IGNE lawsuit details...
Igene Biotechnology Inc. has filed a $300 million federal lawsuit accusing ADM of stealing its secret formula for making a natural compound that turns pale-fleshed farm-raised salmon bright pink.
The Columbia, Maryland firm in an August suit contends that a former employee, who was arrested in July on theft charges, copied hundreds of pages of the company's trade secrets and gave the documents to ADM. Such secrets are worth millions, the lawsuit claims, because Igene has developed a new, cheaper method of producing a chemical needed to give the flesh of farm- raised salmon the same pink color as wild fish.
According to the lawsuit, Igene has been working since the early 1980s to develop a more efficient method of producing the chemical needed to make farm-raised salmon pink. Called "astraxanthin," the compound is extracted from a yeast.
Igene is a tiny company, with fewer than a dozen employees. It has lost so much money pursuing the elusive salmon-coloring chemical that its stock now sells for only 13 cents a share.
But, as the Washington Post's Jerry Knight reports, Igene not only discovered how to make a stronger form of the compound, it also found a way to make salmon absorb it more readily. In July, the company signed a contract with a Mexican chemical company, Fermic SA, to begin full-scale production of the product.
Previously, Igene negotiated for production of the chemical by ADM, but talks ran into a snag in July 1995 when the Justice Department disclosed that it was conducting its criminal antitrust investigation of ADM's bio-products division. The Igene lawsuit said the company was dealing with Mark E. Whitacre.
Igene now contends that ADM reneged on a contract to use the company's method for producing the salmon food supplement. Its current lawsuit seeks $450,000 in damages for breach of contract over that dispute. The big damages being sought in the case, however, are for the alleged theft of trade secrets. Igene contends that its process is worth as much as $100 million, and contends it is entitled to triple damages under federal law.
The lawsuit, Knight reports, said that Igene officials became suspicious that company records were being leaked when an ADM official came up with copies of documents the company had not given him. In July, the company said, Igene's president left several documents spread out on his desk before quitting for the day. When he returned the next morning, the papers were all neatly stacked. At that point, Igene officials called the police.
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