Cosmic Crisp

Washington’s Cosmic Crisp apple.

COLFAX, Wash. — Proprietary Variety Management, a Yakima company helping Washington State University with commercialization of the Cosmic Crisp apple, has been granted a temporary restraining order blocking release of documents related to its work.

M. Sharon Baker, an Ephrata, Wash., freelance journalist, requested documents regarding marketing plans and finances about the new apple, which is scheduled to reach grocery stores in the fall of 2019.

PVM filed for an injunction in Whitman County Superior Court, in Colfax, to prevent WSU from releasing the documents the company says contains proprietary information that would harm it and WSU if made public.

PVM is seeking an injunction to prevent release of the information under Public Record Act exemptions and the Trade Secrets Act.

Judge Gary Libey granted a temporary restraining order Nov. 9 blocking release until an 11 a.m. Dec. 10 court hearing at which WSU and Baker are asked to show why a preliminary injunction should not be issued. Libey ordered PVM to provide the materials in question to the court by Nov. 16 for his private review.

The WSU Board of Regents is considering whether to fund Cosmic Crisp promotions for four years not to exceed $10.1 million, including a 3.3 percent PVM administrative fee. The board approved an initial $614,635 contract with PVM on Oct. 11 to get promotions started, also with a 3.3 percent PVM administrative fee.

The regents won’t be able to hear or discuss information in public that is subject to the restraining order, said Lynnell Brandt, PVM president.

That information includes the framework of a marketing plan that PVM has shared with an industry advisory committee. It includes projections of price-per-box value added by promotions, Brandt said.

Brandt’s declaration to the court states the information includes projected sales and pricing strategies, royalty projections, proposed budgets and marketing methods, techniques and processes known only to PVM. Release “would permanently and significantly damage the competitive interest of PVM, as well as WSU,” the declaration states.

Release would “compromise our ability to follow through with those plans,” Brandt told Capital Press.

“The problem we have is universities are looking to commercial entities to assist them in commercializing new products. The liberal Freedom of Information Act in this state makes it extremely difficult to do that because competitors are then cognizant of plans and timing,” Brandt said. “It takes away the commercial edge to bring a return to the university, the state and to growers. That’s got to change.”

Other states have similar laws that are limited, and commercialization of a product has to be one of those limitations, he said.

WSU said, in a court brief, that it was prepared to release the documents to Baker on Nov. 14 and that it “lacks sufficient knowledge of PVM’s business plans and operations to adequately evaluate whether the marketing plans at issue are proprietary documents or trade secrets.”

Baker declined comment to Capital Press but provided her court response to PVM’s motion for an injunction.

“The information is not proprietary, unique or a trade secret and is not specifically exempted from public discourse under the Public Record Act,” she wrote.

“PVM competitors have access to all the same data and will not gain any unnecessary advantage by seeing PVM’s projections,” she wrote.

“The public has a right to know how PVM is going to spend $10 million to market the Cosmic Crisp apple and it needs to have the confidence that PVM has the sophisticated marketing expertise to make the Cosmic Crisp a success,” she wrote.

PVM and WSU have never disclosed their contract or how much WSU is paying PVM in fees from royalties. Baker believes those items are not proprietary.

WSU gets a royalty of 4.75 percent of every box of Cosmic Crisp sold at over $20 per box and a $1 royalty on every tree sold for planting. Costs of commercialization, including patenting and PVM’s management fee is around 20 percent, James Moyer said in 2017, when he was associate dean of research at WSU’s College of Agricultural, Human and Natural Resource Sciences. He is now retired.

For PVM’s fee to be more precisely made public could “cause people to focus on that rather than the project as a whole and could impede our ability to negotiate contracts and make progress,” Brandt said.

Cosmic Crisp is scheduled for an unprecedented fast ramp up. Industry marketers have called it their $500 million gamble. Retail volume will quickly accelerate from just under 200,000, 40-pound boxes of apples in 2019 to 2.2 million in 2020, 6.2 million in 2021 and to 22 million by 2026, PVM has said.

Apples are Washington’s top agricultural commodity, grossing $2.4 billion annually, and making up 65 percent of the national crop.

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