January 11, 2007

Keurig Sues Kraft Foods Inc. For Patent Infringement

Keurig-Logo

In a nut shell, Keurig has filed a lawsuit seeking to halt infringing sales of Tassimo T DISCS by Kraft. From what we know, Keurig has held a patent on "puncturing" coffee like capsules for quite some time (2001), and has vigorously defended it. What's odd is the fact Tassimo has been out in Europe for more than a couple of years, so perhaps this lawsuit is more for US based sales of the Tassimo T Discs. If you'd like to read more about the patent yourself you can find the full patent here. We also know the patent being defended may or may not be the K Cup patents, but may have more to do with how the Keurig system "pierces" the K Cups.

Here's what the patent says:

A beverage filter cartridge comprises an outer container with an access opening. A filter element is received in and configured and arranged to subdivide the interior of the container into first and second chambers. A beverage medium is stored in the first chamber. A lid closes the access opening. The lid has a first section overlying the first chamber and a second section overlying the second chamber. The first section of the lid is yieldably piercable to accommodate an inflow of liquid into the first chamber for infusion with the beverage medium to produce a beverage. The filter element is permeable to accommodate a flow of the beverage from the first chamber into the second chamber, and the second section of the lid is yieldably piercable to accommodate an outflow of the beverage from the second chamber to the exterior of the cartridge.

We're not going to speculate too much, but getting the piercable part of the patent approved - oucher. This really gives Keurig something to stand on.

From the Press Release:

Keurig, Incorporated, a pioneer and leader in gourmet single cup brewing in the United States, and a subsidiary of Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR), today announced that it has filed a patent infringement lawsuit against Kraft Foods Inc., Kraft Foods Global, Inc. and Tassimo Corporation in the United States District Court for the District of Delaware. Keurig asserts that Kraft's T DISC single-serve beverage cartridges infringe upon Keurig's United States Patent Number 6,607,762. Keurig is seeking injunctive relief preventing further Kraft Foods T DISC sales as well as damages for past infringement. Keurig's patent family which covers its K-Cup® line of single serve beverage filter cartridges is not involved in the lawsuit.

We'll keep you posted on how things are turning out. But not to worry too much - these things always take a ton of time and we would imagine they'll settle before you see Tassimo disappear. Heck - we might even see a countersuit. Our best advice? SIt back, relax and enjoy your cup of coffee.

Full release after the jump...

January 10, 2007 04:47 PM Eastern Time

Keurig Sues Kraft Foods Inc. For Patent Infringement

Lawsuit seeks to halt infringing sales of Tassimo T DISCS by Kraft


WATERBURY, Vt. & WAKEFIELD, Mass.--(BUSINESS WIRE)--Keurig, Incorporated, a pioneer and leader in gourmet single cup brewing in the United States, and a subsidiary of Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR), today announced that it has filed a patent infringement lawsuit against Kraft Foods Inc., Kraft Foods Global, Inc. and Tassimo Corporation in the United States District Court for the District of Delaware. Keurig asserts that Kraft
's T DISC single-serve beverage cartridges infringe upon Keurig's United States Patent Number 6,607,762. Keurig is seeking injunctive relief preventing further Kraft Foods T DISC sales as well as damages for past infringement. Keurig's patent family which covers its K-Cup® line of single serve beverage filter cartridges is not involved in the lawsuit.

"Keurig is a technology company that has invested substantially in developing proprietary, innovative single cup brewing system technology that allows gourmet coffee and tea lovers to enjoy their favorite brands in a convenient, easy and consistent fashion," commented Keurig President Nick Lazaris. "We are committed to protecting our investments by enforcing Keurig's intellectual property rights."

The company declined further comment on the pending action.

