Kraft 2009 Annual Report Download - page 10

Intellectual Property
We consider our trademarks, in the aggregate, to be material to our business. We protect our trademarks by registration or otherwise in the U.S.
and in other markets where we sell our products. Trademark protection continues in some countries for as long as the mark is used and in other
countries for as long as it is registered. Registrations generally are for renewable, fixed terms. From time to time, we grant third parties licenses to
use one or more of our trademarks in particular locations. Similarly, we sell some of our products under brands we license from third parties,
including at December 31, 2009:
• Starbucks coffee, Seattle’s Best coffee and Tazo teas for sale in U.S. grocery stores and other distribution channels;
• Starbucks and Seattle’s Best coffee T-Discs and Tazo teas T-Discs for use in our Tassimo hot beverage system;
• Capri Sun packaged juice drinks for sale in the U.S. and Canada;
• Taco Bell Home Originals Mexican style food products for sale in U.S. grocery stores; and
• California Pizza Kitchen frozen pizzas for sale in U.S. grocery stores.
Additionally, we own numerous patents worldwide. While our patent portfolio is material to our business, the loss of one patent or a group of
related patents would not have a material adverse effect on our business. We have either been issued patents or have patent applications pending
that relate to a number of current and potential products, including products licensed to others. Patents, issued or applied for, cover inventions
ranging from basic packaging techniques to processes relating to specific products and to the products themselves. Our issued patents extend for
varying periods according to the date of patent application filing or grant and the legal term of patents in the various countries where patent
protection is obtained. The actual protection afforded by a patent, which can vary from country to country, depends upon the type of patent, the
scope of its coverage as determined by the patent office or courts in the country, and the availability of legal remedies in the country. We consider
that in the aggregate our patent applications, patents and licenses under patents owned by third parties are of material importance to our
operations.
We also have proprietary trade secrets, technology, know-how processes and related intellectual property rights that are not registered.
Research and Development
We pursue four objectives in research and development: product safety and quality; growth through new products; superior consumer satisfaction;
and reduced costs. We have approximately 2,300 food scientists, chemists and engineers working primarily in six key technology centers: East
Hanover, New Jersey; Glenview, Illinois; Tarrytown, New York; Banbury, United Kingdom; Paris, France; and Munich, Germany. These technology
centers are equipped with pilot plants and state-of-the-art instruments. Research and development expense was $477 million in 2009, $498 million
in 2008 and $442 million in 2007.
Regulation
Our U.S. food products and packaging materials are primarily regulated by the U.S. Food and Drug Administration or, for products containing meat
and poultry, the U.S. Food Safety and Inspection Service of the U.S. Department of Agriculture. These agencies enact and enforce regulations
relating to the manufacturing, distribution and labeling of food products.
In addition, various states regulate our U.S. operations by licensing plants, enforcing federal and state standards for selected food products,
grading food products, inspecting plants and warehouses, regulating trade practices related to the sale of dairy products and imposing their own
labeling requirements on food products.
Many of the food commodities we use in our U.S. operations are subject to governmental agricultural programs. These programs have substantial
effects on prices and supplies and are subject to periodic U.S. Congressional and administrative review.
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Source: KRAFT FOODS INC, 10-K, February 25, 2010 Powered by Morningstar® Document Research℠