CJ CheilJedang sues Daesang over patents

Daesang CEO Lim Jung-bae, left, and CJ CheilJedang CEO Kang Sin-ho / Korea times file

By Kim Jae-heun

The country's top food company CJ CheilJedang has filed a 10 billion won lawsuit against consumer foods company Daesang Corporation to protect its property rights in the bio sector.

Daesang allegedly infringed CJ CheilJedang's patent for its lysine production process and the company took action against Daesang in September.

“It is true that we have filed the lawsuit against Daesang as they infringed our patent on an exclusive technology used to produce lysine for animal food additives. As having distinguished technology is important in this green bio business, we decided to take legal action to protect our intellectual property,” a CJ CheilJedang official said.

Daesang said it cannot comment as the lawsuit is currently underway.

Lysine is one of the essential amino acids that the human body cannot synthesize. Therefore people get it mainly through their diet. It's effective in strengthening muscles and cartilage so it is often used in animal feed and functional products.

The main issue of the lawsuit is whether or not Daesang used the same type of strain adopting a microbial fermentation technology that CJ CheilJedang has patented.

The case is being reviewed in the Seoul Central District Court and the preparation day for a public trial has not been fixed yet.

CJ CheilJedang currently holds the top position in the global market for producing lysine, tryptophan, nucleic acid, valine and soy protein concentrate. In 2016, the food company took over Chinese amino acid producer Haide to expand in the sector aggressively. Until the third quarter of this year, its accumulated sales in the green bio business excluding that of CJ Feed and Care have shown nearly 2.19 trillion won.

Green bio refers to industrial materials utilizing the functions or information of living organisms. Companies in the sector make new functional materials or additives based on microbes and plants in areas such as bio-food and bio-agriculture.

The global market for the green amino acid bio business is valued at an estimated 190 trillion won and it shows an average annual growth of 8 percent. Many multinational companies are eyeing green bio due to its high potential.

Daesang developed lysine as its main business until 1998 when the country was struck hard by the foreign-exchange crisis starting a year earlier. Daesang had to sell its bio business to German chemical corporation BASF, which again passed the lysine production unit to China's Paik Wang Industrial in 2007. However, Daesang reacquired Paik Wang Industrial to regain its green amino acid production business in 2015.