August 27, 2002
LAKE BLUFF, Ill., and HOVDEBYGDA, Norway--Following an interim award announced last December, the American Arbitration Association issued its final ruling in the arbitration between PharmaNutrients Inc. of Lake Bluff, Illinois, and Natural ASA of Hovdebygda, Norway, in mid-August. The interim ruling had left a few loose ends that this final ruling has tied up.
The largest point of contention concerned PharmaNutrients' access to certain patents issued by the Wisconsin Alumni Research Foundation (WARF) relating to conjugated linoleic acid (CLA) and body composition. The arbitration panel reconfirmed PharmaNutrients' access to certain WARF patents, specifically 5,554,646; 5,428,072; and 5,430,066, which had been granted to the company as part of a Supply License Agreement signed when the two firms dissolved their joint venture in 1999.
"Natural ASA was claiming that the joint venture termination agreement between the two companies was null and void, thus preventing PharmaNutrients from having access to these patents." a PharmaNutrients spokesperson told INSIDER. "But the arbitration panel reconfirmed that our original termination agreement in 1999 did grant and continues to grant us access to these patents."
However, the breach claims made by PharmaNutrients against Natural ASA were still denied, as they had been in December, because the arbitration panel only focused on the weight-loss patents. "It was disappointing that we were unable to demonstrate to the arbitration panel the strategic importance and appropriateness of PharmaNutrients' product development program for CLA beyond body composition," said Mark Nottoli, president of PharmaNutrients. "Unaffected are PharmaNutreints' own intellectual property relating to CLA, as well as the company's recent licensing agreements with Purdue University on the application of CLA and Type II diabetes and with Oklahoma Sate University on the preparation of phytosterol esters from CLA."
Natural Inc., the U.S. subsidiary of Natural ASA, had no comment on the matter. Natural ASA owns the branded ingredient Tonalin® CLA and PharmaNutrients owns CLA One™.
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