DCT

1:18-cv-00802

HIP Inc v. Hormel Foods Corp

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:18-cv-00802, D. Del., 08/06/2018
  • Venue Allegations: Venue is alleged to be proper in the District of Delaware because all Defendants are Delaware corporations or LLCs and therefore reside in the district.
  • Core Dispute: Plaintiff alleges that its president is the true inventor of a patented hybrid bacon-cooking process, seeks correction of inventorship and ownership of the patent from Defendant Hormel, and makes contingent claims that Defendants' "BACON 1" product infringes that patent.
  • Technical Context: The technology concerns industrial-scale methods for producing precooked bacon, a significant product category in the retail and foodservice markets.
  • Key Procedural History: The complaint details extensive prior litigation between the parties. A 2014 suit in the District of Minnesota involved breach of contract claims related to a Joint Development Agreement (JDA). The court in that case dismissed claims regarding ownership of the then-pending application for the patent-in-suit without prejudice. The current complaint is presented as a continuation of that dispute, now that the patent has issued.

Case Timeline

Date Event
2004 Alleged conception of the hybrid bacon cooking process by D. Howard
2007-07-20 Alleged disclosure of the hybrid process by D. Howard to Hormel
2010-08-11 Provisional Application for '498 Patent filed (Priority Date)
2011-08-10 '498 Patent non-provisional application filed
2012-02 Alleged start of infringing commercial production at Osceola facility
2014 Alleged launch of "BACON 1" product using the infringing process
2014-09-29 Prior litigation filed by Plaintiff against Hormel in D. Minn.
2016-09-14 Final judgment entered in D. Minn. litigation
2016-12-06 Related "Howard Patent" (No. 9,510,610) issued
2017-03-06 Alleged start of infringing production at Rochelle Foods facility
2018-04-18 8th Circuit affirms D. Minn. judgment
2018-04-24 Prior suit filed in D. Del. on the related Howard Patent
2018-05-29 U.S. Patent No. 9,980,498 issues
2018-08-06 Complaint filed
2018-12 Expected completion of expanded production lines at Dold Foods facility

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 9,980,498 - “Hybrid Bacon Cooking System,” issued May 29, 2018

The Invention Explained

  • Problem Addressed: The patent describes shortcomings in prior art methods for making precooked bacon. Microwave-only systems can result in a product that is tough with undesirable char marks, while cooking in spiral ovens with internal heating elements can create an "off flavor" when rendered fat contacts the very hot surfaces. (U.S. Patent No. 9980498, col. 1:21-48).
  • The Patented Solution: The invention is a two-stage "hybrid" process. First, bacon pieces are preheated in a microwave oven. This initial heating melts some fat, which is described as forming a "barrier" that reduces condensation on the bacon and prevents flavor dilution. Second, the preheated pieces are transferred to a separate oven and cooked with superheated steam supplied from an external generator, which keeps the oven's internal surfaces below the smoke point of bacon fat, thereby avoiding the creation of off-flavors. (’498 Patent, col. 3:51-62, col. 4:20-40). The complaint includes a sketch allegedly drawn by the inventor in 2004, which depicts a process line with a microwave preheater followed by a spiral oven. (Compl. ¶51).
  • Technical Importance: This hybrid approach purports to combine the benefits of microwave and steam cooking while mitigating their individual drawbacks, aiming to produce a precooked bacon product with improved texture and flavor intensity compared to prior industrial methods. (’498 Patent, col. 9:6-10).

Key Claims at a Glance

  • The complaint asserts infringement of all 16 claims and focuses its allegations on independent claim 1. (Compl. ¶¶14, 111).
  • Independent Claim 1 recites a method with three main steps:
    • Preheating bacon pieces with a microwave oven to a temperature of 140°F to 210°F, which forms a "barrier with melted fat" that reduces condensation and prevents flavor dilution.
    • Transferring the preheated pieces to a cooking compartment heated with steam from an "external steam generator," where the steam keeps internal oven surfaces below 375°F to reduce off-flavors.
    • Cooking the pieces in the compartment to a water activity level of 0.92 or less.
  • The complaint notes that dependent claims 2-16 add further limitations. (Compl. ¶15).

III. The Accused Instrumentality

  • Product Identification: The accused instrumentality is the process used by Defendants to manufacture a precooked sliced bacon product sold under the name "BACON 1". (Compl. ¶110).
  • Functionality and Market Context: The complaint alleges that Hormel and its subsidiaries (Osceola Food, Rochelle Foods, and Dold Foods) use a "hybrid process" at their facilities to produce BACON 1. (Compl. ¶¶98, 116). This process is alleged to involve preheating bacon in a microwave oven and then cooking it in a JBT spiral oven using superheated steam from an external generator. (Compl. ¶108). The complaint further alleges that the final BACON 1 product is rendered to less than 40% of its original weight and has a water activity level of less than 0.92. (Compl. ¶110). Hormel has allegedly described BACON 1 as a key innovative item and has invested over $130 million to expand production capacity. (Compl. ¶¶122, 123).

