Alcoa 2013 Annual Report Download - page 40

Patents, Trade Secrets and Trademarks
The Company believes that its domestic and international patent, trade secret and trademark assets provide it with a
significant competitive advantage. The Company’s rights under its patents, as well as the products made and sold under
them, are important to the Company as a whole and, to varying degrees, important to each business segment. The
patents owned by Alcoa generally concern particular products or manufacturing equipment or techniques. Alcoa’s
business as a whole is not, however, materially dependent on any single patent, trade secret or trademark. As a result of
product development and technological advancement, the Company continues to pursue patent protection in
jurisdictions throughout the world. At the end of 2013, the Company’s worldwide patent portfolio consisted of
approximately 794 pending patent applications and 1,980 granted patents.
The Company has a number of trade secrets, mostly regarding manufacturing processes and material compositions that
give many of its businesses important advantages in their markets. The Company continues to strive to improve those
processes and generate new material compositions that provide additional benefits.
The Company also has a number of domestic and international registered trademarks that have significant recognition
within the markets that are served. Examples include the name “Alcoa” and the Alcoa symbol for aluminum products,
Howmet metal castings, Huck®fasteners, Kawneer®building panels and Dura-Bright®wheels with easy-clean surface
treatments. The Company’s rights under its trademarks are important to the Company as a whole and, to varying
degrees, important to each business segment.
Competitive Conditions
Alcoa is subject to highly competitive conditions in all aspects of its aluminum and non-aluminum businesses.
Competitors include a variety of both U.S. and non-U.S. companies in all major markets. Price, quality, and service are
the principal competitive factors in Alcoa’s markets. Where aluminum products compete with other materials—such as
steel and plastics for automotive and building applications; magnesium, titanium, composites, and plastics for
aerospace and defense applications—aluminum’s diverse characteristics, particularly its strength, light weight,
recyclability, and flexibility are also significant factors. For Alcoa’s segments that market products under Alcoa’s
brand names, brand recognition, and brand loyalty also play a role. In addition Alcoa’s competitive position depends,
in part, on the Company’s access to an economical power supply to sustain its operations in various countries.
Research and Development
Alcoa, a light metals technology leader, engages in research and development programs that include process and
product development, and basic and applied research. Expenditures for research and development (R&D) activities
were $192 million in 2013, $197 million in 2012, and $184 million in 2011.
Most of the major process areas within the Company have a Technology Management Review Board (TMRB) or
Center of Excellence (CoE) consisting of members from various worldwide locations. Each TMRB or CoE is
responsible for formulating and communicating a technology strategy for the corresponding process area, developing
and managing the technology portfolio and ensuring the global transfer of technology. Alternatively, certain business
units conduct these activities and research and development programs within the worldwide business unit, supported by
the Alcoa Technical Center (ATC). Technical personnel from the TMRBs, ATC and such business units also
participate in the corresponding Market Sector Teams. In this manner, research and development activities are aligned
with corporate and business unit goals.
During 2013, the Company continued to work on new developments for a number of strategic projects in all business
segments. In Primary Metals, progress was made on inert anode technology with tests carried out on a pilot scale.
Progress has been successful in many respects as a result of full pot testing of anode assemblies, although technical and
cost targets remain to be achieved. If the technology proves to be commercially feasible, the Company believes that it
would result in significant operating cost savings, and generate environmental benefits by reducing certain emissions
and eliminating carbon dioxide. No timetable has been established for commercial use. The Company is also
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