Walmart hit with $2 billion complaint from Zest Labs

Agricultural tech company Zest Labs and its parent company Ecoark Holdings Inc. have filed a $2 billion complaint against Walmart, claiming that the retail giant unfairly and illegally used its Zest Fresh intellectual property in the development of Walmart’s Eden food freshness technology.

Eden was launched by Walmart in March as a high-tech “Intelligent Food” initiative designed to improve the quality of its perishable foods business and eliminate waste from its perishable food supply chain. At the time of the rollout, Parvez Musani, VP of engineering-supply chain technology at Walmart Labs, said, “Eden is now the cornerstone of Walmart’s move to improve the quality of fresh produce for sale to our customers.”

The complaint from Zest Labs, filed in the United States District Court for the Eastern District of Arkansas, Western Division, claims that, beginning in 2015, “Zest Labs engaged with Walmart to demonstrate the value of Zest Fresh to reduce waste and improve delivered shelf life consistency. During this time, Zest Labs’ proprietary information and trade secrets were shared with Walmart, including members of Walmart’s executive leadership team.”

Zest Labs developed Zest Fresh, which was created to significantly reduce field-to-shelf food waste while improving delivered freshness to consumers. The data and insights provided by Zest Fresh also help growers, food distributors and retailers reduce the $85 billion problem of fresh food waste, according to the company.

Related:Walmart introduces Eden, its high-tech fresh-food initiative

After Walmart introduced Eden, according to Zest Labs CEO Peter Mehring, “We were surprised and concerned by how similar Walmart’s Eden description was to Zest Fresh. Like most innovative companies, we believe strongly in the need to protect our intellectual property, recognizing the importance of preserving the value for our shareholders and customers. Zest Labs challenged long-held beliefs at most retailers by properly identifying the primary contributing factor to pre-consumer waste. We then defined and implemented a breakthrough, proactive approach to managing fresh food from the farm to the shelf, significantly reducing that waste.”

The case, filed today, is Zest Labs, Inc. et. al. v Walmart, Inc. case number 4:18-cv-500-JM, in the United States District Court for the Eastern District of Arkansas, Western Division.