Martek's European patent for oil blend revoked
DHA/ARA oil blends patent had been revoked by the European Patent
Office following challenges made by two potential competitors.
Martek says it intends, within the next few days, to file an appeal that will automatically reinstate the patent so that it will remain in force during the appeal process, expected to exceed two years.
Approximately 90 per cent of Martek's nutritional product sales are currently generated from sales of docosahexaenoic acid (DHA) and arachidonic acid (ARA) to four of the company's infant formula licencees, namely Mead Johnson, Wyeth, Abbott Laboratories and Nestle.
Thanks to such agreements, resulting in several new products in 2002, the company saw 2003 revenues more than double on the previous year, from $46.1 million in 2002 to $114.7 million, bringing it into the black for the first time in 20 years.
Pete Buzy, Martek's chief financial officer, told NutraIngredients.com earlier this year that the firm had now achieved 90 per cent penetration of the US market for DHA and ARA and was expecting to increase this to 100 per cent penetration in the United States and over 50 per cent in the rest of the world.
However problems with its European patent could affect sales in this region.
The company said in a statement: "Management believes that the outcome of this matter will not have a short-term impact on the company's sales into the infant formula industry due to its other issued patents and the automatic reinstatement process."
"However, it is possible that if the European DHA/ARA Oil Blends Patent matter is not resolved favourably, in the long term the company could experience increased competition that may result in decreased sales in Europe."
Martek says it has substantive grounds for the appeal, citing other patents in the United States, Europe and certain other areas of the world covering its individual DHA and ARA technology.
It has also been granted a patent in the United States and certain other countries on certain mixtures of DHA and ARA when used in infant formula and nutritional supplements.
The patent was revoked in a proceeding held in Munich, Germany by the European Patent Office on 11 November.
