DuPont 2010 Annual Report Download - page 5

Part I
ITEM 1. BUSINESS, continued
The company has a large portfolio of and is licensed under various patents. These definite-lived patents cover many
products, processes and product uses. These patents protect many aspects of the company’s significant research
programs and the goods and services it sells. The actual protection afforded by these patents varies from country to
country and depends upon the scope of coverage of each individual patent as well as the availability of legal remedies
in each country. DuPont owns about 17,600 worldwide patents and 17,300 worldwide patent applications. In 2010, the
company was granted about 700 U.S. patents and about 1,400 international patents. DuPont’s rights under its patents
and licenses, 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 reportable segment.
The environment in which Pioneer competes has been characterized by the use among competitors of new patents,
patent positions and patent lawsuits to gain advantage in commercial markets. Ownership of and access to intellectual
property rights, particularly those relating to biotechnology and germplasm, will continue to be important to Pioneer
and its competitors. Pioneer has a large collection of patents related to biotechnology and germplasm and also
licenses technology from others. Pioneer will continue to address the dynamic environment in which it competes
through a variety of means that includes protecting and enforcing its own intellectual property rights, challenging
claims made by others and, where appropriate, obtaining licenses to important technologies on commercially
reasonable terms. During 2007, Pioneer entered into a business agreement on corn herbicide tolerance and insect
control trait technologies with Monsanto Company (Monsanto). Among other provisions, modifications were made to
the existing corn license agreements; both parties agreed to exchange certain non-assert and other intellectual
property rights; and both parties obtained rights to reference and access certain regulatory data and approvals in
which the other has certain interests. For additional information, see Pioneer business discussion beginning on
page 26 and the Contractual Obligations table on page 39.
The company has about 2,000 unique trademarks for its products and services and approximately 19,000 registrations
for these trademarks worldwide. Ownership rights in trademarks do not expire if the trademarks are continued in use
and properly protected. The company has many trademarks that have significant recognition at the consumer retail
level and/or business to business level. Significant trademarks at the consumer retail level include the DuPont Oval and
DuPont (the ‘‘DuPont Brand Trademarks’’); Pioneer brand seeds; Teflon fluoropolymers, films, fabric protectors,
fibers and dispersions; Corian surfaces; Kevlar high strength material; Nomex thermal resistant material and Tyvek
protective material. The company actively pursues licensing opportunities for selected trademarks at the retail level.
Seasonality
Sales of the company’s products in the Agriculture & Nutrition segment are affected by seasonal cropping and weather
patterns. Sales and earnings performance in the Agriculture & Nutrition segment is strongest in the first half of the year.
The segment generally operates at a loss during the third and fourth quarters of the year. As a result of the seasonal
nature of its business, Agriculture & Nutrition’s inventory is at its highest level at the end of the calendar year and is sold
down in the first and second quarters. Trade receivables in the Agriculture & Nutrition segment are at a low point at
year-end and increase through the selling season to peak at the end of the second quarter.
In general, businesses in the remaining segments are not significantly affected by seasonal factors.
Marketing
With the exception of certain products in the Agriculture & Nutrition segment, most products are marketed primarily
through DuPont’s sales force, although in some regions, more emphasis is placed on sales through distributors.
Pioneer owns or uses a number of brands for its products and promotes them through multiple marketing channels
around the world. In the corn and soybean markets of the U.S. Corn Belt, Pioneer brand products are sold through a
specialized force of independent sales representatives. Products that are co-branded or marketed under other Pioneer
owned brands are distributed in this region by select seed companies. (See page 27 for a discussion of Pioneer’s
PROaccessSM business strategy.) In other North American markets, Pioneer products are marketed through
distributors and crop input retailers. Pioneer products outside of North America are marketed through a network of
subsidiaries, joint ventures and independent producer-distributors. Similarly, Crop Protection products are marketed
and sold to growers and other end users through a network of wholesale distributors and crop input retailers. Solae
4