Editor's note: This article has been updated with a statement from Spirit Hound Distillers.
Food and beverage businesses take intellectual property seriously, especially when it comes to the security of their secret recipes they say give them a competitive advantage.
So when a Colorado coffee liqueur producer by the name of Richardo’s Liqueur suspected Spirit Hound Distillers breached an agreement and stole its proprietary formula, they filed a lawsuit.
The Denver Post reported that according to the lawsuit filed in the Boulder County District Court, Spirit Hound proposed to make Richardo’s coffee liqueur and suggested that Richardo’s change distributors to one that Spirit Hound does business with.
Richardo’s also claimed Spirit Hound signed a nondisclosure and confidentiality agreement to preserve the business’ formula.
However, Spirit Hound allegedly breached the contract by “stealing and using Richardo’s work product” to make its own coffee liqueur.
The lawsuit goes on to say that Spirit Hound informed retailers and a distributor that Richardo’s had gone out of business and that Spirit Hound would produce its own coffee liqueur to serve as a Richardo’s replacement.
Richardo’s is reportedly seeking a temporary restraining order and permanent injunction against Spirit Hound. Richardo’s also wants damages for actions that it said caused “irreparable” harm to its business.
Spirit Hound, established in 2011 and based in Colorado, is a craft distiller of premium spirits, including 14 varieties of gin, whisky, vodka, and rum. The distiller has not commented on the lawsuit.
“Richardo’s has taken an unfortunate step and has made baseless allegations against us, both in a lawsuit and now publicly in the press for producing our own Café Colorado Coffee Liqueur,” Spirit Hound Distillers said in a statement. “These allegations are not true, and we intend to defend ourselves as we have done nothing wrong. We cannot comment further at this time as this is now pending litigation, but we want our beloved customers to know why we are silent.”