Scott R. Craig / scraig@sacbee.com

San Francisco Bay French Roast pods, left, made by Rogers Family Coffee Co. compete with Keurig's cartridges, but face patent challenges.

Cathie Anderson: Coffee packager jolts coffee-machine maker

Published: Thursday, Jul. 26, 2012 - 12:00 am | Page 1B
Last Modified: Thursday, Jul. 26, 2012 - 6:43 am

Some of my readers have been doing something naughty in the morning, savoring the richness of San Francisco Bay French Roast made in their Keurig single-cup brewing system.

Well, Keurig hopes to put an end to that.

The company is suing to protect its patent on the tiny K-Cup beverage cartridges that fit inside its coffee makers, and Lincoln's Rogers Family Coffee Co. is one of the companies in its sights.

Rogers, which owns the San Francisco Bay brand, announced late last year that it would sell what it calls OneCup pods, but it didn't work out a licensing agreement with Keurig as others have done. Rogers also inked an agreement to produce single-serve coffees for Safeway.

The news is giving those who watch coffee companies plenty to talk about over their morning joe. Keurig's parent company, Green Mountain Coffee Roasters, received almost two-thirds of last year's $2.7 billion in revenue from the sale of K-Cups.

Wall Street analysts predict Green Mountain's margins will shrink as Rogers and other brewers sell cartridges for as much as 60 percent less than brands packaged in K-Cups. Green Mountain's stock price has suffered.

Rogers' attorney, Dan Johnson of Morgan, Lewis & Bockius in San Francisco, said the lawsuit could take a couple of years to resolve.

"The question is whether or not they can prevent folks who want to manufacture unlicensed pods to have those pods used by consumers," Johnson said. "We think the consumer has the absolute right to use any pod they want in the brewer."

Local patent attorney Andrew Stroud of Mennemeier, Glassman & Stroud told me that such cases often end in settlements, but before they do, millions of dollars may be earned by attorneys.

"Patent litigation is called the litigation of kings because it's very expensive, as you can imagine, to go through and try to find all the patents on all the different coffee makers and have an expert witness come and look at them and determine whether this one was valid or overlapped," Stroud said.

Keurig doesn't comment on ongoing litigation. Its complaint stated: "Rogers had actual knowledge of the ... patent, which was marked on the brewers that Rogers has publicly identified as being compatible with its OneCup cartridges, or was willfully blind as to the existence of said patent."

Chew on that with your cup of San Francisco Bay French Roast.

Don't bury Shari yet

Shari Fitzpatrick will be dipping strawberries – and grapes – in chocolate at the State Fair until it closes this weekend.

As you may recall, Fitzpatrick shut down her Berry Factory business in August 2011 and filed for Chapter 7 bankruptcy liquidation. She said that Provide Berries, the company that acquired her Shari's Berries brand, refused to pay her licensing fees that totaled $400,000.

"Our agreement was very specific that I could move forward with a new brand, which came to be The Berry Factory, but once I started this new brand, they snuffed me out," she told me.

Fitzpatrick said the liquidation process concluded in March. The Chapter 7 trustee found no assets for creditors and discharged $793,729.50 in debt. Fitzpatrick held onto her Somerset home, retirement accounts and other exempt assets.

For those rooting for a comeback story, Fitzpatrick said she's in the process of creating one. Now on the speakers circuit, she's sharing the business lessons she documented in the book, "Berried in Chocolate." (Pelican Publishing, 224 pages, $19.99 at sharifitzpatrick.com)

She's also kicking the tires on offers that have come her way. As for the licensing fees she says she's owed, she told me: "When I closed my company … I had decided that life was too short to spend any more time, money or energy fighting to continue in any kind of relationship with Provide."

© Copyright The Sacramento Bee. All rights reserved.

Read more articles by Cathie Anderson





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