Can Keurig Copycats Compete for Christmas Cash?

While waiting my turn in line at a Starbucks in Southern California recently, I was eyeing the holiday-oriented merchandise that the coffee shop had on display.  Although snowflake-adorned coffee mugs for sale in semi-tropical locations are always diverting, I was actually more interested in a piece of equipment that Starbucks was selling:  a single-cup coffee machine.  Was it a Keurig?  No.  Did it use Keurig pods?  No (it used pods that were smaller, but otherwise virtually identical to Keurig pods).  At first glance, did it appear to improve upon or "design around" the now famous Keurig coffee machine?  Not really.

I was intrigued by Starbucks' machine because I had assumed that the owners of Keurig-technology were still enjoying the "right to exclude" that comes with patent ownership for the finite life of a patent.  Phillips v. AWH Corp., 415 F.3d 1303, 1312 (2005) (en banc) ("It is a 'bedrock principle' of patent law that the claims of a patent define the invention to which the patentee is entitled the right to exclude.").  I had never seen a non-Keurig single-cup coffee machine for sale.  I left the shop wondering what Starbucks was up to.  Was Starbucks in infringement territory?  "Certainly not," I thought.  "Starbucks is a sophisticated corporation that must have done its homework and decided to:  (a) carefully design around patented Keurig-technology; (b) enter into a licensing agreement with the owner of the patents that cover Keurig-technology; or (c) take advantage of a lapsed patent or two."  I knew that, from a legal standpoint, merely being able to say "we did it first" does not itself protect Keurig from imitators.  Taking a break from (oddly) posing multiple choice questions to myself, I set off for the Orange County Government Center, which was full of activity that caused me to forget about my enthrallment with the Starbucks technology I had just viewed.

Fast forward three weeks.  I was buying a nutcracker at one of the grocery stores in Southern Ohio that now feature fairly comprehensive "kitchen and small appliance" departments.  I spotted a "Mr. Coffee" single-cup coffee machine.  It touted being powered by "Keurig brewing technology" and being compatible with "Keurig K-cups."  My interest in Keurig's competition was reignited, and my research taught me that all of my multiple choice answers were correct when it comes to the emergence of single-cup coffee technology by Starbucks.

While Green Mountain Coffee Roasters, the owner of Keurig-technology, has patents covering Keurig machines, Starbucks' new machine (the "Verismo") is a high-pressure system that apparently does not fall within the scope of Keurig's coverage for low-pressure systems.  More importantly, though, the patents for the Keurig "K-cup," or the Keurig pod, lapsed in September of 2012.  Suddenly, the holiday-debut of a Starbucks machine requiring Starbucks pods virtually identical to Keurig pods, but that (conveniently) cannot brew coffee from Keurig K-cup pods, made sense.  I was wrong about one thing, though:  Starbucks and Mr. Coffee had licensed Keurig-technology in the past.  I just had never noticed.

Ultimately, whether you are in Southern Ohio or Southern California, your single-cup coffee options (including gift options) are in the process of changing.  Holiday shopping is of course affected by trends and marketing and the economy; however, it is easy to forget that is also affected by something as simple as patent expiration dates.

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Jade Smarda |