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Interlaw – Madrid 23 march 2015 Michel Ponsard Nespresso case Strictement Confidentiel.

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Presentation on theme: "Interlaw – Madrid 23 march 2015 Michel Ponsard Nespresso case Strictement Confidentiel."— Presentation transcript:

1 Interlaw – Madrid 23 march 2015 Michel Ponsard Nespresso case Strictement Confidentiel

2 2 UGGC Avocats : un cabinet français indépendant de référence 2 Un cabinet indépendant 32 M€ CA Un cabinet de « clients » UGGC Avocats en quelques chiffres +100 avocats 25 associés 8ème Créé il y a 20 ans, UGGC Avocats est l’un des premiers cabinets d’avocats indépendants en France. Avec 6 bureaux présents sur 4 zones géographiques (Europe, Afrique, Asie et Moyen-Orient), il est l’un des rares cabinet français à disposer d’une capacité d’intervention internationale autonome. Etre un cabinet de « clients » signifie privilégier l’accompagnement régulier de nos clients sur le long terme et l’ensemble de leurs opérations, plutôt que d’intervenir ponctuellement sur un même type d’opérations pour plusieurs clients différents. Le chiffre d’affaires consolidé du cabinet s’établit à près de 32 millions d’euros en 2013. Le cabinet bénéficie d’une croissance constante de son chiffre d’affaires et de ses effectifs depuis 20 ans, sans effet de cycle. L’effectif total du cabinet est de plus de 150 personnes et comprend plus de 100 avocats, dont un tiers exerce son activité hors de France. UGGC se classe dans les 10 premiers cabinets français indépendants par le nombre de ses avocats et par son chiffre d’affaires. Chaque associé est reconnu comme l’un des meilleurs spécialistes de sa discipline; ensemble, ils couvrent tous les domaines du droit des affaires. Source : Radiographie 2013

3 Competition Authority 4 september 2014 Plaintiffs : DMC (brands L’Or espresso) in décember 2010 and Ethical Coffee Company (brand espresso) in may 2011 capsules sold in big retailers, in specialised coffee shops and on internet Defendant : Nestlé Nespresso and subsidiaries : manufacturer and seller of a part of nespresso coffee machine and of nespresso capsules for nespresso coffee machines (in aluminium) via club nespresso 3

4 Dominant position (likely) on the 2 markets Two complementary Markets (national) –Nespresso, the first to launch an espresso coffee machine –In 2012 73 % of single portions espresso of coffee machines in France sold by Nespresso –In 2012 85 % of sales of capsules compatibles with Nespresso machines sold by Nespresso 4

5 Competition in the market In 2010 first competitors started to propose capsules compatibles with Nespresso machines (plastic and transparent), DEMB with L’Or Espresso capsules then Ethical Coffee Company with Espresso capsules (from plant fibres). They filled some patent requests for their own capsules 5

6 Grounds Abuse of a dominant position consisting in particular of linking the purchase of Nespresso brand capsules to that of nespresso-brand coffee machines Link can result from contractual reasons (commercial or legal) and/or from technical reasons (a product is manufactured in a way to work only with another product). 6

7 Exclusionary Practices – 1/ Technical modifications to Nespresso Coffee machines (repositioning of seal, addition of ribbing, hooks and grooves in the extractor cage in 2011, modification of flow meter settings also in 2011, changes to the capsule perforation system in 2013) having effect to oblige competitors to adapt their capsules and finally render capsules produced by competing manufacturers incompatible with the new machines. 7

8 Exclusionary Practices (1/) Absence of evidence by Nespresso of an objective justification or of an efficiency gain steming from these technical changes 8

9 Exclusionary Practices 2/ Legal level : wording on the packaging, notice of use and warranty encouraging consumers to only use Nespresso brand capsules on Nespresso coffee machines i.e. « This machine works with nespresso capsules availables exclusively in Nespresso Club. Only the use of Nespresso capsules with Nespresso machines guarantee the Nespresso quality » «damage caused by use of capsules, other than nespresso, will not be covered by the warranty » 9

10 Exclusionary Practices 3/ Commercial level : messages encouraging consumers to only use Nespresso capsules either in press releases or TV boradcasts and in the Nespresso shops by sellers. 10

11 Exclusionary Practices These commercial and legal Practices together with the technical Practices strengthened the exclusionary effects 11

12 1st range commitments april 2014 after competition‘s concerns 1st : transparency in the technical modifications made to its machine : Nespresso undertakes inter alia to notify 3 months in advance competing capsules manufacturers who so request by means of a technical update of all modifications carried out that are liable to affect the use of the capsules in the Nespresso machine 12

13 1st range commitments april 2014 2°/ Application of the warranty regardless of the brands of capsules used In the event of a dispute, it is up to Nespresso to prove that the damage was caused by the use of these other capsules 13

14 1st range commitments april 2014 3°/ Commitment to make no comment that would discourage consumers from using competitor’s capsules This commitment will be implemented as part of a compliance programme On the basis of these range of commitments, the Competition Authority has made a market test to check if these commitments are sufficient 14

15 Improvment of the commitments by Nespresso after market test Before the hearing, Nespresso improves the comittments to take into account the results of the market test Commitments taken by all companies of Nestlé group involved in conceiving, manufacturing, distributing or after sales services of nespresso coffee machines in France. 15

16 2 nd range of commitments 1°/ Concerning warranty : absence of mention of capsules of competitors to avoid to give the impression of a different treatment for them, 2°/ Concerning the prohibition to make any comment on capsules of competitors, the sales people should mention that they are not authorised to make any comment and invite consumers to ask their question to manufacturers 16

17 2 nd range of commitments 3°/ Concerning Technical commitments : notice for communication of technical information which appears to be the most important : the information should be given at the time when the order is given to put the new machines into production without waiting until they go on sale and a minimum 4 months before the machines are released onto the market 17

18 2 nd range of commitments Technical Nespresso undertakes to give all the technical information which have an effect on the use of the capsule in the Nespresso machine and Nespresso will appoint a third party to play the role of intermediary and to avoid any transfer of confidential information 18

19 2 nd range of commitments Technical to let to competitors, via a trusted third party, some prototypes (15) of the new machines to enable them to make some compatibility tests with their capsules and, to give a notice concerning the results contemplated of the modification, In addition to that Nespresso will give to the Authority a file setting out the reasons behind each technical change 19

20 Decision 4 september 2014 The Competition Authority made these commitments compulsory since they lifted barriers of technical, commercial and legal nature to entry for other coffee capsules makers compatible with Nespresso coffee machines and are proportionated such that they do not put a brake on Nespresso’s innovation. The Authority closed the proceeding. 20

21 Conclusion 1°/ Interesting decision (even if it is only acceptance of commitments) since it illustrates I believe a new trend of decisions which obliges the disclosure of technical data (which could even be commercial data some times) by company in dominant position, 2°/ It also illustrates the necessity for a company in dominant position to justify on an objective basis its practices. 21

22 Conclusion The war continue in France on the Intellectual Property Field The chairman of the Ethical Company bring an action before the french courts for breach of one of its patent by Nespresso and claim for 150 million euros according to press release ! What else ? Many thanks to all ! 22


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