A federal judge has dismissed a lawsuit accusing Washington State University of violating a contract with an agricultural technology company to propagate Cosmic Crisp apples.
However, the court hasn’t yet resolved WSU’s counterclaim alleging the Phytelligence technology company infringed on its patent by selling 135,000 trees of the cultivar without permission.
Last year, Phytelligence — a WSU spin-off company founded by one of its horticulture professors — filed a complaint claiming the university breached an agreement allowing the company to commercially propagate the apple variety.
Phytelligence argued that it was effectively excluded from a commercialization deal with another company, Proprietary Variety Management, and an association of fruit tree nurseries, Northwest Nursery Improvement Institute.
Chief U.S. District Judge Ricardo Martinez has now sided with WSU, ruling that Phytelligence’s propagation agreement merely gave it the option to commercialize the variety subject to another, more specific contract that didn’t materialize.
The ruling said Phytelligence was given the option to participate in propagating Cosmic Crisp trees by becoming a member of the Northwest Nursery Improvement Institute, which the company did not accept.
The judge refused to consider “extrinsic evidence” of the context in which Phytelligence and WSU reached their disputed propagation agreement, finding that such information was not relevant under Washington contract law. The plain text of the agreement “unambiguously requires a future contract without detailing the terms of such a contract,” which is not enforceable as binding, Martinez said.
“Here, it is clear from the contract language at issue that the parties intended Phytelligence to have an option to participate, but the terms were insufficiently laid out in writing, and that the parties agreed at most that a future contract would lay them out,” he said.
In its counterclaim, WSU alleges that Phytelligence propagated and delivered 135,000 Cosmic Crisp trees to at least one farm, the Evans Fruit Co., without authorization to sell the cultivar.
The propagation agreement between WSU and Phytelligence allowed the company to create new trees that remained the university’s property and couldn’t be distributed without permission, according to the counter-complaint. The lawsuit claims Phytelligence breached its contract, committed patent infringement and violated consumer protection law by wrongly using the Cosmic Crisp trademark, among other allegations.
The complaint seeks unspecified damages as well as injunctions prohibiting the further sale of Cosmic Crisp trees and the destruction of plant material of the cultivar under Phytelligence’s control.