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Federal court rules in favor of Innovation Associates in 2006 patent-infringement case

BY Alaric DeArment

NEW YORK — A federal judge has ruled in favor of pharmacy technology manufacturer Innovation Associates in a 6-year-old case brought by ScriptPro concerning a component of one of Innovation’s dispensing robots, the companies said.

Mission, Kan.-based ScriptPro sued Johnson City, N.Y.-based Innovation in 2006, alleging that the output shelves on the latter’s PharmAssist Robotx automatic dispensing system infringed ScriptPro’s U.S. Patent No. 6,910,601, but U.S. District judge Carlos Murguia of the U.S. District Court for the District of Kansas ruled late last month that the patent was invalid.

"Innovation is delighted with judge Murguia’s ruling," Innovation CEO Mary Reno said. "It removes uncertainty in the marketplace and allows Innovation to sell its products to its customers without baseless threats of infringement."

ScriptPro said it would appeal the ruling to the Court of Appeals for the Federal Circuit, where it said the case would be reviewed de novo, meaning that the court would be allowed to re-examine the evidence and patent interpretation without being bound by the rulings and interpretations of the court at this level. ScriptPro further said that the U.S. Patent Office had reaffirmed that the ‘601 patent was valid. Meanwhile, Innovation said it also filed a counterclaim against ScriptPro, alleging that the latter "tortiously" interfered with Innovation’s customer relationships and saying that the case would be tried in the near future.

"We strongly believe that the ScriptPro patent that is the subject of the [Innovation Associates] case is a substantial invention, that all of the patent claims are valid and that the patent has been infringed by IA," ScriptPro president, CFO and CEO Mike Coughlin said. "And while the court proceeding will now be extended by appeal, we maintain our belief and expectation that we will ultimately prevail."


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Giant-Carlisle completes acquisition of Genuardi’s stores in Philadelphia

BY Allison Cerra

AMSTERDAM — A division of Ahold USA has completed its acquisition of stores in the greater Philadelphia area.

Giant-Carlisle officially closed its acquisition of 15 Genuardi’s stores, a subsidiary of Safeway. The deal was previously announced in January and was approved by the Federal Trade Commission last month.

As previously reported, during the conversion process, five stores at a time will temporarily close for about a week. The three-phase staggered approach is expected to be completed on July 22.

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Study finds traditional grocery stores, food brands may fall out of favor

BY Allison Cerra

NEW YORK — It seems that traditional grocery stores and established food brands may lose their position in the market due to a confluence of changing demographics, economic factors and customer preferences, according to new research from global investment bank Jefferies and global business advisory firm AlixPartners.

In their study, "Trouble in Aisle 5," the companies surveyed 2,000 consumers ages 18 years and older and found that millennials — those consumers born between 1982 and 2001 — are positioned to become the next "mega-generation" as baby boomers — those born between 1946 and 1964 — move into the next phase of their lives and consequent shopping patterns.

"We envision an environment that will require increased nimbleness and a relentless focus on the consumer for established food manufacturers and retailers, and the potential for rapid growth for new concepts and products," said David Garfield, managing director at AlixPartners and head of the firm’s consumer products practice.

Millennials, the study noted, present a strikingly different attitude towards consumption than their baby boomer parents and grandparents. For them, convenience outweighs loyalty. "Trouble in Aisle 5" found they are 23% less likely to value food brands in their purchasing decision and 18% less likely to shop at traditional grocers, a major shift from baby boomers’ shopping priorities. In line with this, millennials are much more willing to explore different distribution models (i.e., online shopping, smartphone shopping, delivery services, etc.) and spread their shopping across different brands and channels (i.e., mass merchants, club stores, drug stores, convenience stores, online, etc.) to fulfill their shopping needs. Interestingly, most of the millennial demographic is price sensitive but are willing to pay more for the specific attributes they value: convenience; freshness; health; variety (of flavors, international/ethnic cuisines, product sizes, etc.,); and natural/organic (58% of millennials, compared with 43% of baby boomers).

"Millennials clearly present significant challenges, and food-makers and traditional grocery retailers need to start making changes now to address the emerging needs of this demographic group, as in many ways we’re just in the second inning of this ball game," said Scott Mushkin, managing director and senior equity research analyst covering food and drug retailing and packaged food at Jefferies.

Although millennials’ prominence continues to rise, Jefferies’ and AlixPartners’ study noted that baby boomers continue to maintain significant influence on traditional center-of-the-supermarket purchases, although they are set to move out of their peak-earnings years into retirement and will be more reliant on fixed incomes by 2016. Because of this, appears less willing to pay additional money for what they desire.

Overall, the study concluded, food-makers and grocers will have to adjust to meet the needs of both millennials and baby boomers as they age and as their finances, preferences and choices change.

"In addition to adjusting to a new financial situation, baby boomers are now paying greater attention regarding their food choices as a means of remaining healthy and extending longevity," said Rich Vitaro, director in the consumer products practice at AlixPartners. "Taste, freshness and quality will continue to be important, as will products addressing health and wellness and specific dietary needs tied to aging."

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S.JOHNSON says:
Jul-13-2012 01:42 pm

The food price, value, service equilibrium is ready-2-eat and heat-N-eat food. The price, value, service equilibrium is resetting in Grocery stores, Restaurants and Convenience stores. Enter the grocerant niche with ready-2-eat and heat-N-eat fresh and prepared food. Consumers are looking for new products, new packaging and time saving options. They have found them in ready-2-eat and heat-N-eat food. They are attracted by the fresh prepared focus, new portion size, and price points. Which provide a strong margin for increased profitability for the retailer? All food sectors have noticed a discontinuity in consumer food shopping behavior and all are fighting for share of stomach. Contributing to this displacement is a focus on short term market metrics particularly price and away from the consumer. Which in turn has caused a loss is consumer traffic in some sectors. There are other attributes that are much more important to the consumer, yet many don’t take time to look. Most consumers lack the knowledge, know how or desire to cook from scratch. Meal assembly is key to a successful family meal. Most preparation is comprised of utilizing fresh prepared components that are ready-2-eat or heat-N-eat. Restaurants, Grocery store deli’s, Convenience stores, Drug Stores and even Dollar stores are sell meal components that are mixed and matched then bundled into a family meal. What kind of food are you selling and where can it be consumed?

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