By CP Staff
By Ed Huyck
By Ed Huyck
By Ed Huyck
By Ed Huyck
By Ed Huyck
By Ed Huyck
Ecolab knows all about clean. Last year the St. Paul company sold more than $3 billion in cleaning products, everything from pesticides to toilet-bowl cleaners, making it the tenth largest company in the Twin Cities area, according to the Star Tribune.
As Ecolab chief executive officer Allan Schuman boasted in his letter to shareholders in last year's annual report: "Simply put, there's clean. And then there's Ecolab clean."
And then, although unstated by Schuman, there's being taken to the cleaners.
The latter is what a doctor and inventor from Broken Bow, Oklahoma, alleges Ecolab has done to him. In a suit filed in U.S. District Court in St. Paul in May, Dr. Eugene Guthery claims that because of Ecolab's "fraud" and "deception" he has "suffered damages in excess of several millions of dollars" because he won't be able to profit from his invention. Ecolab, although tightlipped about the case, says that Guthery's allegations amount to hogwash. Or perhaps chicken-wash is the correct phrase.
The focus of this dispute that Guthery claims has left him so severely fiscally wounded? Chicken carcasses. More specific, a means to "sanitize" chicken carcasses, ridding them of bacteria such as E. coli and salmonella.
According to Guthery's lawsuit, in March 1998, after almost a decade of research, he developed an acidic solution capable of eliminating bacteria from chicken carcasses in just 30 seconds. Guthery previously had secured two patents from the government for other solutions used in eradicating bacteria from meat. The latest advance was potentially important. In an attempt to reduce occurrences of E. coli and salmonella, which in worst-case scenarios can lead to death (think Jack in the Box hamburgers), the U.S. Department of Agriculture was in the midst of imposing stricter guidelines on processors of poultry and other meat. All slaughterhouses were searching for effective, efficient ways to eliminate bacteria, and Guthery believed he had found it.
Because Guthery did not have the means to mass-produce the antibacterial solution himself, he began contacting companies capable of manufacturing the product. In April or May 1998, according to the lawsuit, Guthery contacted Ecolab and exchanged information with officials there regarding his invention. On May 29, 1998 Ecolab paid to fly Guthery to its St. Paul headquarters to demonstrate the carcass-sanitizing solution. With customers in more than 160 countries and a sales staff of more than 9,000, Ecolab had the potential to make Guthery's invention the Mr. Clean of slaughterhouse disinfectants.
Before disclosing his invention, Guthery entered into a confidentiality agreement with the company. The purpose of the agreement was to allow both parties to share trade secrets without fear of them being used by the other party for commercial gain. With the confidentiality agreement shielding him, Guthery then claims to have unveiled his invention. Upon completing his three-hour-plus presentation to Ecolab officials, Guthery says he returned home to Broken Bow.
But by the end of July, Ecolab had apparently soured on the idea of working with Guthery. The Oklahoma inventor then went about seeking other commercial partners. In late 1999, according to the lawsuit, Guthery believed that he had a deal with Cognis Corporation, a large German company that manufactures cleaning and medical products.
Before the deal could be completed, however, Guthery received a fax from an associate. The missive informed him that on January 9, 2000, a patent had been granted to Ecolab, listing company employees Timothy Gutzmann and Bruce Cords as the inventors. The patent covered the very antibacterial solution that Guthery himself had invented and later shared with Ecolab under the belief that he was protected by the confidentiality agreement, according to the lawsuit.
The patent application had been filed on August 20, 1998, about three months after Guthery had made his trip to St. Paul. Guthery notes in the suit that he was "stunned and shocked" by the discovery.
Ecolab, of course, provides a different narrative of its interactions with Guthery. Calls to employees named in the suit were returned by Lois West Duffy, the company's director of community and public relations. Duffy declined to discuss the lawsuit, saying, "We just don't comment on cases that are currently in litigation."
But according to Ecolab's response to Guthery's suit, which asks the judge to dismiss the case, the company does not dispute the inventor's time line of events. Where the two sides diverge is on whether Guthery actually revealed any trade secrets to the company. In the court document, filed last week, Ecolab denies that the relevant patent "claims and covers a formulation that Guthery disclosed to Ecolab." The company further states that it "exercised good faith and fair dealing with Guthery."
Richard Butler, Guthery's San Antonio, Texas-based lead attorney, also refused to discuss the case beyond the court filing or to make his client available for comment. "If I'm not speaking, I sure don't want my client speaking," Butler says. Attempts to reach Guthery at his home in Broken Bow, a town of about 4,000 in southeastern Oklahoma, and at a friend's house were unsuccessful.
Dead chickens aside, experts in patent law say that the case is not unusual. "It happens often enough that patents sometimes have been referred to as invitations to be sued," says Mary Jane Morrison, a law professor at Hamline University. "These kinds of trade-secret discussions are fraught with difficulties of exactly the kind that have shown up here."
Dan Burk, who teaches patent law at the University of Minnesota, says many companies are wary of even talking with outside scientists because of the potential legal pitfalls. "Some companies have become very, very gun-shy and frequently will not meet with small inventors," he notes. "If they do they're very, very careful about the language in the confidentiality agreement."
The legal scholars say Guthery's case will likely hinge on two key factors: the confidentiality agreement and what is called "desk books." Inventors generally keep desk books, essentially journals, delineating their progress while working on an invention. If Ecolab can demonstrate that its own scientists were systematically working on the carcass-sanitizing solution later patented before they were aware of Guthery's work, the company will likely prevail.
Morrison says that such documents are almost impossible to fake because they must be authenticated by more than one person and show scientific progress over a long period of time. "They'd have to have a conspiracy that would be of the sort of the grassy knoll," she jokes.
Morrison also notes that because Guthery did not secure a patent on his invention, by sharing the work with other scientists he put his carcass-sanitizing solution in jeopardy. "As soon as the Oklahoma doctor tells anybody about it he's running a risk that it will no longer be a secret," she says. "And as soon as it's not a secret for whatever reason, his property disappears into smoke."
Because Guthery holds three other patents, one might presume the process was not unknown to him. Morrison says inventors sometimes find the costs of securing a patent prohibitive: Initial fees for filing a patent can run to more than $1,000. In addition most inventors will hire a patent attorney or agent to shepherd them through the process, further driving up the cost.
If Guthery is to prevail in the case, it will likely take many years and many billable attorney hours. There is some precedent, however, for this type of David vs. Goliath patent battle. Peter Roberts sued Sears, Roebuck and Co. in 1969 for patent infringement. In 1964, when he was an 18-year-old Sears employee, Roberts had invented a socket wrench. He sold the rights to the patent on the wrench to Sears for $10,000. Roberts later argued that Sears deliberately underestimated the tool's sales potential, which proved to be in the millions of dollars. He eventually received an $8.5 million settlement from the retail giant in 1989--20 years after the case was filed.
A carcass-sanitizing solution may not have quite the household sales potential of a socket wrench, but Ecolab clearly considers meat processing a valuable market. The company's 1999 annual report notes that its meat-processing division "posted record sales growth" the previous year. Whether any of those profits will filter down to Guthery remains to be seen.