UPL Ltd., an Indian chemical giant was defeated in the court last week by a small Philadelphia agrotech firm that sued it for stealing its main trade secret — & the specialist it hired to develop it.
A federal jury in Wilmington, Delaware has asked UPL and its Decco unit to give AgroFresh Solutions Inc. $31 million partly for violating its patent on a technology, which keeps apples fresh in storage after the harvest. The amount was less than a tenth of the $346.2 million that AgroFresh had sought.
Jordi Ferre, the Chief Executive Officer in a statement said that “AgroFresh is pleased with the judgement and would petition the court for an award of up to 3 times its compensatory damages based on the findings by the jury of a willful violation”. The compensatory part of the award was 7 million dollar.
Mumbai-based UPL said it is disappointed with the verdict and will appeal further. Shares of UPL closed down 0.5%.
The technology, known as SmartFresh depends on a synthetic compound that slows the maturing process. As per the lawsuit, the primary patent expired in 2015 - the year the company was spun off from Dow Chemical Co. The spinoff asked for damages for what the defendants did earlier.
That was to turn a technology whiz under an exclusive contract with AgroFresh into a type of double agent, it claimed, aiding Decco sail past the sweat equity AgroFresh had poured into its biggest source of income and develop a competing product ‘TruPick’.
The jury dismissed UPL & Decco’s contentions that the patent should not have been issued, and their dispute that they had used public information to launch TruPick. It apparently noticed some merit in the defense’s description of the proposed damages as “astronomical.”
Lawyer of the defendants Gerald Ivey in his closing argument said, “Competition could be fierce, ladies & gentlemen, and it’s no different here”. The technology behind a firm apple is sophisticated. The compound is very volatile in gas form, a big hurdle to its commercial use. Researchers of AgroFresh developed a way to stabilize the gas by entrapping the molecules in different formulations. To treat the produce, a skilled applicator dissolves a packet of powder or tablet in water in an enclosed storage space with the fruit.
According to a forecast, the international market for post-harvest treatment of produce will increase to $1.67 billion by the year 2022 - from $1.17 billion in 2017. Another forecast by the UN puts the global population at 9.7 billion by 2050, with 68% of it in urban areas, where much of the produce consumed will have to be shipped from farms.
The court papers said that in order to develop the product, AgroFresh sought the assistance of a food-science professor. UPL that was interested in buying the firm had signed a nondisclosure agreement in 2014 for access to its documents as part of the bidding process. Then in the next month, it employed an ex- AgroFresh manager, who met with the professor, who then inked a confidentiality accord with Decco & helped it develop TruPick, as per the filings.
