Cathie Anderson

Insights into the people who shape Sacramento’s business landscape

Cathie Anderson: Coffee roasters ready to rumble in appeals court

12/17/2013 12:00 AM

12/17/2013 7:30 AM

Buyers of Keurig’s one-cup brewing systems have wandering eyes, and the company is appealing to the U.S. Court of Appeals for the Federal Circuit to keep one Lincoln-based roaster’s coffee out of customers’ hands.

A mountain of documents are piling up in the circuit court as Keurig appeals a district court’s ruling that Rogers Family Coffee had not infringed on K-Cup patents. Rogers sells the San Francisco Bay brand in what it calls OneCup containers. Rogers’ product has a mesh pod, while Keurig uses a plastic cup. The Boston judge ruled that the two products were plainly dissimilar and concluded that, once customers buy the coffeemaker, they have the right to choose which product they use.

It’s an argument that San Francisco patent attorney Dan Johnson is making again on behalf of Rogers, and it’s one that he believes will hold weight with the Federal Circuit since judges in that court ruled in favor of a single-serving container made by another coffee roaster. Keurig does not comment on pending litigation.

After looking over the briefs filed so far in the case, Sacramento attorney Andrew Stroud of Hanson Bridgett told me that Rogers makes the more persuasive case.

“If I buy a copy of a book, if I pay the copyright owner for the book, and if I read it and then decide to give it away to my neighbor for Christmas, that’s my own business,” Stroud said. “The copyright owner has paid for it. And, that’s what they’re saying here. It’s essentially the same. The coffeemaker owner paid you for the patent, and if they decide to put somebody else’s coffee in it rather than yours because they like somebody else’s coffee better, then that’s their own business.”

Stroud said the Keurig v. Rogers battle really brings home the impact of patent law on the average person, and it shows how much weight these cases have on consumer choice and business’s market share. By late last summer, Rogers and other competitors had gained 11 percent of the market share for single-serve container sales, and analysts say that number is growing. A key reason may be that Rogers and Canada’s Canterbury Coffee are now marketing biodegradable containers. The OneCup BIO relieves consumers of that twinge of guilt at sending plastic to landfills.

Making his own path

Doug Stabler’s real estate sales were still going gangbusters in 2004 when he decided to wind down his practice and invest the money he had earned into a business selling scooters, motorcycles and all-terrain vehicles made in China.

Business associates asked him what he was doing. They advised him to stay focused because he was making tons of money. They told him the market would correct itself.

“I said, ‘Oh, no, the market is definitely going someplace it’s not supposed to be. In 2000, 30 percent of Sacramento’s working adults could afford a first-time home, and in 2004, only 14 percent could afford it. The amount of people who can afford a home is going down very rapidly. It’s out of reach.’”

Stabler kept folding his parachute, visiting China, finding manufacturers, visiting their factories, expanding his network. He opened ATV Wholesale Outlet in what he described as a dinky warehouse, then moved into a double-wide warehouse and then expanded into another double-wide. In spring 2012, he moved into 11,000 square feet at 4551 Auburn Blvd. Roughly half the space is a showroom for the vehicles, and a good portion of the remainder has glass display cases where customers can see parts under lighting.

Last year, Stabler grossed about $650,000, he said, and he’ll come close to doubling that revenue this year. Stabler said consumers still wanted to play during the economic downturn, but many no longer could afford the American, Japanese or European-made toys. His products range from $699 for kids to $2,500 for an adult’s bike. On a slow day, Stabler said, his business might sell five vehicles, and on a busy day, it’s 15. He thinks northern Florida and Denver might be ideal places for him to open his version of what a dealership should be.

“If you look at people who have been dealers of Chinese vehicles throughout the country,” Stabler said, “you’ll see that everybody else did it in a really small way. The Chinese manufacturers aren’t like the Japanese, Americans or Europeans where they say, ‘You have to have a building we approve, the architecture, the interior, you have to have X amount of sales or funds or service. You can sell it from a liquor store over in the corner,’ so because there are no restrictions, the representation of the Chinese vehicles is not really good. People are just opening up a little spot in a strip mall, and they don’t do well and they go out of business. When I did this, I said I’m going to run things the same way as Honda Motor Corp. would demand.”

‘Always in Season’?

The Sacramento Brand-a-Thon organizers asked Facebook users to vote on the slogans they would “like” to represent the region. On Monday, they announced that more than 30 ideas had been narrowed to three. Getting the most votes was “No Off Season,” followed by “Real Life Grows Here” and “Do It Here!” Many commenters suggested changing the top vote-getter to “Always in Season.”

Christi Black-Davis of Edelman, Christine Ault of Valley Vision and Gordon Fowler of 3fold Communications got the ball rolling for Brand-a-Thon, but they have allowed leaders nominated from the initial brainstorming session to carry the campaign forward. Each of the 30 or so people has adopted the title of Brandoula. That’s a noun, meaning a person who assists with the birth of a brand and provides it support after it is born.

What’s the next step? Ault said there will be a creative blitzkrieg on Feb. 3 at Sleep Train Arena, where teams will work against the clock to generate the best visual application for a slogan. New three-word slogans will be welcome. Black-Davis told me: “Everybody will be welcome at this second session, but it’s really going to be targeted at getting people with graphic design and other creative skills because this is the stage where we take it from the big idea or slogan to how you would graphically represent it.” If you want to stay abreast of the latest Brand-a-Thon news, like their Facebook page at www.facebook.com/sacbrandathon.

 

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