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Bonumose successfully concludes trade secret litigation

Wednesday, April 10, 2019  
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Bonumose is pleased to announce the very successful settlement of litigation Bonumose filed in May 2017 (the “Litigation”). In the Litigation, Bonumose sued for trade secret misappropriation, breach of contract, and other claims relating to its process for low-cost enzymatic production of tagatose from starch.

Bonumose initiated the Litigation in federal court in Virginia after a potential business partner told Bonumose in April 2017 about a copycat tagatose patent application located in China. Unbeknownst to Bonumose, the Chinese government-owned Tianjin Institute of Industrial Biotechnology (“TIIB”) filed the copycat tagatose patent application in November 2016 when Bonumose’s first tagatose provisional patent application still was unpublished. Bonumose had reason to believe the copycat tagatose patent application was prepared using Bonumose’s misappropriated trade secrets for an early iteration of Bonumose’s unique enzymatic process. Bonumose sued a U.S. company and an individual Bonumose believed to be responsible for trade secret misappropriation.

The defendants in the Litigation denied any wrongdoing. Yet the comprehensive Settlement Agreement and Mutual Release, effective March 27, 2019, granted Bonumose everything it was seeking in the Litigation and Bonumose received substantial compensation for settling.

The Litigation may have implications for U.S.-China relations. The alleged theft of Bonumose’s intellectual property ("IP") was mentioned in the Office of the U.S. Trade Representative’s March 22, 2018, report entitled “Findings of the Investigation Into China’s Acts, Policies, And Practices Related to Technology Transfer, Intellectual Property, And Innovation Under Section 301 of The Trade Act of 1974.”

Furthermore, during the course of the Litigation, Bonumose uncovered an unusual Chinese patent law. A 1990 Chinese law allows an inventor – or an inventor wannabe – to file a Chinese patent application without his or her name being publicly disclosed. That was done in the case of TIIB’s copycat tagatose patent application. Bonumose learned the Chinese State Intellectual Property Office ("SIPO") will not officially disclose identities of anonymous inventors except in rare circumstances after a long, drawn-out process. As such, the Chinese anonymous inventor law potentially facilitates IP abuse. For example, U.S. companies could face extreme difficulty in proving or even discovering the connection between Chinese patent applications and individuals who have misappropriated trade secrets.

To the credit of the SIPO, it recognized Bonumose’s tagatose patent application was filed prior to the copycat tagatose patent application and told TIIB the copycat tagatose patent application described the same invention as in Bonumose’s patent application. In December 2018, Bonumose and the true inventor – Bonumose’s co-founder and Chief Scientific Officer, Dr. Daniel Wichelecki – were recognized with a broad Chinese tagatose patent.

TIIB is an arm of the government-owned Chinese Academy of Sciences. TIIB was not a defendant in the Litigation. However, it appears TIIB recognized a valuable technology it wanted to replicate in China and would not relent even after the provenance of the copycat patent application was proven. Publicly-available information (here, here, here and here) indicates TIIB paid well over One Million Dollars in legal fees for representation of TIIB’s “interests” even though TIIB was not a party to the Litigation. TIIB even briefed the Secretary-General of the Tianjin Communist Party of China Municipal Committee about the tagatose IP. Yet Bonumose prevailed despite the burden of being opposed by a well-funded agency of the government of the world’s most populous country.

In the Litigation, the following issue was not resolved: whether defendants’ lawyers were required to be registered under the Foreign Agents Registration Act as representing the interests of a foreign government agency. That is for another forum.

Bonumose was superbly represented in the Litigation by a team of Holland & Hart LLP lawyers and support staff led by Erik F. Stidham, as well as John S. Martin and his colleagues at Hunton Andrews & Kurth LLP. Also contributing to the victorious trade secret prosecution was Bonumose’s patent counsel, J.A. Lindeman & Co.

Bonumose is scaling-up to commercial-scale its unique, patented enzymatic process for low-cost tagatose production, as well as similar enzymatic processes for other good-for-you sugars. Bonumose has established and is continuing to establish strong relationships with supply chain and distribution partners. Bonumose looks forward to working with honest and honorable companies in multiple countries – including China – to make cost-advantaged tagatose available as an ingredient in good food people can afford. In pursuing global distribution, Bonumose has demonstrated its resolve to devote the resources necessary to zealously defend and protect its valuable, global IP rights.
Bonumose is pleased to announce the very successful settlement of litigation Bonumose filed in May 2017 (the “Litigation”). In the Litigation, Bonumose sued for trade secret misappropriation, breach of contract, and other claims relating to its process for low-cost enzymatic production of tagatose from starch.

