Whetstone Chocolate Factory plots Yowie egg launch in US amid patent dispute

22-Aug-2013 - Last updated on 23-Aug-2013 at 14:10 GMT

Whetstone Chocolate Factory to begin manufacturing Yowie suprise eggs for the US, Australia and NZ as its licensor, Yowie Group, accuses rival Candy Treasure of patent infringement

Whetstone Chocolate Factory is to begin manufacturing Yowie-branded toy-filled chocolate eggs in the US as its licensor initiates legal action against an alleged imitator.

The Whetstone Chocolate Factory will make chocolate eggs based on Yowie Monster characters under license from the Yowie Group this year.

Candy Treasure lawsuit

The Yowie Group last week issued a lawsuit against Candy Treasure – a New Jersey company that began producing toy-filled chocolate eggs called Choco Treasure after receiving Food and Drug Administration approval earlier this year.

The suit alleges that Candy Treasure owner Kevin Gass based his product on a patent published by Whetstone Chocolate Factory owner Hank Whetstone in 2000.

Whetstone emails

Hank Whetstone told ConfectioneryNews by email:“Candy Treasure is not the inventor of the ‘legal and safe’ method for the US. I am the inventor.

“Candy Treasure did not spend years developing this item on their own. They copied my product ‘Megga Surprise’ and attempted to license my patents before introducing their infringing product.”

Candy Treasure to defend allegations

A Candy Treasure spokesperson said: "We examined Mr. Whetstone's patent and deliberately chose not to license it, instead developing a different design that we believe makes a better product. In any case, Choco Treasure is clearly not in violation of this patent. We are proud of our product and its design and will defend our interests vigorously."

"Mr. Whetstone actually contacted us approximately two years ago on this same issue and we informed him of our non-infringement at the at time. It is surprising for us to learn of this lawsuit now on a closed matter."

Gass enquires to license patents

According to Whetstone’s version of events, Gass was a customer of confectionery manufacturer SweetWorks, Inc. between 2002-2004 when Whetstone was a shareholder of Sweetworks and COO of the company.

“He approached me (individually as owner of the patents) about obtaining a license to manufacture an egg product using my patents,” said Whetstone.

Whetstone showed us a 2009 email purportedly sent to him by Gass that asks about licencing Megga Surprize patents before Easter 2010.

Gass made the enquiry when working at GumRunners – another company that he owns.

candy treasure egg and capsule — New-Jersey based firm Candy Treasure only began selling its toy-filled chocolate egg Choco Treasure in the US earlier this year.

Whetstone alleges that Gass received physical samples of Megga Surprize during visits to SweetWorks' offices but Gass never licensed the production method or any rights to the Whetstone patent.

“He initially sought a patent license. Then he subsequently decided to proceed without a license, thus risking potential infringement action against him,” said Whetstone.

Candy Treasure filed its own patent application for a chocolate egg featuring a toy-enclosed capsule in 2010. But it was rejected by the US patent office in January 2013 on grounds that many features were similar to Whetstone’s patent.

Yowie to sell in US, Australia and NZ

Yowie and Whetstone Chocolate Factory will begin selling its toy-filled chocolate eggs in the US this fall.

Yowie has yet to announce which firm will sell and distribute the products, but documents from last year show that the Ferrara Candy has sent a non-binding Letter of Intent.

Sales are also set to begin in in New Zealand and Australia, where Yowie is based. The surprise eggs will be manufactured at Whetstone’s factory in Florida, US and imported.

Publicly available documents suggest that Whetstone is using equipment from German firm Rasch to wrap the products.