Ethox Chemicals LLC, a small specialty chemical developer based in South Carolina, is suing Coca-Cola Co. over a new additive for polyethylene terephthalate (PET) bottles [1], [2].  Ethox is claiming that the beverage giant misappropriated its molecule bis(2-phenoxyethyl) terephthalate (PEM), an additive designed to enhance the gas barrier properties of plastic containers made from PET.  Ethox says PEM can be used to reduce gas permeation which might help extend bottled soda shelf-life and allow beer to be sold in PET bottles.

In a suit filed June 19 with the U.S. District Court in Greenville, S.C., Ethox argues that Coke filed patent applications (see US2010/0143547 and US2012/0121837) for PET containers containing the gas barrier additive, despite knowing that it had no rights to the molecule.  Moreover,  the US patent office recently granted a patent on US2010/0143547, issued as US Patent No. 8,110,265 (February 7, 2012).  Several international applications are also co-pending.

In its patent applications, Coke neglected to name the additive’s inventor, Ethox senior research chemist James Tanner, with the “intent of misappropriating the PEM molecule for its own use,” the suit alleges.  According to the filing, Coke approached Ethox (and research firm PolyTech Resources LLC) in early 2009 about developing and evaluating a genus of molecules designed to enhance the gas barrier properties of PET bottles.  In August 2009, Tanner conceived of and synthesized the PEM compound after determining that it was not economically feasible to make Coke’s own patented gas-barrier additive, bis[2-(benzoyloxy)ethyl] terephthalate.  In an email to Coke, Tanner then proposed PEM as an alternative additive for PET bottles with improved gas permeability.

Coke expressed interest in the molecule and asked Ethox to send Coke a high-purity PEM sample for testing.  From September to November 2009, the parties corresponded about the material — and Ethox sent Coke two samples of PEM and offered estimated per-pound pricing.

“Upon information and belief, after Coca-Cola became aware of the unique and innovative qualities of PEM, Coca-Cola, by its representatives, decided to steal PEM for its own,” Ethox’s attorney wrote in the filing.  In the suit, Ethox argues that Coke committed fraud and misappropriated trade secrets, among other charges.  The suit also claims that Coke violated the South Carolina Unfair Trade Practices Act.

Greenville-based Ethox is asking the court to require that Coke amend the pending applications and issued patent to list Tanner as a co-inventor.  The firm is also asking Coke to pay actual and exemplary damages, including the disgorgement of profits made from using PEM.  Ethox is seeking an injunction barring Coke from making, using, selling or importing PEM and other Ethox trade secrets.

The two parties attempted to settle the dispute out of court, but were unable to reach an agreement, according to the filing.  Ethox has requested a jury trial.  On July 13, Coke was granted a 31-day extension.  The Atlanta-based company had until August 13 to respond to the suit.

[1] Chemical & Engineering News, Vol. 90, Number 28; July 9, 2012, pg. 9



-Mike Gelbin


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