Apple growers who sued the University of Minnesota and Lake City's Pepin Heights Orchard have agreed to settle a lawsuit over an exclusive licensing arrangement.
More than a dozen apple growers sued last year over the licensing agreement to sell the popular SweeTango apple.
The agreement was the first of its kind. It made the Pepin Heights Orchard in Lake City the primary grower of the SweeTango.
Previously, all other apples released by the university were available for anyone who wanted to grow them. All growers could plant and market the apples after paying a one-time fee.
But as part of Sweetango's launch, the University of Minnesota gave Pepin Heights the exclusive right to sell to the wholesalers that put the apple in grocery stores. While other orchards can also grow and sell the SweeTango, they can only sell the apples at farmers markets, roadside stands or through direct store delivery.
University officials have said the exclusive agreement was made to protect the quality of SweeTango apples and maximize the amount of money the university makes on them.
Dennis Courtier, owner of Pepin Heights, says the settlement was a victory for his company.
"The lawsuit was nothing more than vandalism by litigation in the first place. In many countries, this sort of litigation just wouldn't be tolerated," Courtier said.
Pepin Heights also agreed to increase the number of SweeTango trees individual Minnesota growers can license. Currently, a Minnesota grower can license up 1,000 SweeTango trees. By 2017, the settlement will allow individual growers to license up to 3,000 trees each.
Lisa Lamm Bachman, the attorney who represented the growers, says even though they made a business decision to settle, her clients are concerned the judge's ruling could set a precedent.
"When varieties are developed at the University of Minnesota for this climate and this region, and then to have them exclusively licensed to one grower at the exclusion of all others -- it just raises a lot of concerns for those other growers in the state," Lamm Bachman said.
As part of the settlement, the growers who filed the lawsuit agree to pay $25,000 in legal fees to Pepin Heights Orchard. The settlement still needs to be approved by a judge before the lawsuit is dismissed.