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A federal appeals court sent both parties packing in a battle over precooked bacon.
It was a big deal, too, as bacon prices have continued to climb. In HIP, Inc. v. Hormel Foods Corporation, the litigation was about who owned a process for superheating bacon.
Both parties appealed summary judgments dismissing their claims, and the Eighth Circuit Court of Appeals affirmed. That's right, nobody took home the bacon.
Hormel was working on a process to precook bacon by superheated steam. The company entered agreements with Unithrem (later known as HIP, Inc.), which had developed a process that could work, and JBT Corporation to pursue the project.
"The Project," as defined in the agreements, was to make a commercially viable oven for making bacon "using high steam levels which would be exclusive to Hormel." In the meantime, Hormel experimented with microwaving before superheating.
After the project ended, Hormel bought Unitherm's test oven and filed a patent for a hybrid process for microwaving and then steamheating bacon. With JBT, it reverse-engineered the Unitherm test oven.
When Hormel went to market with a new precooked bacon called "Bacon1," things heated up. Unitherm sued for breach of contract, misappropriation of trade secrets and declaratory relief that it owned the hybrid process.
Hormel cross-complained, alleging Unitherm breached its contract and seeking the same declaratory relief. After the trial judge dismissed both parties' claims, they appealed.
It boiled down to the non-disclosure and project agreements. The appeals court said the Unitherm process was already public knowledge, and so Hormel didn't breach any confidences. On the other side, the appeals panel said Hormel didn't prove it had a contractual right to Unitherm's process.
The Eighth Circuit noted the litigants had moved to dismiss their remaining claims about ownership of the hybrid process, so it might look like much ado about nothing.
But with prices hitting record highs last summer, there was probably more to do about bacon in this case.