Rayovac 2005 Annual Report Download - page 26

attempt to effectively manage our raw materials costs
for the next six to twelve months. We believe we will
continue to have access to adequate quantities of
these materials.
Substantially all of our rechargeable batteries
and chargers, portable lighting products, hair care
and other personal care products, and our electric
shaving and grooming products are manufactured by
third party suppliers, primarily located in Asia. We
maintain ownership of tooling and molds used by
many of our suppliers.
We continually evaluate our facilities’ capacity
and related utilization. As a result of such analyses,
we have closed a number of manufacturing facilities
during the past fi ve years. In general, we believe our
existing facilities are adequate for our present and
currently foreseeable needs.
Research and Development
Our research and development strategy is primar-
ily focused on new product development and perfor-
mance enhancements of our existing products. We
plan to continue to use our strong brand names,
established customer relationships and signifi cant
research and development efforts to introduce inno-
vative products that offer enhanced value to consum-
ers through new designs and improved functionality.
In fi scal years 2005, 2004 and 2003, we invested
$29.3 million, $23.2 million and $14.4 million,
respectively, in product research and development.
These investments were supplemented by funds
received from U.S. government contracts. These
contracts enable us to investigate additional
development opportunities.
Patents and Trademarks
We own or license from third parties a consid-
erable number of patents and patent applications
throughout the world for battery and electric per-
sonal care product improvements, additional features
and manufacturing equipment. We have a license
through March 2022 to certain alkaline battery
designs, technology and manufacturing equipment
from Matsushita Electrical Industrial Co., Ltd.
(“Matsushita”) to whom we pay a royalty.
We also use and maintain a number of trade-
marks in our business, including CUTTER, DINGO,
GARDEN SAFE, HOT SHOT, JUNGLETALK,
MARINELAND, NATURE’S MIRACLE, RAYOVAC,
REMINGTON, REPEL, SCHULTZ, SPECTRACIDE,
SPECTRACIDE TERMINATE, STA-GREEN, TETRA,
VARTA, VIGORO and 8-IN-1. We seek trademark
protection in the U.S. and in many foreign countries
by available means, including registration.
As a result of the October 2002 sale by VARTA AG
of substantially all of its consumer battery business
to us and VARTA AG’s subsequent sale of its automo-
tive battery business to Johnson Controls, Inc., we
acquired rights to the VARTA trademark in the con-
sumer battery category and Johnson Controls
acquired rights to the trademark in the automotive
battery category. VARTA AG and its VARTA Micro-
batteries subsidiary continue to have rights to use
the trademark with travel guides, industrial batteries
and micro batteries. We are party to a Trademark
and Domain Names Protection and Delimitation
Agreement that governs ownership and usage rights
and obligations of the parties relative to the
VARTA trademark.
As a result of the common origins of the
Remington business we acquired in September,
2003 and Remington Arms Company, Inc., the
Remington trademark is owned by us and by the
Remington Arms Company, Inc., each with respect to
its principal products as well as associated prod-
ucts. As a result of our acquisition of Remington
business, we own the Remington trademark for elec-
tric shavers, shaver accessories, grooming products
and personal care products, while Remington Arms
owns the trademark for fi rearms, sporting goods
and products for industrial use, including industrial
hand tools. The terms of a 1986 agreement
between Remington and Remington Arms provides
for the shared rights to use the Remington trade-
mark on products which are not considered “prin-
cipal products of interest” for either company. We
retain the Remington trademark for nearly all prod-
ucts which we believe can benefi t from the use of
the brand name in our distribution channels.
On February 12, 2004, United executed a licens-
ing, manufacturing and supply agreement with its
largest customer at the time. Under the agreement,
United will license its VIGORO and related trade-
marks and be the exclusive manufacturer and sup-
plier for certain products branded with such trade-
marks from January 1, 2004, the effective date of
the agreement, through December 31, 2008. If the
customer achieves certain required minimum pur-
chase volumes and other conditions during the
initial four-year period, and the manufacturing and
supply portion of the agreement is extended for an
additional three-year period as specifi ed in the
2005 Form 10-K Annual Report
Spectrum Brands, Inc.
SPECTRUM BRANDS, INC.6