1 October 2020

The coffee pot that keeps on brewing

To coincide with the 2020 International Coffee Day on the 1 October, Associate Henry Aldridge explores the history of the patents and disputes around one of the world’s favourite beverages in the push for patent protection.

The legend goes that coffee was first discovered in the ninth-century by a goat herder named Kaldi. Since then, it has exploded in popularity, with more than two billion cups of coffee now being consumed around the world every single day. With such a large global market comes a huge number of competitors constantly vying for an edge.

One of the earliest of those was John Dring, who was granted a patent as far back as 1771 for his invention of instant coffee. Since those early days, the industry has continued to churn out improvements and file for patents, with no sign of a slowdown. A search of the Espacenet global database shows that over 3,500 patent applications having “coffee” in their title or abstract were published in 2019, an increase of over 50% compared to 2009.

It is perhaps unsurprising that there is still so much development and still such a push for patent protection. In this highly competitive arena, many companies have found that this is one of the best ways to enable them to establish themselves in the market.

A notable example of this is Nestlé’s Nespresso machine, the first example of which was launched in 1986. Nestlé pursued intellectual property (IP) relating to Nespresso fiercely, so much so that in 2010 it was reported to have 1,700 patents yet to expire covering the Nespresso system. Nestlé has been active in using this portfolio to try to prevent competitors from both selling competing machines and competing capsules for use in Nespresso machines. Through this approach, Nestlé managed to ensure that Nespresso had little competition for many years.

It was not until around 2012 when some of Nestlé’s important patents began to expire that Nestlé really started to lose its grip on the market. The expiration of Nestlé’s patents over the years forced it to change its strategy to attempt to continue protecting its products. This was particularly the case for attempting to prevent competitors from selling rival capsules that were compatible with Nespresso machines, despite these capsules no longer benefiting from direct patent protection.

After direct patent protection had expired, Nestlé attempted to protect the capsules using a three-dimensional trade mark, which ultimately proved unsuccessful. Another ultimately unsuccessful attempt was to claim that selling Nespresso-compatible capsules amounted to indirect infringement of one of Nestlé’s patents directed to a system comprising both a Nespresso machine and a capsule. The vast sums of money that Nestlé and its competitors are willing to spend to fight these lawsuits goes to show just how much this market is worth. Dualit, for example, reported that it has spent around £1 million in legal costs fighting a patent suit before the UK High Court.

Even though these additional attempts were unsuccessful, Nestlé’s general strategy of a strong pursuit of IP was a success. This can be seen from the fact that Nespresso is arguably still the biggest player in the coffee capsule world and still has a substantial market share, years after this market opened up to others. Using the 20-year patent term to establish a strong presence in a market can clearly be of great benefit, essentially giving a head start over the eventual competition.

Even in other markets, where patent protection has not existed for the core features of products in many years, a strong pursuit of IP is still a well-used strategy. As an example, coffee shops commonly use espresso machines to make coffees. The first patent for the espresso machine was reportedly awarded to Angelo Moriondo in 1884, with significant developments occurring in the early 1900s. While it is certainly the case that new developments can occur allowing for further patents to various aspects of espresso machines, the core functionality is now long out of patent protection, allowing anyone to set up a coffee shop having an espresso machine.

In spite of this, the major coffee brands are constantly looking for other ways to use IP to get an edge over each other. The Espacenet database shows that Starbucks, for example, has filed over 587 patent applications worldwide for inventions ranging from beverage cups to spirit-infused coffee beans and even methods of enhancing the flavours in your coffee. Given that Global Industry Analytics recently reported that the global market for coffee shops is expected to reach US $237.6 billion by 2025, it quickly becomes clear why these companies continue to try to create and protect new parts of this market for them to exploit.

Of course, patent strategy is just one part of the overall approach to IP for these coffee shops. Branding is hugely important in the market for attracting customer, and the major coffee shops spend a great deal of time and money strongly protecting their brands. A notable recent example was Starbucks’ successful opposition of the Coffee Rocks mark, in which the EU General Court decided that the similarity between the logo chosen by Coffee Rocks and the well-known Starbucks logo led to a likelihood of confusion between the brands.

This goes to show that even in those areas as seemingly basic as that cup of coffee you drink each morning, companies are willing to put in a huge amount of time, money, and effort behind the scenes in the pursuit of IP to capitalise on those markets.