Sweegen declares victory in stevia patent case, but PureCircle will appeal

Dive Brief:

• A federal judge last week ruled in favor of Sweegen in the patent infingement case filed against it in 2018 by stevia producer PureCircle. PureCircle argued that Sweegen’s enzymatic method to create steviol glycoside Reb M infringed on its patents, but the judge found that the patents themselves were not valid.
• Ingredion, which acquired PureCircle in 2020, said in an email that it plans to appeal the ruling “to continue to vigorously defend our intellectual property.”
• This is the final patent infringement case filed by PureCircle, which had been known as a leader in the stevia business. PureCircle also filed patent challenges against competitors Sweet Green Fields and Almendra, both of which have been resolved.

Dive Insight:

With the end of the case between Sweegen and PureCircle, the drama over stevia production may be coming to a close.

When stevia was becoming a hot new sweetener four to five years ago, PureCircle was both at the top of the game and filing lawsuits against all of the competition. Its two other legal challenges, against Sweet Green Fields and Almendra, finished in a much quieter fashion. The cases settled outside of court, and Sweet Green Fields and Almendra both signed licensing agreements with PureCircle.

The Sweegen case went on longer and with more noise because the company chose to fight back. In 2019, Sweegen filed for a review with the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office. The Patent Trial and Appeal Board issued a denial in 2019, but the federal court case never stopped progressing.

“As a holder of core proprietary technologies of wellness ingredients, Sweegen vigorously guards its intellectual property rights and respects those of others,” Sweegen CEO Steven Chen said in a written statement about the case. “We have always maintained that PureCircle’s patents were invalid and its case against Sweegen spurious.”

It’s unclear what kind of claim may be made in an appeal of the case and what new arguments may be made. But it’s notable that Ingredion seems willing to continue a legal fight started by PureCircle’s old leadership — especially considering that company executives at the time the case was brought either resigned or were ousted as financial misconduct came to light. In retrospect, a financially troubled PureCircle may have brought the cases against other companies in part to eliminate competition and bring it a much larger market share.

But with Ingredion as corporate owner, PureCircle’s former financial difficulties are in the past. Ingredion’s leadership has said it wanted to focus on PureCircle’s business turnaround, and from earnings reports, it seems those efforts are succeeding. In the most recent earnings call, Ingredion CEO Jim Zallie said that compared to a year prior, PureCircle posted double-digit net sales growth and was a “tremendous turnaround story” for Ingredion.

However, a possible appeal may be less about Sweegen’s competing products and more about PureCircle’s patents. If the patents are not valid, PureCircle’s value proposition could be diminished. More companies could develop similar technology, adding more players to a hot segment. The ruling could also have a negative impact on PureCircle’s other two patent case settlements, since the companies have agreed to pay licensing fees to PureCircle for their competing products.