Dualit wins battle over Nespresso patent A small British manufacturer has struck at the heart of the $10bn coffee capsule market after a UK court ruled that its pods do not infringe patents on the world's largest food company's Nespresso machines. In a classic David versus Goliath case, the High Court of Justice ruled in favour of Dualit, which sells capsules that fit Nestlé"s Nespresso machines and typically cost about 12 per cent less than Nespresso's own brand. The ruling is a blow for Nestlé, which has a higher sales density for Nespresso machines at its stores than Louis Vuitton can boast for goods in its shops. It is "the closest thing to a luxury brand within fast-moving consumer goods," according to Jamie Isenwater, an analyst at Deutsche Bank. He estimated the division has annual sales of SFr4.5bn ($4.76bn) and produces some of the company's biggest margins. Leslie Gort-Barten, the managing director of Dualit, who commissioned a factory to produce rival coffee pods while the case was still in court, said his counsel was dwarfed by that of Nespresso. "They had a whole football team or even rugby team of lawyers; they tended to outnumber us five-to-one," he said. Even so, Mr Gort-Barten said he ran up legal bills of about £1m, a hefty cut for a company with revenues of £15m - or about the same as Nestlé generates in a matter of hours. "It was a big risk," he said. But that's the little man - he has to stand up for himself really. Nespresso said it was "disappointed" at the latest judgment. We believe the decision is inconsistent with the ruling by the European Patent Office in April 2012, confirming the validity of a key patent for the Nespresso system. We are currently reviewing the judgment and will make a decision on next steps in due course," said Daniel Weston, general counsel of Nestlé Nespresso. Bigger names have also sought to penetrate Nestle's formidable fortification of patents, including DE Master Blenders, the coffee producer that was once part of US conglomerate Sara Lee. But European court hearings have tended to drag on and while they deliberate many retailers are reluctant to sell rival capsules.