GSK Con­sumer in le­gal row over HUL deal

Steer En­gi­neer­ing has moved Delhi High Court seek­ing pro­tec­tion of in­tel­lec­tual prop­erty

Business Standard - - FRONT PAGE - AASHISH ARYAN

Acloud of lit­i­ga­tion hangs over the re­cent deal which saw Unilever ac­quire Glax­oSmithK­line's In­dian con­sumer busi­ness, in­clud­ing Hor­licks and Boost.

Ben­galuru-based Steer En­gi­neer­ing has moved the Delhi High Court seek­ing pro­tec­tion of the tech­nol­ogy and knowhow that it pro­vided to GSK Con­sumer Health­care in In­dia.

The tech­nol­ogy is used for the man­u­fac­ture of food and malt­based drinks such as Hor­licks and Boost.

In its pe­ti­tion, Steer En­gi­neer­ing said it had signed a con­tract with GSK Con­sumer that in­volved scal­ing up of the ‘Two Twin Ex­tru­sion Process’, be­ing em­ployed by the con­sumer di­vi­sion of the Bri­tish ma­jor. The firm had set up a pilot man­u­fac­tur­ing fa­cil­ity on the premises of one of GSK Con­sumer’s man­u­fac­tur­ing agents, for the scal­ing up of the tech­nol­ogy.

Fol­low­ing the GSK-Unilever deal, Steer is ap­pre­hen­sive that the tech­nol­ogy it de­vel­oped, along with ad­vance­ments made in op­ti­mal mea­sure­ments of tem­per­a­ture of the prod­uct, the feed rate of solids, and en­zymes, among other pa­ram­e­ters, could all be trans­ferred to Hin­dus­tan Unilever (HUL) — which it claims is against the terms of the con­tract.

Ac­cord­ing to the terms, Steer will not only pro­vide hard­ware, but also the tech­nol­ogy and know-how in­volved in the process.

The com­pany will, how­ever, be en­ti­tled to pro­tect its tech­nol­ogy and in­tel­lec­tual prop­erty if GSK were to trans­fer it to a third party, the com­pany said in its pe­ti­tion.

“There are some bits of the tech­nol­ogy that would be trans­ferred to GSK once the con­tract is over. But the bulk of it would re­main with Steer En­gi­neer­ing,” said Esse­nese Ob­han, manag­ing part­ner at Ob­han and As­so­ciates, and the ad­vo­cate for Steer En­gi­neer­ing.

The ‘Two Twin Ex­tru­sion Process’ en­ables con­tin­u­ous pro­duc­tion of ho­mo­ge­neous and finely struc­tured prod­ucts, us­ing bio-sourced or syn­thetic raw in­puts.

Hear­ing Steer’s pe­ti­tion, the court on Fri­day asked GSK Con­sumer to file an af­fi­davit de­tail­ing whether the said tech­nol­ogy, re­lated hard­ware and re­lated know-how is ac­tu­ally be­ing trans­ferred to HUL, as claimed by the pe­ti­tioner.

“It has been made clear that if there is any such move, sta­tus quo will be main­tained till fur­ther or­ders of the court,” a sin­gle judge bench of Jus­tice Ra­jiv Shakd­her said. The court will next hear the mat­ter on Jan­uary 23.

Unilever had, on De­cem­ber 3, agreed to buy GSK’s nutri­tion busi­ness and merge it with HUL in a $3.8-bil­lion deal.

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