Nestlé Can’t Stop Nespresso Copycats

German judge rules in favor of off-brand coffee capsules

Nestlé experienced a setback this week in its ongoing fight to keep people from buying off-brand Nespresso capsules.

According to Wall St. Cheat Sheet, a judge in Germany rejected an application by Nestlé to ban sale of "unlicensed coffee capsules" that work in its machines, which means shoppers in that country will be able to put much less expensive coffee in the Nespresso machines they own. The court ruled that the capsules Nestlé sells are far more expensive than the ones produced by competitors Betron and Ethical Coffee Co., and are not a "special feature" of the Nespresso IP.

A court spokesperson told The Local that the consumer’s right to unlimited use of their property was more important than protecting Nestlé’s interests. Competing companies in several other countries have produced capsules that work in the machines, and Nestlé is suing in several places at once. According to The Local, however, the multinational has had little success.

Nespresso capsules generated more than $3 billion for Nestlé last year, and the market for capsules is expected to reach more than $8 billion by 2014.

Nestlé is not taking the judgment lightly. "We are convinced of the power of our legal arguments and will thus take further steps to defend our intellectual property," said Holger Feldmann, head of Nespresso Germany, according to Bloomberg. Feldmann said the company plans to appeal the ruling.