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A Tooth And Nail Fight Over Plastics


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A TOOTH-AND-NAIL FIGHT OVER PLASTICS

Biodegradable plastics haven't made much of a name for themselves. Since it takes decades for most things to degrade in a landfill, calling something "biodegradable" doesn't really mean much--particularly not when the products are petroleum-based plastics. Some plastic-product makers have tried adding starch to their wares, which causes them to disintegrate once they're exposed to the elements. But even those often leave a plastic dust when they break down. To the eco-aware, such problems have damned plastic for good. "My 5-year-old nephew says, 'There's no such thing as biodegradable plastics,' " says a researcher at one big company trying to commercialize such products.

His nephew may be politically correct, but he's not necessarily right. Indeed, researchers across the country are furiously racing to develop affordable biodegradable and compostable plastic. These days, the pace is so intense and the stakes are so high that one result of all that work is an acrimonious lawsuit.

Battelle Memorial Institute, the Columbus (Ohio) nonprofit research giant, claims in a recently filed suit that Du Pont Co. deliberately misappropriated Battelle's trade secrets during a joint-research project in biodegradable plastics. "What we did not expect was to have patents issued in their name which we believe to be our inventions," declares Richard Razgaitis, vice-president for commercial development of Battelle's Columbus operations.

HUGE MARKET. Battelle doesn't often sue its partners--its lifeblood is contract research for such companies as Du Pont. In the past five years, Razgaitis says, Battelle has been involved in just "three to five" intellectual-property disputes, and "nothing in that history as significant as this." The pending suit, filed Mar. 27 in U.S. District Court in Columbus, Ohio, highlights what's at stake.A low-cost version of biodegradable plastic would be worth "billions of dollars in the U.S. alone," Battelle's suit claims.

At the heart of the two companies' legal battle are polylactides, a class of materials both have researched for years. Du Pont says Wallace H. Carothers, the company scientist who invented nylon, discovered polylactide polymers back in the '30s. In 1988, Battelle says, it told Du Pont about its work in the area under a 20-year confidentiality agreement. Du Pont liked what it heard and took an option to acquire an exclusive license on the polylactide research.

Unlike petroleum-based plastics, polylactides actually degrade naturally. Du Pont, in fact, uses the material to make surgical sutures. But the material is expensive to produce. So Battelle's work had focused on reducing the costs of producing polylactides. In 1988, Battelle told Du Pont it had made advances toward manufacturing polylactides cost-effectively--which would make the material perfect for plastics buyers, such as food packagers, paper-plate makers, and fast-food restaurants.

The two set to work on further research. Du Pont says it paid $3.5 million to help fund the work. But by May, 1990, relations between Du Pont and Battelle became strained over negotiations for an exclusive license. The Battelle suit says Du Pont "ceased to negotiate in good faith." Charles E. Krukiel, senior counsel for Du Pont Chemicals, says "the figures that Battelle was trying to get us to agree to weren't equivalent to the proprietary contribution they made."

Before their relationship came to its end, Du Pont set up a venture with ConAgra Inc., the food giant, called Ecological Chemical Products Co. The deal was aimed at commercializing Du Pont's research in the field.

NO APOLOGIES. Battelle, meanwhile, hooked up with an Adolph Coors Co. unit called Golden Technologies Co., the brewer's in-house new-business incubator. The company hoped the partnership would allow it to sell its work to commercial buyers.

What finally sparked the suit, though, were decisions by the U.S. Patent Office. In May, 1990, as negotiations with Battelle were breaking down, Du Pont had applied for its own patents on the technology and ultimately won a number of them. Battelle now says Du Pont used Battelle technology to win the patents. Battelle's own patent applications are still pending.

But Du Pont denies the charges. "The interesting thing is, we've not seen any patents granted to Battelle in this area," says Krukiel. "Our conclusion is that they didn't have any inventions that were patentable," says Krukiel.

Battelle has taken a kitchen-sink approach with its suit, making 14 different claims. In the end, it wants Du Pont's four patents and ownership of all the technology developed under the option agreement assigned to Battelle. The research outfit also wants unspecified compensatory and punitive damages. Du Pont is to file its formal reply by June 1, and so far, no settlement discussions have been held.

While the two duke it out in the courts, research goes on. Soon, biodegradable plastics may be so common they become politically correct.Zachary Schiller in Cleveland and Janet Bamford in Philadelphia, with bureau reports


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