Judge Rules in Favour of The Better Meat Co in IP Dispute Against Meati

The IP case between mycelium meat makers Meati and The Better Meat Co has drawn to a close, after a judge ruled largely in favour of the latter, reports AgFunderNews.

California’s The Better Meat Co and Colorado-based Meati have ended their two-and-a-half-year-long intellectual property dispute over their mycelium protein products, paving the way for the former’s fundraising efforts.

As first reported by AgFunderNews, who broke the story, a judge in the Eastern District of California court ruled largely in favour of The Better Meat Co, accusing Meati of deploying “inexplicable” tactics and engaging in “sandbagging”. The court also rejected Meati’s claim over The Better Meat Co’s patent.

The legal battle began in December 2021 after The Better Meat Co sued Meati for undermining its IP and attempting to “bully” a less-funded rival. Meati, in response, accused the former of stealing its IP. Both companies produce meat analogues derived from the same fungi strain and using submerged fermentation.

The meat of the matter

Meati was founded in 2015 by Tyler Huggins and Justin Whiteley, and has raised $365M in venture capital to date, including a $100M Series C1 round just last month. The company’s chicken cutlets and steaks are now available in more than 6,000 retail locations, and it’s aiming to take the store count to 10,000 by the end of the year.

Meanwhile, The Better Meat Co, was founded by Paul Shapiro, Joanna Bromley and Adam Yee three years later. It has brought in only $27M in funding, thanks in part to the long-running court case. It began as a company producing plant-based meat enhancers, but later revealed it had been developing meat analogues using filamentous fungi, dubbed Rhiza mycoprotein. Its legacy plant protein is part of Perdue Farms’ Chicken Plus blended meat line.

In July 2021, The Better Meat Co was granted a US patent for this tech, listing Augustus H Pattillo as its inventor. According to CEO Paul Shapiro, Pattillo had previously spent a year working on a Department of Energy fellowship at Chicago’s Argonne National Laboratory, at the same time Meati (then called Emergy and working on renewable batteries) was also doing work at the federal agency.

In 2019, Pattillo joined The Better Meat Co (BMC), which was accused of IP theft by Meati after receiving the patent. “On information and belief, no one had ever discovered how to make textured mycelial masses resembling animal meat before Drs. Huggins and Whiteley,” Meati’s legal team had stated, as reported by AgFunderNews.

Judge sides with The Better Meat Co

The publication reported that Huggins and Whiteley “did not believe it was possible for BMC to have brought a product to market so quickly on its own unless Pattillo had taken something” from Meati, and argued that their names should have been on the patent.

The Better Meat Co argued that Meati had “provided no evidence that it had identified the novel claim terms of the BMC patent, had shared any of the concepts at issue with Mr Pattillo, or was even actively researching meat replacement uses of mycelium prior to 2019″.

In the court order in California, Judge Kimberly J Mueller sided with The Better Meat Co for the most part, admitting some trade secret claims made by Meati to proceed, but rejecting its core patent claims.

She also outlined how Meati served The Better Meat Co with nearly 3,0000 pages of documents the night before a hearing on May 17, which the Colorado-based company said supported its inventorship claims. But, the judge said, Meati’s counsel offered “no credible explanation” of why it didn’t provide such materials sooner, considering the case has been going on since December 2021.

Meati targets profitability, The Better Meat Co aims to scale up

The ruling is a positive one for The Better Meat Co, which can now hope to amp up its fundraising efforts without the IP albatross on its neck.

The judge did find that Meati had “identified genuine disputes of material fact within the record” related to trade secret claims, but both companies have now agreed to bring the dispute to an end, as reported by AgFunderNews.

The Better Meat Co CEO Shapiro, a long-standing animal rights advocate, was previously the subject of sexual harassment allegations during his time as VP at the Humane Society of the United States.

After leaving the charity for unrelated reasons in 2018, he told Politico: “I’ve taken responsibility for inappropriate behaviour years earlier in my career, and apologised to those who may have been offended. I cannot, however, respond to allegations that I’m unaware of, were never presented to my former employer or me during the inquiry 16 months ago, are alleged to have occurred many years ago and, frankly, just never happened.”

Both Meati and The Better Meat Co will hope to move forward with their business plans following the end of the case. Meati has enacted three rounds of layoffs in the last 12 months, the latest one cutting 13% of its workforce. It has also seen shifts in the C-suite, with Phil Graves taking over as CEO from Huggins, who has moved into an advisory role, just as COO and president Scott Tassani left the company.

The Colorado-based startup is now aiming for profitability, and has previously set out its plan to reach $1B in sales by 2025 (although the restructuring has likely pushed back this target).

The Better Meat Co just announced it had slashed the cost of its mycoprotein. When produced at scale, it will now cost the same as commodity beef, even if no further R&D advancements are made. It is now looking to scale up to supply major CPG brands in the US and Asia, who have signed letters of intent and offtake agreements for its mycoprotein.

This story was updated to better reflect AgFunderNews’s original reporting.