Sundeep Aurora, president of Bioplus life sciences, claimed that the Chinese manufacturers and importers involved in the case did not appear to have their own process patents and making quality sucralose without it was “almost impossible” unless infringing existing ones.
However the allegations were dismissed by Changzhou Niutang and its American subsidiary, US Niutang, along with Guangdong Food Industry Institute/L&P Food Ingredient Co (GDFII/L&P), which were named in the T&L complaint.
They insisted they had respected intellectual property rights and preferred to protect the confidentiality of their proprietary technologies, rather than turn to patents.
The debate comes after Judge Charles Bullock, the Administrative Law Judge at the US International Trade Commission (ITC), rejected the infringement allegations made by T&L relating to the sale and importation into the US of certain sucralose, sweeteners containing sucralose and related intermediate compounds. The complaint was filed against a number of companies last April.
However, Aurora said of the ruling: “It is a surprising decision considering there is no specific public record of patents being filed by Chinese producers which suggest an improvement to T&L’s process patents or Bioplus (Pharmed) patents.
“This then begs the question how they are able to compete on price and quality without infringing existing patents.
“We know from experience that it is near impossible to produce high quality sucralose without either creating new intellectual property as Bioplus has, or infringe on T&L’s patents.
“The combination of over 50 patents by T&L or Bioplus is a very formidable challenge to quality non-infringing production of sucralose.”
In 2006 the Indian firm Pharmed Medicare said it had developed an alternative process for the production of sucralose, a disclosure that at the time sent ripples of concern through the investment world, causing a dip in Tate & Lyle share prices.
It has since launched its Solo sucralose brand for use in food and beverages, which it claims is made from “unique proprietary patent pending technology”.
Aurora said that Bioplus (Pharmed) had filed its patents relating to sucralose in markets around the world, including the US.
First generation technology
Fusion Nutraceuticals has also recently launched is own sucralose brand, called SucraPlus. This is made in India by Fusion's partner Alkem and the technology is based on expired first generation patents of Tate & Lyle. Fusion said that it has a "clear and respectful" IP position with regard to Tate & Lyle, which is using third generation technology for sucralose production.
Angus Flood, Fusion marketing and sales director, said: “It is difficult to manufacture sucralose to first generation technology, if you are going to be completely cleaner than clean, without serious intellectual capital and investment.
“It is not an option to a small manufacturer but it is an option to a large manufacturer who takes a longer term view.
“If it is expired there is no infringement but you have got to have a very detailed procedure at every level in manufacturing and quality process and paper work to prove that is exactly what you are doing.
“There are lots of temptations to cut corners and this may infringe second, third or fourth generation patents.”
Intellectual property
A spokesperson for Niutang said: “Companies can and often do protect their technology through trade secrets rather than patents, especially for processes, since patents are public disclosures.
“Niutang has developed its own unique process by taking prior art, public domain processes and improving them through its own proprietary technology. By doing so, it's able to make commercial volumes of high quality sucralose that is certified in meeting the most stringent US and European manufacturing, compliance and quality benchmarks, both efficiently and economically.”
A spokesperson for GDFII/L&P said it has also developed proprietary methods of producing sucralose in a cost-efficient and highly quality controlled manner.
They added: “Being the first manufacturer of Sucralose in China has enabled GDFII/L&P to build a more specialized knowledge of the unique properties of manufacturing Sucralose and the scale-up of manufacturing while always conforming to JECFA (Joint FAO/WHO Expert Committee on Food Additives), FCC (Food Chemicals Codex) & USP (United States Pharmacopeia) international standards.”
“GDFII/L&P has accumulated significant proprietary intellectual property that we have chosen not to patent in order to better maintain its confidentiality.”
GDFII/L&P has an alliance with Ingredient Specialties Inc (ISI), based in California, which provides a global distribution network that markets Züeit, the sucralose brand that is a registered trademark of ISI.
Roger Matkin, CEO of ISI, said: “GDFII/L&P has indeed been respectful of IP and continue to use its proprietary technological know-how to market many unique natural ingredients, at par and in some cases superior to other industry giants.”
Plans to appeal
T&L said yesterday that it intends to petition for an appeal of the decision by the full Commission before the final determination, due before January 2009.
Robert Gibber, general counsel of Tate & Lyle, said: “We would not have proceeded with an ITC case unless we believed we had adequate evidence to demonstrate that our patents are being infringed.”
Globally, the high intensity sweetener market is worth $1.3bn. Sucralose is the number one sweetener by value in food, with a 36 percent share. North America is the world’s largest market for high intensity sweeteners and sucralose is the leader with a 48 percent share of the market.
In the last financial year, up to the end of March 2008, sucralose accounted for 21 percent of T&L’s operating profit. It has stated that one of the key ways in which it defends its competitive advantage is its patent portfolio which includes process, product form and blend patents.