Aker ends ITC case against Olympic, but district court patent infringement suit to continue

Aker Biomarine photo.

Aker BioMarine has pulled the plug on its patent infringement suit that was being pursued before the International Trade Commission.  But the company is still suing a Norwegian competitor and an American distribution partner in district court.

In January 2016, Aker BioMarine filed a U.S. lawsuit against fellow Norwegian companies Olympic Holding, Rimfrost, Emerald Fisheries and their U.S. distribution partners Avoca and Bioriginal. In the suit, filed in the District Court of Delaware, Aker BioMarine claimed that the parties used Aker BioMarine’s patented processes and offered its patented krill oil products for sale. Aker BioMarine also filed a complaint with the International Trade Commission (ITC) to stop these alleged infringing activities. 

ITC case over, but district court case still on

Aker said it has come to a confidential settlement with Avoca.  The Delaware patent infringement will continue against Olympic, Emerald and Bioriginal, said Aker CEO Matts Johansen. In that suit Aker claims that the parties used Aker’s patented processes and offered its patented krill oil products for sale.

Johansen said ending the ITC case made sense because now with the financial difficulties of Olympic Holding and Emerald Fisheries, both of which are in bankruptcy negotiations in Norwegian court, the alleged infringing material is not being shipped in sufficient volumes for an ITC ruling to have much impact.  A successful ITC case shuts down importation immediately and is the fastest way to address an alleged patent infringement, Johansen said, but does nothing in the way of awarding damages.  For that, the Delaware case is ongoing, he said.

Rimfrost: Fight will go on

For its part, the head of Rimfrost, the krill oil processing and marketing arm of the Olympic Holdings triad, said the fight will continue. Stig Remøy, owner of Rimfrost, has said the company is solvent and stands apart from the bankruptcy proceedings of its sister companies, negotiations that have also ensnared the Juvel, the consortium’s harvesting vessel. The cessation of the ITC case means the fight over Aker’s patents now moves to the U.S. Patent Trials and Appeal Board, where Rimfrost is challenging four of Aker’s patents, he said.

“Aker Biomarine has no case, because you cannot patent nature itself, declared Remøy.  He accused Aker of trying to engineer a Norwegian monopoly on the harvesting of krill. Aker operates two modern harvesting vessels in the far South Atlantic Ocean and brings in more than half of the world harvest of krill.

“When krill licenses were allocated in 2007, Norwegian authorities made it clear that it is in the nation's interest that licenses are distributed to multiple players, Remøy said.

Weakly recovering market

The suit comes at a time of slowly recovering omega-3s sales. On a webinar on omega-3s hosted by NutraIngredients-USA on Tuesday, Adam Ismail, executive director of the Global Organization of EPA and DHA Omega-3s, said that overall omega-3 sales were recovering slightly from the flat growth or even outright declines that began several years ago.  Ismail sized up the market this way:  1% to 2% growth in North America, a stagnant market in Europe, and stronger growth in Asia for an combined global annual growth rate of 2% to 3%. Johansen said he concurred with that outlook.

What we have seen is very similar.  If you look at the last six to nine months, we have a seen a stabilization in the market.  We think it has returned to growth. The krill market tends to follow the overall omega-3s market,” he said.

New forms to drive sales

Among the things helping to drive new sales of krill are the new forms of the ingredient have have come to market in the past year or so.  Aker’s new processing facility in Houston, TX has technology installed that allows higher concentrates of krill oil. (Neptune Technologies and Bioressources has also debuted higher concentrations.)

We have seen a lot of enthusiasm for the product. There hasnt been a lot of innovation in the krill space over the past years,” Johansen said.

In addition to the ability to go to higher EPA and DHA concentrations, the Houston plant also has new technology installed that allows most of the bad smelling fractions of the base oil to be removed.  Krill oil in its base form has always had a whiff of rotten bait bucket odor, which made itself known even through the soft gel barrier.  Starting with a better smelling raw material means krill oil for functional foods now becomes a real possibility, Johansen said. The technology to offer krill oil in a powdered form has been around for a number of years, but the offensive odor of the base material had always been a holdback, he said.

We have been able to address the smell issue. Yes, we dont have the fishy burps, but if the product doesnt smell good it is a challenge with consumers, he said. Overall for omega-3s the functional foods market has been a difficult one to address. We have an excellent technical solution for that market, but its hard to say what the volumes will be.

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