nestle company

Paula Nelson General Counsel - Intellectual Property

IP Management @ Nestlé

2nd March 2007

IP Management @ Nestlé - 2nd March 2007

2 Finance & Control

• Nestlé Sales (2006)CHF 98.5 billionUSD 80 billion

Nestlé in the Global Food Market

98.5%1.5%

Nestlé

Others


3 Finance & Control

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The World's largest Food and Beverage Company in 2005


4 Finance & Control

Nestlé in Figures 2006• Worldwide Sales: CHF 98,458 mio

• EBIT: CHF 13,302 mio

• Net Profit: CHF 9,197 mio

• Factories: 487

• Employees: Around 265,000

• Organic Growth: 6.2 %

• R&D Expenditures (F&B): CHF 1.7 billion


5 Finance & Control

Our Line of Products• Soluble Coffee

• Infant Nutrition

• Confectionery

• Dairy

• Chocolate Milk Beverages

• Bottled Water

• PetCare

• Ice Cream (co-leader with Unilever)


6 Finance & Control

6 worldwide strategiccorporate brands


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Europe38.3%

AOA19.3%

Americas42.4%

Sales by regionPercentage of total F&B sales in 2006


8 Finance & Control

Nestlé R&DAn interactive Network covering four Continents

8 Research and DevelopmentCenters: Amiens (FR), Marysville,Solon (US), Shanghai (CN), Singapore(SG), Sderot (IL), Casa Buitoni (I), FS Bev. Centre Orbe

8 Product Technology Centers(PTCs): Konolfingen, Orbe (CH), Beauvais, Lisieux, Nestlé Waters (FR),St Louis (US), York (GB), Singen (D)

Nestlé Research Center (NRC)Lausanne (CH),Tours (FR),

Finance & Control


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The Group Intellectual Property Department Manages IP Rights

Worldwide


10 Finance & Control

Organisational Intellectual Property Department



Strategic and local brands are protected & managed by IPD

365Strategic

Local

Brands

6'000

27'000

Protections

82'000

Managed by 17 Regional IP Advisers (RIPA's) for local Nestlé Operating Companies

Managed by Center IP Department in co-operation with the Strategic Business Units ('SBU's) and the RIPA's



Nestlé has a substantial patent portfolio

The Nestlé patent portfolio contains as at 26.02.2007:

• 9'516 granted patents• 6'826 pending cases which may result in the

grant of a patent

The top 5 patenting territories forNestlé are: USA, Europe, Australia, Canada, and Japan



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



What is Intellectual Property ?OUTPUT OF SYNERGISTIC INTERACTION

Must be integrated to generate strategic valueA long term strategic investment

LAW

BUSINESS TECHNOLOGY

IntellectualProperty



Sources of Technology

Internally generated

Externally sourced

Licensing-in complements internal R&D



Proper Defence is fundamental

We defend our rights against any infringements, e.g.

Imitations including counterfeits Unauthorised use of patented processes Internet & domain name misuse

CybersquattingExamples: maggi.com, rowntrees.com

Derogatory use of our trademarksFor instance use of our brands in pornographic sites



... Infringements are frequent ...

Trademark infringement

+ Unfair competition

Example:



... in various parts of the world ...

Example NESTLE PURE LIFE Pakistan/Afghanistan



Russia



Counterfeiting is a multi-faceted issue ...

• customer safety

• brand protection

• corporate reputation

• profits (loss of revenue & government taxes)



What Nestlé is Doing• Protect our intellectual property

• Work with government organisations

• Enforce our rights

AND SO

• Keep our promise to our consumers



Recorded balance sheet values

31.8%

Non-recorded values

68.2%

Illustrative split of Nestlé Value (as a % of market capitalisation)


24 Finance & ControlFinance & Control

nestle company

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