About Club Coffee's Lawsuit Against Keurig & Keurig Canada
Club Coffee has learned the value of delivering innovation for customers and consumers over our more than 100 years in business. We thrive in an open competitive marketplace – and we have learned there are times when you have to take a stand for your customers.
This is one of those times. Club Coffee is suing Keurig Green Mountain, the single-serve industry giant, to defend consumer choice and the kind of innovation, lower prices and legitimate competition that an open market delivers.
The story is simple. Keurig patented and then popularized a single serve brewer that has become the most popular one in North America. It built a successful business with an innovation that is now found in millions of homes and workplaces.
Club Coffee recognized the changing coffee market and looked for ways to meet consumer needs. In 2012, we launched the soft pod. This innovation provided filter brewed coffee and tea – without the plastic cup.
Innovation was only the start for Club. We were able to deliver the product for a very competitive price, so we earned the business of many well-known retailers and coffee brands across North America. They turned to us to produce their single serve coffees, teas and other hot beverages.
In 2012, Keurig’s monopoly on certain K-Cup features covered by a key US patent expired. Since Keurig gets the vast majority of its revenue from its K-Cup business, this was a big threat to their profits. Our lawsuit describes the two ways Keurig responded – both designed to fight legitimate competition.
First, they conducted an ongoing campaign of falsehoods and misrepresentations. They claimed our products were defective, liable to damage Keurig brewers and even that using our soft pods would void warranties on their brewers.
Second, they announced that they would launch a new brewer in 2014 with what they claimed would be “proprietary technology.” They said the new brewer would only work with Keurig-licensed K-Cup packs. In other words, this brewer would only work with the packs that Keurig profits from and lock out all others.
Club responded. Our technical experts quickly determined this was nothing more than just special inks. We could change our own pods to work with the new brewers – and we did.
In addition to value, consumer access to our products is important for another reason. We have been working hard to meet consumer demand for an even more environmentally-friendly single serve cup of coffee or tea with a compostable soft pod. We are on track to offer the world’s first fully compostable pod designed to meet municipal government “green bin” organic waste standards in 2015.
While we were innovating, Keurig was working to “lock up” the market and move back to its old monopoly. Keurig used the threat of its new brewer to go aggressively after the customers it did not have, including ours. Keurig told customers that that unless they signed with them, their products would not work in the new brewers. Keurig used its dominance to coerce companies to sign exclusivity agreements with them. Our legal action is meant to end this campaign of coercion based on false claims.
Prices for single serve products will remain artificially high if competition for coffee and tea pods is not opened up. Consumers will pay that price.
Consumers can also expect much less innovation. There will be virtually no incentive to accelerate consumer-friendly innovations such as Club’s fully-compostable soft pod. In the meantime, Keurig’s reusable “My K-Cup” inserts won’t work in the new brewers.
We believe consumers deserve the benefits of an open market and real competition - not false claims. We are taking action to ensure those benefits for consumers.
We believe consumers deserve the benefits of an open market and real competition based on facts, not false claims. We are taking action to ensure those benefits for consumers.
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