Keurig coffee machine (Jason Doiy / The Recorder)
Single-serve coffee brewers and the “pods” that fuel them are big business, especially now that market leader Green Mountain Coffee Roasters Inc.’s patents on the technology have expired. So it’s fitting that one of Green Mountain’s upstart competitors has hired a big-name litigator, Dan Webb of Winston & Strawn, to challenge Green Mountain’s recent efforts to maintain its huge market share.
In a lengthy complaint filed Tuesday in U.S. district court in Manhattan, Winston & Strawn client Treehouse Foods Inc. alleges that Green Mountain is violating antitrust laws by forcing business partners at every level of its distribution chain into anticompetitive agreements. Treehouse also alleges that Green Mountain is trying to stifle competition by making its Keurig coffee brewers incompatible with pods sold by rivals.
“Rather than compete for market share on the merits or fulfill its statutory obligation to enable competitors to practice its inventions after its patents expired, Green Mountain has abused its dominance,” Webb and his team wrote.
In 2006, Green Mountain acquired Keurig Inc., a Massachusetts-based company that’s credited with creating the market for single-serve coffee brewers and pods. Keurig held patents on single-serve coffee pods known as K-Cups. Thanks to those patents, which expired in 2012, Green Mountain now controls almost 90 percent of the market for single-serve coffee brewers and more than 70 percent of the market for serving pods, according to Treehouse’s complaint. In a sign of the company’s dominance and its ambitions for tacking the cold-drink market, Coca-Cola announced a 10-year collaboration with Green Mountain last week, sending Green Mountain’s stock price up 40 percent.
There’s long been bad blood between Green Mountain and Treehouse, which sells food and beverage products to offices and restaurants. In 2010, before Green Mountain’s K-Cup patents expired, Treehouse subsidiary Strum Foods launched its own coffee pods compatible with Keurig machines. A federal judge in Delaware granted summary judgment to Treehouse, and the U.S. Court of Appeals for the Federal Circuit affirmed the dismissal of Green Mountain’s patent claims in October 2013.
Another upstart, Rogers Family Co., also fended off a Green Mountain patent case last year, as we reported here. In Tuesday’s complaint, meanwhile, Treehouse accused Green Mountain of engaging in “sham” litigation.
A Green Mountain spokesperson said in a statement that the company believes the allegations are without merit and that it will defend itself vigorously.
Webb is chairman of Winston & Strawn and a former high-ranking government prosecutor. In a 2004 profile, The American Lawyer’s Susan Beck described him as “corporate America’s defender of choice” and a “plain-speaking, down-to-earth litigator with an unquenchable thirst for work.” Hopefully he likes coffee too.