A federal judge has ruled in Washington State University’s favor in a breach of contract lawsuit with a spinoff company over the WA 38, the university’s new apple to be sold under the brand name Cosmic Crisp. Here, WA 38 hangs on a tree during a 2014 preview tour in Prosser. (TJ Mullinax/Good Fruit Grower)

A federal judge ruled in Washington State University’s favor in a breach of contract lawsuit over one of the university’s patented apples, while a local judge decided to reconsider an earlier ruling in the university’s favor on another lawsuit.

Judge Ricardo Martinez of the Western Washington U.S. District Court in Seattle determined in July that WSU did not violate a contract when it terminated a WA 38 apple cultivar propagation agreement with the Seattle tissue culture company Phytelligence and ordered Phytelligence to not try to sell or propagate any of the relevant plant material.

The WA 38 is the university’s newest apple and will be sold under the brand name Cosmic Crisp. Growers will harvest the first commercial crop this year. Phytelligence is a spinoff of WSU, founded by one of its professors.

Phytelligence first sued in February 2018 for breach of contract when WSU did not grant it a license to sell WA 38 trees, terminated the company’s propagation agreement and instructed it to destroy all the trees it has grown so far.

Martinez ruled that Phytelligence had ample opportunity to apply for a license but didn’t exercise it by joining the Northwest Nursery Improvement Institute, which is a requirement for the license. Just because the two parties talked about a contract does not mean they had one, he reasoned.

“An agreement to negotiate a contract in the future is nothing more than negotiations,” he wrote in a summary judgment, quoting a precedent case.

Phytelligence has told WSU it plans to appeal, said Albert Tsui, a patent attorney and business development specialist at WSU. Glen Donald, Phytelligence president, declined to discuss the case at all because it is still in litigation.

Martinez’s injunction stipulates that if the summary judgment still stands once Phytelligence finishes its appeals, the company must destroy all its WA 38 plant material.

Meanwhile, a dispute over the WA 2, another WSU apple, is back in Yakima County Superior Court, after Judge Blaine Gibson opted in May to reconsider an earlier ruling that partially dismissed a lawsuit from several companies who want to be able to recruit new growers to produce the WA 2.

In that case, producer Ray Keller and several others accused WSU of violating state public process requirements by awarding a commercialization contract to Proprietary Variety Management, a Yakima company that also has the contract to manage WA 38, without taking bids. Keller’s company, Apple King, had already spent money and effort building their own market for the WA 2.

Apple King has trademarked the WA 2 as Crimson Delight. WSU named the apple Sunrise Magic. •

—by Ross Courtney