitive finding on behalf of GDFII/L&P."

"This is welcome news for us, especially since many potential customers have held back in ordering product until confirmation of the positive ruling by the ITC," observed Mr. Bassam Faress, Director of Sales & Marketing at ISI and spokesperson for L&P. "We can confidently assure our network of global distributors and customers that GDFII/L&P is one of a few companies whose manufacturing processes have been fully and thoroughly reviewed by the U.S. ITC and that our Zueit brand Sucralose has been determined to be non-infringing. This is very important to keep in mind as it may not be the case with other competitors now in the market."

Mr. Wang Ximin, a corporate officer of GDFII/L&P adds, "With this important victory now achieved, we are determined to aggressively expand our production of Sucralose and to position GDFII/L&P to more fully meet the anticipated high market demand for Sucralose globally."