Walmart’s fresh food tech targeted in trade secrets suit
An agricultural technology (agtech) company has accused American retailer Walmart of stealing trade secrets relating to technology for reducing food waste.
Zest Labs filed its complaint at the US District Court for the Eastern District of Arkansas, Western Division on Wednesday, August 1.
The lawsuit noted that more than $85 billion of fresh food in the US is wasted each year and Walmart “likely loses more than $3 billion annually” to food waste.
The agtech company’s ‘Zest Fresh’ idea, released in 2010, was reportedly the first proactive solution for managing the delivered freshness of produce.
The ‘Zest Fresh’ solution allows growers, packers, shippers, distributors and retailers to monitor and manage food freshness in the supply chain.
Zest said that it had a “multi-year” relationship with Walmart that started in 2014 but ended “abruptly” in 2017.
During their relationship, Zest shared proprietary information regarding ‘Zest Fresh’ and a large number of Walmart employees had direct access to Zest’s trade secrets for years, the suit said.
However, four months after the relationship ended, Zest said it was “stunned” to learn that Walmart had developed a system called ‘Eden’ that “looks, sounds, and functions very similarly” to ‘Zest Fresh’.
The American retailer publicly claimed that its ‘Eden’ system had been developed in six months by engineers at a hackathon, according to Zest, and that it would save the company $2 billion over five years.
“In reality, Walmart used its years of unfettered access to plaintiffs’ trade secrets, proprietary information, and know-how to steal the ‘Zest Fresh’ technology and misappropriate it for Walmart’s own benefit,” Zest alleged.
The agtech company added that Walmart conceded that it will save $2 billion over five years as a result of deploying Eden. But Zest said that if the system reduces Walmart’s food waste by 50%, the company’s actual savings will exceed $15 billion over the next decade.
Zest alleged that Walmart has a “manifest need” for the technology, but rather than licensing it from Zest, the American retailer decided to misappropriate it.
The agtech company said it is seeking to recover the billions of dollars that Walmart will save as a result of its unlawful conduct, which Walmart embarked upon “wilfully and with malice”.
Speaking to WIPR, a spokesperson for Walmart said: "Walmart is an IP owner and respects the IP rights of others. We take this issue seriously and once we are served with the complaint, we will respond appropriately with the court.”
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