Did Treehouse Foods Inc. kick off a litigation frenzy by bringing antitrust claims against Keurig Green Mountain Inc., the 800-pound gorilla in the growing market for single-serve coffee?
Following in Treehouse’s footsteps, the plaintiffs firm Grant & Eisenhofer sued Keurig Green Mountain (previously Green Mountain Coffee Roasters Inc.) and its subsidiary Keurig Inc. on Wednesday on behalf of a putative nationwide class of Keurig users. Like Treehouse, Grant & Eisenhofer alleges a “scheme to monopolize the market for the sale of single-serve disposable coffee cartridges for use in Keurig coffee brewers in the United States.”
Thanks in large part to a group of patents that expired in 2012, Keurig has a near-monopoly on single-serve coffee brewers. More importantly, Keurig also has a near-monopoly on the coffee cartridges used in these machines, which generate most of the company’s $4 billion in annual revenue. Illinois-based Treehouse and other companies are trying to erode Keurig’s market share by selling cheaper cartridges. (Treehouse is represented by Dan Webb, the chairman of Winston & Strawn.)
Grant & Eisenhofer’s case was filed in U.S. district court in Manhattan (the same jurisdiction Treehouse picked), and designated as related to Treehouse’s complaint, which was filed back on Feb. 11. Both allege that, ever since its patents expired, Keurig has tried to prolong its dominance through unsavory business practices, including sham litigation intended to bankrupt rivals.
The plaintiffs are particularly worked up over a soon-to-be-launched brewer known as Keurig 2.0, which will only be compatible with Keurig-branded cartridges. The brewers will contain so-called lock-out technology that prevents consumers from using off-brand cartridges. “This is yet another attempted end run around patent and antitrust laws,” Grant & Eisenhofer’s Linda Nussbaum and Peter Barile III wrote in their complaint.
Grant & Eisenhofer is a bit late to the party. On Monday, McKool Smith and Motley Rice teamed up to file a lengthy complaint against Keurig on behalf of a substantially similar nationwide class. A Keurig competitor, Rogers Family Co., brought similar claims on Thursday. The underdog company and its lawyers at Morgan Lewis & Bockius won a separate battle with Keurig on Wednesday, when an appeals court affirmed that Rogers doesn’t infringe the company’s patents.
Keurig responded to Treehouse’s suit in February by calling it “totally without merit.” Attorneys at Cleary Gottlieb Steen & Hamilton and Buchanon Ingersoll & Rooney are representing Keurig in the Treehouse case.