Natural will pay an undisclosed sum to close the case, filed in the US in January last year.
Lipid Nutrition's conjugated linoleic acid brand Clarinol is its most valuable product, followed by the infant formula fat Betapol and fish oils. It is also a product with strong growth potential, thanks to its applications in the booming weight management market. A study on Clarinol last year found that it improves weight reduction and decreases the negative effects normally seen in people on low-calorie diets.
Widely marketed in dietary supplements, use of CLA in food has not yet been approved by US or European authorities but such a move would generate major sales from functional foods. Lipid Nutrition is hoping to obtain GRAS from the US Food and Drug Administration by the end of the year.
"Patents are extremely important to us as we have to invest a lot of money in safety, toxicity and clinical trials for our products. The case demonstrates that we are prepared to defend our patents and it has, in some ways, made the patent concerned stronger," Aat Visser, general manager of Lipid Nutrition, told NutraIngredients.com.
The market for CLA, currently worth around 40 million euros, is tightly controlled by a handful of companies that have licensed patents from US-based WARF, the technology transfer unit of the University of Wisconsin-Madison. Natural, which carries out research on lipids, has in turn licensed its patents for CLA in dietary supplements to Lipid Nutrition and Cognis, the biggest supplier of the product that currently holds about 70 per cent of the market.
Both companies are paying royalties on their sales to Natural, which in turn pays royalties to WARF. Approval for use in foods would however significantly expand the market size and provide more room for competition.
In the meantime Natural no longer manufactures CLA in the US, with all production for its customers now being carried out by licensee Cognis. The Germany company however uses a different process to manufacture the fatty acid from Loders, which "has no reason to believe that this infringes our methods", according to Visser.