Case Study: Nestlé - Streamlining IP to Stay on Top

Nestlé - a brand-driven company and world leader in the food sector, with US$70 billion sales in 2004 - has over the past 3 years carried out a fundamental review and overhaul of its intellectual property (IP) management structures. Nestlé's IP General Counsel, Paula Nelson, speaking at the WIPO Worldwide Academy in Geneva on September 22, outlined the principal changes made by her team, and some thoughts on the Nestlé experience.

Nestlé is a highly focused company in that 96 percent of its business is food and drink. The company's stated aim is to be number one in all its product lines, which include soluble coffee, infant nutrition, confectionery, dairy, chocolate milk, bottled water, pet foods, ice cream - to name but a few. Nestlé's sales figures show it outselling its rivals in all these lines, except for in the ice cream sector, where it shares the top spot with Unilever. But competition is harsh and the importance of active promotion and defense of its IP assets in order to stay ahead has long been understood by Nestlé's top management.

Streamlining the structure

Nestlé carries out research and development worldwide, but the parent company owns all the company's IP, which it licenses out to its subsidiaries. Prior to the overhaul of the IP department, 55 lawyers around the world were involved in trademark issues. All 55 made recommendations separately to the IP lawyers back in headquarters on how things should be done on a national or regional level, "generating more heat than light," said Ms. Nelson. The company now has 16 regionally based IP advisors reporting to headquarters, who form part of a single team.

The IP Department also revised their mission statement. This focuses on the central business goal of the company's IP-related activity: "To generate competitive advantage through development of IP rights." All decisions as to which products to protect, how, and where, flow from this.

Tackling brand proliferation

Having unified the IP Department at headquarters, the team set about tackling a second major problem. Nestlé's strongest corporate brands worldwide are Nescafe, Nestlé, Nestea, Maggi, Purina and Buitoni. But additional brand names were being created each year for the local marketplaces, with the number increasing exponentially...