Patent Infringement

Nestle takes legal action on Sara Lee coffee capsules

Nestle SA, the world's biggest foodmaker, began legal action against Sara Lee Corp. in France for alleged patent infringement on its Nespresso coffee system.

Nestle "will always take appropriate steps to defend our intellectual property rights when these have been infringed," the Vevey, Switzerland-based company said in an e-mailed statement today, without giving details of the proceedings.

Sara Lee started selling L'OR Espresso capsules that are compatible with Nespresso coffee machines in French stores in April. The Downers Grove, Illinois-based company is "confident our product complies with all applicable legal and regulatory requirements," spokesman Ernesto Duran said today by phone.

Sara Lee has sold 12 million capsules since it introduced the product in France two months ago, Duran said.

"We see no reason why Nespresso would take legal action against us and are confident about the outcome of the proceedings," he said.

Ethical Coffee Co., which also started selling a rival version in France last month, and Sara Lee are the first alternatives to Nespresso. Consumers who bought a Nespresso machine previously were committed to using Nestle's 16 "Grand Cru" and limited edition varieties, sold only in its own boutiques and online.

Ethical Coffee Chief Executive Officer Jean-Paul Gaillard said Nestle hasn't taken legal action against his company. Ethical Coffee's capsules use a water seal that doesn't infringe Nespresso's patents, Gaillard said today by phone.

Nestle first sold single-serve espresso for machines that don't need cleaning 24 years ago. The Swiss company cultivates the exclusive image of the coffee through boutiques that boast tasting salons in locations such as Paris's Champs-Elysees and via a magazine sent to the homes of some of its 7 million "Nespresso Club" members twice a year.

(Published by Bloomberg – June 15, 2010)

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