- Stevia pioneer PureCircle and smaller player Almendra settled a federal lawsuit about whether Almendra's Steviarome ingredient infringed on patents PureCircle had previously received for a particular steviol glycoside.
- Under the settlement, which is largely confidential, Almendra signed a licensing agreement with PureCircle to continue selling its Steviarome ingredients worldwide, a statement from the companies said.
- PureCircle, which owns or co-owns more than 75 U.S. patents for stevia, was founded in 2001. While it developed a large collection of industry-leading stevia ingredients, deep-seated problems on the business side came to light last year. An investigation into financial inconsistencies led to the resignation of the company's CEO, CFO and several members of the company's board, and ultimately showed a $79.7 million annual loss. After these issues were revealed, Ingredion bought a 75% stake in the company.
Quite a lot happened for PureCircle last year: lawsuits, mass resignations, dire financial trouble, acquisition and a settlement paid to U.S. Customs and Border Protection, which said the company used prison labor for imported stevia.
Aside from its business issues last year, PureCircle is known both for its deep experience with stevia and large portfolio of ingredients, as well as its drive to protect them. Since 2017, PureCircle has filed three patent lawsuits against competitors.
The earliest dispute, filed in 2017 against stevia producer Sweet Green Fields, was resolved in a fashion similar to the lawsuit with Almendra. PureCircle's complaint with the U.S. International Trade Commission claimed Sweet Green Fields' Natrose product, which it was importing, violated a PureCircle patent in the United States. The dispute was resolved less than six months later, with Sweet Green Fields signing a licensing agreement with PureCircle.
A 2018 lawsuit against stevia producer SweeGen, in which PureCircle claims the smaller producer infringed on its patented way of using an enzyme to transform glycoside Rebaudioside D into Reb M, is still pending. SweeGen filed for a review with the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office, which issued a final denial this week.
This settlement shows that things are calming down on the legal front for PureCircle, which could be a sign of more peaceful waters ahead for the business. And given the new ownership, a return to calm makes sense. In a call with investors in August, soon after the acquisition was finalized, Ingredion CEO Jim Zallie said that the company would be "laser-focused on its turnaround" in the next year, according to a transcript.
"The business had been hampered for about 12 months with a lot of uncertainty and that uncertainty spilled over to its customers," Zallie said of PureCircle, according to the transcript. "And with us coming in, given our reputation and equally some of the ingredients that complement its portfolio for sugar reduction, has already helped immensely from a standpoint of the customer connectivity and the opportunities that that presents."
While Ingredion has been involved in litigation over patents, it's not something for which the company is known. Ingredion purchased PureCircle based on the opportunities it presented, and the chance to complement its sweetener portfolio with a wide range of stevia products. Settling its disputes and calming a tumultuous business climate are important to help integrate PureCircle into Ingredion.
A desire for calm may also be why the company settled the charges of using prison labor last summer. The $575,000 fine from Customs and Border Protection stemmed from a 2016 investigation into information from a nongovernmental organization that found at least 20 shipments of stevia imported from the company's Inner Mongolia Hengzheng Group Baoanzhao Agricultural and Trade LLC had been processed in a Chinese prison. Last year, PureCircle denied all wrongdoing — it had done so since 2017, when it posted a statement about the issue on its website — but opted to pay the fine rather than challenge the charge in court.
As 2021 continues and the integration into Ingredion becomes complete, PureCircle's story may shift and change again. Instead of business disputes in the headlines, PureCircle can settle back into making news for what it's best known for: breakthroughs in natural sweeteners.