A federal appeals court has affirmed that the Phytelligence agricultural technology company cannot propagate and sell Cosmic Crisp apple trees developed at Washington State University.
Last year, Phytelligence — which was founded by WSU horticulture professor Amit Dhingra — lost a federal lawsuit accusing the university of breaching a contract regarding the WA 38 cultivar, now called Cosmic Crisp.
The U.S. Court of Appeals for the Federal Circuit has now upheld that ruling, finding that Phytelligence’s contract didn’t give it permission to propagate Cosmic Crisp trees for commercial sale.
Such commercialization would have required a separate agreement between WSU and Phytelligence that never occurred, and was not required to occur, according to the appellate court.
The ruling determined that under a contract allowing Phytelligence to propagate the trees , “WSU did not commit to any definite terms of a future license,” as confirmed by email communications and other “extrinsic evidence.”
In 2017, Phytelligence rejected several options for propagating and selling Cosmic Crisp apple trees that would have put the company on “equal footing” with similar propagators, the appellate court said.
“To conclude, we recognize Phytelligence’s desire to obtain a license to commercialize WA 38,” but it lacks an enforceable right to do so, the ruling said. “Courts are not in the business of making contracts.”
According to the court, Phytelligence relied on tissue culture technology to produce trees for nurseries and farmers but it has “since ceased operations and is in receivership,” a form of dissolution proceeding.
WSU had countersued Phytelligence for allegedly delivering 135,000 trees to a farm without permission but reached a deal under which the company stopped propagating or selling the cultivar, or using the Cosmic Crisp trademark.
A federal judge later rejected WSU’s request for $100,000 in attorney’s fees because the university didn’t win any new terms in the injunction agreement that weren’t in its original contract with Phytelligence.