Former CEO sued over use of 'BeefChain' trademark
September 19, 2019
CASPER — A company co-owned by two Wyoming legislators is suing its former CEO over the use of a trademark attributed to the blockchain-based agricultural company they founded together.
In a complaint filed Aug. 30 in federal court, well-known GOP financier and Wyoming Blockchain Coalition founding member Robert Jennings is accused by his former partners in the company, American Certified Brands LLC, of posing as the owner of a brand owned by the company, BeefChain, in an attempt to damage the company’s reputation after being dismissed from its leadership.
Additionally, the company — which counts Crook County politicians Sen. Ogden Driskill and Rep. Tyler Lindholm as membership shareholders — accused Jennings of fraudulently interfering with the company’s accounting and record-keeping relationships while also leading customers and clients to believe he — not American Certified Brands — is the owner of the company’s BeefChain trademark.
They say the violation constitutes damages of no less than $75,000.
“The main purpose of the lawsuit is just to get him to stop using a trademark he doesn’t own,” said the company’s attorney, Jared Olsen, a fellow state legislator and member of the Blockchain Task Force, which both Driskill and Lindholm serve on. “The damages would be from contact with the clients and business relations specifically.”
Jennings, however, claims that he is the rightful owner of the trademark, and in the days after the lawsuit was filed has been preparing a response of his own. At the same time, he has been trying to recover costs he incurred while serving as CEO of the company.
“This is a business partnership that has run aground, and this lawsuit is nothing more than an attempt to intimidate and harass me and get out of paying the bills that they owe,” Jennings said.
He said Monday he was unconcerned with allegations he had actually committed copyright infringement — saying he expects the charges to not stand up to scrutiny should the case go to trial.
Olsen said the company will file an amended complaint in federal court with additional claims containing more information it has uncovered in its own investigation. Jennings has until Sept. 23 to file a response, after which a judge can determine whether the case can go to trial.
In the meantime, Jennings has filed a complaint with the Wyoming State Bar accusing Olsen of a conflict of interest in the case. Olsen, who has no monetary stake in the company, said he believes it will be “fully dismissed.”
BeefChain the company is one of the state’s most visible — and little-understood — brands.
Founded in 2018 during Wyoming’s efforts to be on the cutting edge of blockchain regulation, BeefChain was intended to be a brand that was purely emblematic of the Cowboy State, bringing together the old economy — ranchers — and the state’s burgeoning tech sector to create a product that could allow purchasers of Wyoming beef to verify the product they were receiving was grass-fed.
Earlier this summer, the company received U.S. Department of Agriculture certification, and the company has tagged roughly 10,000 head of cattle to date with their technology, Lindholm said.
“Our producers enrolled in the program have performed at a minimum of 10 cents above average per pound — a considerable amount of money when you’re talking about 250 animals each weighing 500 pounds a piece,” Lindholm said. “It’s been working really well for our ranchers.”
It’s also the reason the company is deciding to sue. Though Jennings filed to certify Wyoming Certified Beef — a separate company that acted as a precursor to American Certified Brands — with the secretary of state’s office months ago, the other stakeholders in the company argue their 80 percent ownership stakes in American Certified Brands gives them authority over the company’s operations.
“What me and the other shareholders noticed over time is that things started to be shuffled off into side companies, and things were being done that shareholders and the other co-founders did not agree to,” Lindholm said. “So it became a pretty big horse wreck. At that point, that’s when the majority of shareholders decided to terminate Rob as the CEO of BeefChain.”
Jennings, however, says he’s just trying to earn his money back. He disputed the company’s success, saying it has earned far less than claimed and, as of this month, has failed to make good on his initial investment.
According to a timeline of events he compiled, Jennings emailed two fellow board members his interest in dissolving the company in mid-August due to “breach of contract and fiduciary duties on behalf of ACB members.”
For that, he was ousted as CEO by an 80-20 vote.
The lawsuit’s intention is simple, Olsen said; it’s a standard trademark lawsuit over Jennings’ use of the BeefChain trademark “that also involves court claims for interference with business relationships with prospective clients.”
But that standard trademark lawsuit is a bit more complicated.
Throughout the lawsuit, American Certified Brands — which Jennings does not own — is referred to as “doing business as” Wyoming Certified Beef. But while American Certified Brands claims it owns Wyoming Certified Beef and is essentially the same company, Jennings is the sole owner of the latter company, having set it up through a registered agent in May 2018, according to secretary of state’s office filings and documents provided to the Star-Tribune.
And while BeefChain’s website claims that American Certified Brands is the owner of the BeefChain trademark, a search with the United States Patent and Trademark Office shows that Wyoming Certified Beef owns the trademark.
Therefore, Jennings is arguing, while he is no longer the CEO of American Certified Brands, he remains the sole owner of the company that owns the BeefChain trademark — a company the lawsuit claims is actually owned by American Certified Brands.
The lawsuit alleges that Jennings has engaged in an “illegal and fraudulent scheme” to expropriate the company’s BeefChain trademark. Olsen wrote in an email that Jennings essentially attempted to take control of ownership of the company’s USDA certification and its BeefChain trademark, which was consistently listed under American Certified Brands promotional materials when Jennings was CEO.
Since Jennings’ termination — for which no cause was listed — the lawsuit says he has sent a number of emails to company shareholders threatening litigation, as well as a number of “false and misleading” statements to the company’s clients and customers about his ownership of BeefChain-related subsidiaries, which the company says has damaged its reputation.
“We were hoping there wouldn’t be a suit, and there would be no issues once Rob was terminated,” Lindholm said. “But he continued to use company property at that point, and it became clear to us things would not be handled in a businesslike manner. Hence the suit.”
“Nobody thinks this is a good time,” he added. “But our company has to protect its assets. All of us probably wish this wasn’t happening, but it is what it is.”
Jennings, however, argues it’s still his company — and his right to do what he wants.
“It’s my right to communicate with whoever I want, frankly,” said Jennings.