About GMCR

Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) is recognized as a leader in the specialty coffee industry for its award-winning coffees and successful business practices. The Company sells over 100 high quality selections, including Fair Trade Certified
and organic coffees, under the Green Mountain Coffee Roasters® and Newman's Own® Organics brands. While the majority of the Company's revenue is derived from its wholesale, direct mail, and e-commerce operations (www.GreenMountainCoffee.com), it also owns Keurig, Incorporated, a pioneer and leading manufacturer of gourmet single-cup brewing systems. Green Mountain Coffee Roasters was recently ranked No. 1 on the Business Ethics list of "100 Best Corporate Citizens," and has been recognized repeatedly by Forbes, Fortune Small Business, and the Society of Human Resource Management as an innovative, high-growth, socially responsible company.

About Keurig

Keurig, Incorporated, a wholly-owned subsidiary of Green Mountain Coffee Roasters, is a pioneer and leading manufacturer of single-cup brewing systems. Keurig's proprietary brewing system combines a pressurized hot water brewer with multiple varieties of K-Cup® portion packs, which feature a patented design that preserves the freshness of gourmet coffee and tea. Through licensing agreements, Keurig offers more than 100 varieties of premium branded coffees and teas in K-Cups. More than 1 billion cups of Keurig Brewed® coffee and tea have been enjoyed since 1998. For more information, please visit
www.keurig.com or call 888-CUP-BREW.

Forward-looking Statements

Certain statements contained herein are not based on historical fact and are "forward-looking statements" within the meaning of the applicable securities laws and regulations. Please see Green Mountain Coffee Roasters
' Form 10-K as filed with the Securities and Exchange Commission for a discussion of Risk Factors affecting the Company.

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Posted by Jay Brewer at January 11, 2007 8:03 AM
Recent Comments

I know I’m really really late to this but I just find it necessary to respond to Robert’s comments. After being a onetime Keurig customer I’ve come to realize that they are just a bunch of whiny bitches that walk around strutting their arrogance. And because people in this country tend to reward arrogance for some reason they will continue to reward you by jacking their prices up until the entire flock of blind sheep is paying 5 bucks a cup. When a company’s ego gets to big the consumer is who ends up getting hurt. So laugh it up now because before you know it Green Mountain will be kicking your ass, forgetting your name, and cashing your check. I’ll stop drinking coffee before I give Green Mountain another cent.


Posted by: AO at February 20, 2012 1:05 PM

any update on the lawsuit status?


Posted by: victor at July 7, 2007 1:18 AM

yeah Kraft might consider buying Green Mountain in Hell, and for a hell of a premium..Green Mountain has a solid innovative product which Kraft tried to piggy back sales. Green mountain at 162 mil vs 30 bil stands to profit any number of ways. Maxwell house, and Starbucks are both Kraft merchandise. Green mountain could very well be licensed and slotted alongside maxwell house like Starbucks. On the other hand I suspect Green Mountains core investors and executives could reap quite a windfall if they are able to kneecap kraft foods and others who violate the patent. Green mountain really needs to enforce their patent to the wall regardless of "nuances" kraft is gonna pay through the nose and they should. Way to Go Green Mountain...Kick ass take names and cash checks.


Posted by: Robert at February 27, 2007 9:23 AM

Let's look at reality. Green Mountain has in the range of $162 million in annual sales. Kraft Foods has somewhere around $30 billion (that's with a "B") in annual sales. If such a lawsuit presented problems for Kraft, they could afford to buy Green Mountain, with pocket change and Green Mountain knows this.

Because of this, I would not be surprised if one of the motivating factors behind this suit might have been a desire by Green Mountain, to have Kraft purchase Green Mountain for Kraft stock. It would be a way to bring Kraft to the table and it might even have the effect of sweetening the pot for them, if the case should go well for them.

Of course, this is all speculation. But, since Kraft is more than 100 times larger than Green Mountain, you have to consider the vast difference in resources. I wouldn't want to bet against Kraft.


Posted by: John Gaver at January 15, 2007 3:47 AM

So what about Nespresso?


Posted by: Joe at January 11, 2007 8:20 AM
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