WILMINGTON, Del. (CN) — Filing suit against the makers of Perky Jerky, a Californian with a passion for beef jerky says the company claims to own the rights to his original recipe and will drive him out of the jerky business.
"Ken Croucher's passion is beef jerky," the Oct. 11 federal lawsuit states. "Every week, Mr. Croucher leaves his California home and gets in the car or boards a plane to visit a different beef jerky plant."
He spends his work weeks on location supervising beef jerky makers for his company Country Butcher, which he and his wife have run for 15 years. He sells some jerky under his own label, but most of his business comes from supplying jerky to more than a dozen other companies that sell it under their own labels.
Croucher says he has been developing "the same proprietary recipe" since 1974, when at age 17 he went to work for a small grocery store that "provided him with a steady 'focus group' of customers on which to test his new jerky recipes."
"Unlike Country Butcher," he says, "Perky Jerky began by accident," when its founder, "a serial entrepreneur, purportedly stumbled on the idea of a caffeinated jerky ... after spilling Red Bull on jerky in his backpack."
The lengthy lawsuit does not identify the boss of Perky Jerky, a Delaware corporation based in Greenwood, Colo. The other defendant, Performance Enhancing Meat Snacks, does business out of the same Greenwood address.
Croucher says that the Perky Jerky man had no experience "in the health food or jerky arena," so he "flew to California to visit the jerky expert: Ken Croucher."
They signed contracts first for a royalty agreement, and then an independent contractor agreement under which Country Butcher would develop a high-energy jerky and make it for Perky Jerky, Croucher says.
Now Perky Jerky claims that it owns the recipe and trying to stop him from making it, according to the complaint. After carrying his secret recipe for years "entirely in his head," Croucher says, he wrote it down to help "realize Perky Jerky's vision," whereupon he became "nothing more than a potential obstacle to Perky Jerky's potential sale or IPO."
Perky Jerky's attorneys have sent him "threatening letters" to try to stop him "from carrying on their trade using the Country Butcher core recipe developed over decades."
Here it gets complicated. To make the juiced-up jerky, Croucher says, he "came up with the idea of adding guarana to a version of the existing core Country Butcher recipe."
Guarana is a Brazilian berry that, like coffee, contains caffeine.
Croucher says he tweaked his recipe to Perky Jerky's specifications, but fell back on his proprietary recipe when Perky Jerky customers preferred "the type of jerky Country Butcher had produced for its other customers for years[.] Country Butcher began providing Perky Jerky with a guarana-steeped version of the core recipe it developed prior to its relationship with Perky Jerky."
Because Perky Jerky wanted to control the manufacturing process, Croucher says, it asked him "to write down and provide to Perky Jerky the entire recipe and all manufacturing specifications, including cutting, marinating, and cooking specifications." And because Country Butcher "had no interest in making 'high energy' jerky," he did so.
Then in 2010, the USDA "informed Perky Jerky that guarana was not authorized for use at levels sufficient to provide a caffeinated buzz," so by 2015, Perky Jerky eliminated guarana from its jerky, Croucher says.
With the "perk" of guarana gone, Croucher says, Perky Jerky is made with "the core Country Butcher recipe - the same recipe Country Butcher uses for its other customers, which it developed prior to and independently of its relationship with Perky Jerky."
Now Perky Jerky has obtained at least $15 million in private equity funding, Croucher says, and "with added focus on its bottom line, and with little need for Country Butcher's services, Perky Jerky put in motion a plan to oust plaintiffs while obtaining their intellectual property."
It did this by withholding royalties and expenses and delivering him an "unfounded proposed agreement stating that plaintiffs' recipes now belonged to Perky Jerky, and threatened to withhold Plaintiffs' payments until plaintiffs capitulated and signed," Croucher says.
It's also trying to kill Country Butcher's relationships with its jerky customers, who are also competitors of Perky Jerky, "including but not limited to Pure Provisions, Nicks, Chops and OMG Jerky," Croucher says in the complaint.
He seeks declaratory judgment that his core proprietary recipe belongs to him and Country Butcher, an injunction and damages and exemplary damages for Lanham Act violations, false advertising, unjust enrichment, breach of contract, and misappropriation of trade secrets.
He is represented by John Reed with DLA Piper in Wilmington, and Evan Rothstein with Brownstein Hyatt Farber & Schreck, in Denver.
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