Bonumose initiated the Litigation in federal court in Virginia after a potential business partner told Bonumose in April 2017 about a copycat tagatose patent application located in China. Unbeknownst to Bonumose, the Chinese government-owned Tianjin Institute of Industrial Biotechnology (“TIIB”) filed the copycat tagatose patent application in November 2016 when Bonumose’s first tagatose provisional patent application still was unpublished. Bonumose had reason to believe the copycat tagatose patent application was prepared using Bonumose’s misappropriated trade secrets for an early iteration of Bonumose’s unique enzymatic process. Bonumose sued a U.S. company and an individual Bonumose believed to be responsible for trade secret misappropriation.

The defendants in the Litigation denied any wrongdoing. Yet the comprehensive Settlement Agreement and Mutual Release, effective March 27, 2019, granted Bonumose everything it was seeking in the Litigation and Bonumose received substantial compensation for settling.

The Litigation may have implications for U.S.-China relations. The alleged theft of Bonumose’s intellectual property ("IP") was mentioned in the Office of the U.S. Trade Representative’s March 22, 2018, report entitled “Findings of the Investigation Into China’s Acts, Policies, And Practices Related to Technology Transfer, Intellectual Property, And Innovation Under Section 301 of The Trade Act of 1974.”

Furthermore, during the course of the Litigation, Bonumose uncovered an unusual Chinese patent law. A 1990 Chinese law allows an inventor – or an inventor wannabe – to file a Chinese patent application without his or her name being publicly disclosed. That was done in the case of TIIB’s copycat tagatose patent application. Bonumose learned the Chinese State Intellectual Property Office ("SIPO") will not officially disclose identities of anonymous inventors except in rare circumstances after a long, drawn-out process. As such, the Chinese anonymous inventor law potentially facilitates IP abuse. For example, U.S. companies could face extreme difficulty in proving or even discovering the connection between Chinese patent applications and individuals who have misappropriated trade secrets.

To the credit of the SIPO, it recognized Bonumose’s tagatose patent application was filed prior to the copycat tagatose patent application and told TIIB the copycat tagatose patent application described the same invention as in Bonumose’s patent application. In December 2018, Bonumose and the true inventor – Bonumose’s co-founder and Chief Scientific Officer, Dr. Daniel Wichelecki – were recognized with a broad Chinese tagatose patent.

TIIB is an arm of the government-owned Chinese Academy of Sciences. TIIB was not a defendant in the Litigation. However, it appears TIIB recognized a valuable technology it wanted to replicate in China and would not relent even after the provenance of the copycat patent application was proven. Publicly-available information (here, here, here and here) indicates TIIB paid well over One Million Dollars in legal fees for representation of TIIB’s “interests” even though TIIB was not a party to the Litigation. TIIB even briefed the Secretary-General of the Tianjin Communist Party of China Municipal Committee about the tagatose IP. Yet Bonumose prevailed despite the burden of being opposed by a well-funded agency of the government of the world’s most populous country.

In the Litigation, the following issue was not resolved: whether defendants’ lawyers were required to be registered under the Foreign Agents Registration Act as representing the interests of a foreign government agency. That is for another forum.

Bonumose was superbly represented in the Litigation by a team of Holland & Hart LLP lawyers and support staff led by Erik F. Stidham, as well as John S. Martin and his colleagues at Hunton Andrews & Kurth LLP. Also contributing to the victorious trade secret prosecution was Bonumose’s patent counsel, J.A. Lindeman & Co.

Bonumose is scaling-up to commercial-scale its unique, patented enzymatic process for low-cost tagatose production, as well as similar enzymatic processes for other good-for-you sugars. Bonumose has established and is continuing to establish strong relationships with supply chain and distribution partners. Bonumose looks forward to working with honest and honorable companies in multiple countries – including China – to make cost-advantaged tagatose available as an ingredient in good food people can afford. In pursuing global distribution, Bonumose has demonstrated its resolve to devote the resources necessary to zealously defend and protect its valuable, global IP rights.

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