US firm Ethox Chemicals is suing Coca-Cola for allegedly stealing a novel molecule the former claims it invented called ‘PEM’, designed to improve on PET by adding a gas barrier to limit bottle permeability and extend shelf life.
Ethox Chemicals, LLC and James Tanner v. The Coca-Cola Company was filed in the District of South California, Greenville Division on June 19 2012.
The plaintiffs seek to have their senior research chemist, James Tanner, named as co-inventor of the PEM molecule – bis(2-phenoxyethyl)terephthalate – on patents filed by Coca-Cola in December 2009.
South Carolina-based Ethox Chemicals (owned by Piedmont Chemical Industries), claims that Tanner “conceived of and reduced to practice” the PEM molecule before Coke’s involvement.
Plastic bottle ‘universe’ reaches beer
One disadvantage of PET was that, although appearing solid, it allowed gases (including soda carbonates) to escape, thus limiting the shelf life of products in the bottles, the filing explains.
“This gas barrier characteristic increases the shelf life of products like soda, and also expands the universe of beverages that can be shipped and stored in plastic bottles to include beer,” it adds.
Aside from having Tanner named as a co-inventor on patent and patent applications filed and assigned by Coca-Cola, the plaintiffs also “seek to hold Coca-Cola accountable for misappropriating the misusing Ethox-owned technology, including the PET molecule”.
They are seeking damages and injunctive relief barring Coca-Cola or any other party from making, using, selling, offering to sell or importing PEM or any other Ethox trade secrets.
Bitter dispute background
In February 2009, Coca-Cola approached Ethox and third party PolyTech to develop and assess a genus of molecules developed by or for Coke to provide better barrier resistance in plastic bottles, the court filing states
Tanner determined that commercial synthesis of Coca-Cola’s own compound ‘BP01’ (bis (2-benzoyloxy)ethyl) terephthalate) was not economically feasible, it adds.
So on August 26 2009, he wrote to T.Edwin Freeman at Coca-Cola’s Global Research and Innovation Group in Atlanta, offering PEM as a proposed BP01 alternative.
Freeman apparently replied on August 31 expressing Coca-Cola’s interest in Ethox’s molecule and that the “next steps would be to understand the cost structure around production, and to provide us with a high purity sample, so that we can investigate whether it meets our performance requirements”.
Samples sent to Coke…
Thus, between September to November 2009, Ethox thus sent various PEM samples to Coke so that it could assess its purity and efficacy, while the drink’s giant also requested per pound pricing information.
“Upon information and belief, after Coca-Cola became aware of the unique and innovative qualities of PEM, Coca-Cola, by its representatives, decided to steal PEM for its own,” the plaintiffs allege.
On December 2 2009 Coca-Cola filed two utility patent applications at the US Patent and Trademark Office (PTO) (12/629,657 and 12/629/379).
The plaintiff’s claim that at this time: “Coca-Cola knew or had reason to know that it had no rights to PEM and that any rights to PEM belonged to Ethox and/or Tanner”.
Ethox talks to BeverageDaily
Coke did not tell Ethox or Tanner it planned to include PEM in each application’s disclosure, but knew or should have known PEM would be disclosed when these were published, the plaintiffs claim.
Ethox Chemicals’ legal counsel, Philip Hirschhorn, from Buchanan Ingersoll & Rooney PC, told BeverageDaily.com that Coca-Cola’s alleged theft of PEM was “certainly not what any of us expect from such a company”.
He added that Ethox sought to fully exploit PEM free from wrongful conduct, and that when unfair business practices were used for wrongful business gain, the courts provided a forum to seek justice,
The Coca-Cola Company declined to comment on the case when contacted by BeverageDaily.com.