The agreement will bring an end to legal challenges brought against the exclusive license deal for the SweeTango variety apple, said Dennis Courtier, owner of Pepin Heights Orchards.
“It is good to have this behind us,” Courtier said Sept. 20.
The structural issues of the case were decided in February, he said.
A group of Minnesota growers had challenged the licensing deal the University of Minnesota had with Pepin Heights in a lawsuit filed last year, claiming Pepin Heights held a near monopoly on a variety developed using public funding.
Minnesota’s Hennepin County District Judge Lloyd Zimmerman in February had dismissed the antitrust claims, stating that Pepin Heights cannot be liable for entering into an agreement with the University of Minnesota since antitrust statutes don’t apply to the university.
He ordered a mediation period between Pepin Heights and the group of Minnesota growers to resolve remaining issues.
The settlement, which still must be formally approved by Zimmerman, will allow Minnesota growers to plant the SweeTango variety in limited though slightly larger volumes to sell directly to consumers.
The settlement agreement will raise the number of SweeTango trees that any one Minnesota orchard can produce from the current level of 1,000 trees to 3,000 trees by 2017. The total number of Minnesota-grown trees outside the cooperative will be capped at 150,000 by 2017, up from 50,000 trees now. Growers won’t be allowed to pool volume and sell their fruit to the wholesale market.
“We want the variety to be successful for Minnesota growers,” Courtier said.
Pepin Heights Orchards, Inc. entered into an exclusive North American licensing arrangement with the University of Minnesota in December of 2005. Pepin Heights then formed Next Big Thing, a growers’ cooperative, and sublicensed use of the SweeTango variety to the co-op in July of 2006.
Courtier said the Next Big Thing cooperative includes about 45 growers spread out over five time zones in North America, ranging from Washington state to Nova Scotia Canada.
He said the agreement between the University of Minnesota and Pepin Heights involves the plant patent and the trademark. Plant patents are granted for 20 years from the date of application, so Pepin Heights has the exclusive legal a use of the patent for that period.
“Beyond that, we created the trademark SweeTango for the fruit itself,” he said.
That will give Pepin Heights exclusive use of the SweeTango name going forward.
While declining to provide specific volume estimates, Courtier said Next Big Thing will have about three times the volume of SweeTango this year compared with a year ago.