IV. Analysis of Infringement Allegations

’498 Patent Infringement Allegations

Claim Element (from Independent Claim 1) - Alleged Infringing Functionality - Complaint Citation Patent Citation
preheating bacon pieces with a microwave oven to a temperature of 140°F to 210°F to create preheated bacon pieces, the preheating forming a barrier with melted fat around the preheated bacon pieces and reducing an amount of condensation that forms on the preheated bacon pieces when transferred to a cooking compartment of an oven, the barrier preventing any condensation that forms from contacting the preheated bacon pieces under the melted fat and diluting flavor in the preheated bacon pieces; Defendants' process allegedly involves "preheating the bacon in a microwave oven to a temperature above 140° F to begin the rendering process so that the surfaces of the product are covered with liquefied fat." - ¶108 col. 3:51-62
transferring the preheated bacon pieces to the cooking compartment of the oven, the cooking compartment heated with steam from an external steam generator, the external steam generator being external to the cooking compartment, the steam being injected into the cooking compartment...the steam assisting in keeping the internal surfaces at a temperature below 375°F [i.e., the smoke point of bacon fat] thereby reducing off flavors during cooking in the cooking compartment; and The bacon slices are allegedly "cooked and browned in a JBT spiral oven having a cooking chamber to which superheated steam, which is produced by an external generator at a temperature above 400° F, is injected to heat the oven" and the oven is operated below 375°F. ¶¶108, 109 col. 3:42-51
cooking the preheated bacon pieces in the cooking compartment to a water activity level of 0.92 or less to create precooked bacon pieces. - The resulting "BACON 1 product...is rendered to less than 40% of its original raw weight and has a water activity level of less than 0.92." - ¶110 col. 5:4-7
  • Identified Points of Contention:
    • Scope Questions: The complaint’s primary focus is on inventorship and ownership, which is a threshold issue for the infringement claims. A central question for the court will be whether David Howard, Plaintiff's president, was the sole inventor of the claimed process, as alleged. (Compl. ¶¶13, 139).
    • Technical Questions: Assuming Plaintiff establishes ownership, a key infringement question may be whether the preheating step in Defendants' process creates a "barrier" that performs the specific functions recited in claim 1—namely, "reducing an amount of condensation" and "preventing any condensation... from... diluting flavor." The complaint alleges the preheating covers the surfaces with "liquefied fat," but does not explicitly state that this barrier prevents flavor dilution from condensation in the accused process. (Compl. ¶108).

V. Key Claim Terms for Construction

  • The Term: "barrier with melted fat... preventing any condensation... from... diluting flavor"

  • Context and Importance: This term is central because it defines the specific functional result required of the preheating step. Infringement will depend on whether the accused process not only preheats with a microwave to melt fat, but also whether that melted fat functions as a "barrier" that achieves the claimed anti-condensation and flavor-protection results. Practitioners may focus on whether this limitation requires a specific, measurable outcome or is met simply by the inherent properties of preheating bacon.

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: A party could argue that any layer of melted fat inherently forms a "barrier" and that some reduction in condensation is an inevitable consequence of preheating, thus meeting the claim language.
    • Evidence for a Narrower Interpretation: The specification explicitly links the barrier to solving the problem of flavor being "diluted and washed off." (’498 Patent, col. 3:59-62). A party could argue this requires proof that the barrier in the accused process actually performs this specific, stated purpose, rather than just being a layer of rendered fat.

  • The Term: "external steam generator being external to the cooking compartment"

  • Context and Importance: This limitation distinguishes the invention from prior art ovens that used internal heating elements, which allegedly caused off-flavors. The infringement analysis will require determining if the JBT spiral ovens used by Defendants (Compl. ¶108) meet the "external" requirement as it is understood in the patent.

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The term could be interpreted to mean any system where the primary steam generation unit is a physically separate piece of equipment from the oven housing itself.
    • Evidence for a Narrower Interpretation: The patent’s background and detailed description emphasize that the purpose of the external source is to keep the oven's internal surfaces below the fat's smoke point. (’498 Patent, col. 3:45-51). An argument could be made that "external" implies a configuration that functionally achieves this outcome, potentially excluding systems where some part of the heating mechanism is still integrated with the oven in a way that could create hot spots.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges that Defendant Hormel Foods Corporation and its corporate services entity actively induce infringement by their wholly-owned subsidiaries (Osceola, Rochelle, and Dold Foods). The alleged inducement consists of instructing, aiding, abetting, and directing the subsidiaries to use the infringing process to produce the BACON 1 product. (Compl. ¶¶181, 183).
  • Willful Infringement: The complaint alleges both pre- and post-suit willfulness. The basis for pre-suit knowledge is the central allegation of the case: that Hormel learned the complete details of the invention directly from Plaintiff's president, David Howard, during a confidential presentation in July 2007, before Hormel filed its own patent application naming its own employees as inventors. (Compl. ¶¶66, 68, 106). Post-suit knowledge is based on the continuation of the accused activity after the '498 patent issued. (Compl. ¶154).

VII. Analyst’s Conclusion: Key Questions for the Case

  • A core issue will be one of ownership and inventorship: The entire case is predicated on Plaintiff’s ability to prove, contrary to the face of the patent, that its president was the sole inventor and that ownership should be transferred from Hormel to HIP. The infringement claims are contingent upon the resolution of this foundational dispute.
  • A key evidentiary question will be one of functional performance: Assuming Plaintiff prevails on ownership, the infringement analysis will likely focus on whether Defendants' process meets the functional requirements of the claims. Specifically, does the preheating step in the accused "BACON 1" process create a "barrier" that demonstrably "prevent[s]... diluting flavor," as required by claim 1, or is this a feature of the patent not practiced by the accused process?
  • Finally, a central question for damages will be one of willful misconduct: Given the detailed allegations that Hormel misappropriated the invention after it was disclosed in confidence, the court will have to determine if Defendants' alleged infringement was willful and if the case is "exceptional," which would expose Defendants to potential enhanced damages and attorney's fees.