WSU, biotech firm sue each other over new apple variety

By Chad Sokol / The Spokesman-Review

Washington State University and a Seattle-based biotech firm are suing each other over the right to grow and sell the highly anticipated Cosmic Crisp apple variety, which is expected to appear on store shelves early next year.

The legal dispute will determine whether Phytelligence — a company founded by a WSU professor that is partly owned by the university — can use its “cutting-edge science” to grow Cosmic Crisp buds and sell them to commercial apple producers.

But with millions of trees already planted across the state, the outcome of the dueling lawsuits seems unlikely to affect consumer availability of the Cosmic Crisp, a flavor-packed hybrid of the Honeycrisp and Enterprise varieties.

“I don’t think it will have any impact,” said Lynnell Brandt, a fourth-generation farmer and president of Proprietary Variety Management, which handles marketing and licensing of the Cosmic Crisp for WSU. “We are probably going to be placing between 6.5 and 7 million trees in the ground this year. I’m sensing that we’re meeting industry demand just fine.”

Brandt said the Cosmic Crisp has the potential to displace other popular varieties in Washington’s $2.4 billion apple industry, which accounts for roughly 70 percent of U.S. production. And he said no other variety has been introduced to the market so rapidly. Producers typically plant new apples a little at a time to test consumer demand, but the Cosmic Crisp, which is said to have excellent sweetness and a remarkable shelf life, promises to be a hit.

“This level of planting is unprecedented,” Brandt said. “Nothing like this, globally, has ever happened so fast.”

WSU researcher Bruce Barritt began developing the Cosmic Crisp about two decades ago. Until 2012, the year he filed for a patent, the tree was known only as WA 38.

WSU professor Amit Dhingra founded Phytelligence in 2011 to commercialize a method of growing trees from tissue cultures rather than soil, which enables them to reach maturity and bear fruit in less time. Dhingra remains a WSU professor and the company’s chief science officer.

In 2012, Phytelligence entered into a “propagation agreement” with the university that allowed the company to cultivate WA 38 plants for research purposes. The agreement did not grant Phytelligence rights to the trademarked name Cosmic Crisp, but it did include an “option to participate as a provider and/or seller” once the apple went to market.

In February, Phytelligence filed suit in King County Superior Court, claiming the university had violated the agreement by refusing to issue a commercial license.

WSU responded last month, claiming Phytelligence had not met clear requirements for obtaining a license and alleging the company had illegally sold 135,000 Cosmic Crisp trees to a grower near Yakima. The university also filed a patent-infringement claim in federal court.

Phil Weiler, WSU’s vice president for marketing and communications, said the university must protect the “significant financial investment” it has made to develop the Cosmic Crisp by ensuring that no one grows the apple without proper licensing and quality-control measures in place.

“The investments made by growers over the past two decades is at risk as well,” Weiler said.

WSU claims it terminated its agreement with Phytelligence after the company handed over sales orders and invoices showing it sold 135,000 Cosmic Crisp trees to Evans Fruit Co. in April 2016. The university also demanded that Phytelligence destroy any Cosmic Crisp plant materials in its possession.

Phytelligence has refused to do so.

“We are not going to destroy the material because we feel it’s within our rights to get the license,” said Ken Hunt, the company’s CEO.

Hunt, who joined the company in 2014, said the litigation stems from misunderstandings and misinformation, and he blamed “a small group of folks that are not about the entire university.”

Hunt said Phytelligence had indeed moved some Cosmic Crisp budwood — young branches that must be grafted onto rootstock from more mature trees — from its greenhouses to an Evans Fruit orchard “in anticipation of getting a license.”

“We don’t own land, so we used ground over at Evans, in large part because we thought we’d be using some of those buds to service their order,” he said.

But he insisted the move did not violate Phytelligence’s agreement with WSU or the university’s patent.

“If you don’t do the grafting, you don’t really have a tree,” Hunt said. “No grafting ever took place. No tree was ever generated.”

Hunt said Phytelligence has refunded payments to Evans Fruit, and the Cosmic Crisp budwood is back in Phytelligence’s possession.

As for the company’s efforts to obtain a license, Hunt said WSU required Phytelligence to become a member of the Northwest Nursery Improvement Institute, a nonprofit association of tree fruit nurseries, but the university would not provide clear requirements for doing so. NNII has the authority to license its members to grow the Cosmic Crisp.

Hunt suggested Phytelligence faced pushback because the company’s scientific approach can generate apples more quickly than the traditional nurseries, but Weiler, the WSU spokesman, said he was not aware of such competitive concerns. Weiler said several other companies managed to obtain commercial licenses without a problem.

“For whatever reason, (Phytelligence) chose not to follow the path that was laid out in the agreement,” he said.

This is not the first time a WSU-bred apple has been the subject of litigation. The university also went to court with a Yakima fruit company that had been selling the WA 2 variety under the brand name Crimson Delight. The apple was recently rebranded as Sunrise Magic.

In any case, Weiler said, apple lovers should brace themselves for the Cosmic Crisp. Not only is it sweet and tangy, it can retain its flavor and texture for up to a year in storage, and it’s slow to brown after being sliced, he said.

“The Cosmic Crisp will probably displace one or more apple varieties that currently have room on store shelves,” he said. “It’s going to be such a superior product that other apples that don’t meet the mark are going to fall by the wayside.”