Fighting for the integrity of his ‘tasteless smoke’ seafood patent, Bill Kowalski is spending a lot more time in the courtroom these days.

Kowalski, owner of Honolulu-based Hawaii International Seafood, Inc., patented the ‘tasteless smoke’ process for treating seafood, particularly tuna steaks, to preserve the color, texture, and shelf life after the product is frozen and thawed.

To read Kowalski’s patent (U.S. Patent No. 5,972,401 granted in October 1999), click here.

The process of using smoke on seafood is a centuries-old one. Many firms in the seafood industry have been selling product treated with carbon monoxide (the primary component of tasteless smoke) for years.

But, for many, that time is over.

Hawaiian firm Hilo Fish Company, Inc. settled a long-fought, expensive lawsuit in August 2002, paying Kowalski an undisclosed amount for infringing on his patent and ongoing royalties to continue selling seafood treated with tasteless smoke.

Through the settlement, both sides agreed that the Kowalski patent was valid, enforceable and had been infringed upon.

Now Kowalski wants everyone selling product treated with the ‘tasteless smoke’ process to pay up or wind up in court.

“We don’t want to disrupt the industry,” Kowalski said. “We want to see people make money and promote the category.”

The filtered, wood-smoked seafood category Arguably, there are three significant product developments in the seafood industry over the past 15 years: pin bone out salmon fillets, cooked shrimp and filtered, wood-smoked tuna and finfish.

The major players in this up-and-coming category include Hawaii International Seafood, Inc., Hilo Fish Company, Anova Foods’ Clearsmoke, and Seven Seas Seafoods, which sells carbon monoxide-treated seafood.

According to industry sources, close to four million pounds of seafood, mostly tuna, treated with the ‘tasteless smoke’ process, are shipped to the U.S. market each month.

Only two companies – Hawaii International and Hilo Fish – are legally able to sell seafood products produced using the patented ‘tasteless smoke’ process , Kowalski said. But he figures up to 100 firms are doing it illegally, some of which he is negotiating patent licenses and royalty fees.

The ‘tasteless smoke’ process is used primarily for tuna products such as yellowfin and bigeye tuna, which turn a chocolate brown unless frozen at very low temperatures.

Other species now being treated with the process and sold are swordfish, snapper, tilapia and mahi mahi.

The product forms for tasteless smoke tuna include steaks as well as naka ochi, small pieces of tuna used for tuna rolls in many U.S. sushi bars.

Growing popularity of ‘tasteless smoke’ One Midwestern retailer was cautious at first, holding back on large orders of the product and “waiting for the wheels to fall off.”

But it never happened. Retailers soon jumped on the ‘tasteless smoke’ bandwagon, enjoying the ability to stock frozen inventories of deep red tuna steaks year round without the worry of spoilage.

This helps keep costs down, as does the cheaper mode of shipping product over the ocean rather than by air.

“It’s so widespread and so popular,” the retailer said. “We can feature it at $6.99 a pound and still make a good profit on it.”

The ‘tasteless smoke’ offensive But that’s not stopping Kowalski from shooting some 80 warning letters to seafood companies selling product allegedly treated using the ‘tasteless smoke’ process, and, consequently, violating his patent. One of those companies is Los Angeles-based American Fish & Seafood.

The company does not produce ‘tasteless smoke’ seafood but instead purchases it from Hilo Fish. But although Hilo is now licensed to sell it, American Fish is not.

In a letter dated January 2003, and addressed to American Fish & Seafood President Ernie Doizaki, Kowalski urges negotiating a patent license agreement with a royalty rate per pound to cover future use of his patent and a cash settlement for past infringement.

No legal suits have yet been filed in the matter with American Fish, according to Blake Wheeler, who buys frozen seafood for the company. But, he also mentioned that Hilo Fish offered to indemnify American Fish & Seafood against any litigation over the matter.

Meanwhile, Fish is maintaining sales of the product but not actively promoting it.

“We’re waiting for the controversy to die down,” Wheeler said.

Is FDA part of the problem? The federal government only recognizes either ‘tasteless smoke’ or ‘treated with carbon monoxide’ as the official ingredients to be listed on an ingredient statement when using either process, according to FDA Consumer Safety Officer Dr. Tony Brunetti.

“We haven’t changed our position on that from the get go and, as far as I know, no one has contacted [FDA] about that,” he said.

For those in the industry that do need further clarification of the labeling rules for filtered wood smoke product, Brunetti suggests making contact with the FDA through a formal letter and pose a question for consideration, which no one has done yet, he said.

“I understand there’s this controversy out there,” Brunetti admitted, “but it’s sort of outside our purview. We’re just not in that loop.”

Truth in labeling? Steve Wilson, chief quality officer at the National Marine Fisheries Service Seafood Inspection Program, said he fired off an email to the FDA late last week over the issue seeking guidance on what is acceptable labeling.

Wilson said FDA’s guidance to industry covers only product either gassed directly with straight carbon monoxide or treated using the ‘tasteless smoke’ process.

Currently, the FDA requires the ingredient statement to include either "tasteless smoke (preservative to promote color retention)" or "treated with carbon monoxide (preservative to promote color retention)."

Over the past few years the filtered wood smoke category has gotten much bigger.

“The industry has grown and that’s why we’ve alerted [FDA],” Wilson said.

NMFS won’t inspect product unless the producer is listed on a roster of overseas plants that have been inspected by NMFS and meet HACCP requirements for producing ‘tasteless smoke’ seafood.

Wilson estimates between 20-25 firms are currently listed and they are basically free to put what they want on the ingredient label, as long as it does not stray too far from the truth.

“[Producers] can use the terminology that they feel is appropriate,” Wilson said. “We just require it to be truthfully labeled.”

Acceptable terms include processed smoke and filtered smoke, Wilson said, but can also be labeled Clearsmoke and tasteless smoke.

“If a filtered smoke process has any of those labels, we will consider it for lot inspection,” he said.

Wilson added that even if they use a filtered smoke process and use the term carbon monoxide-treated, that is acceptable because CO is the active ingredient.

“We don’t know if you are infringing on a patent or not,” he said. “We don’t want to get involved with that.”

Is Canada ready for ‘tasteless smoke’? In June 1999, the Canadian government notified importers that shipments of fish treated with carbon monoxide will not be allowed entry into the country.

The Canadian government does not distinguish between fish treated with the tasteless smoke process and straight carbon monoxide.

But the country’s tough stance on filtered, wood-smoked seafood may be softening.

“If [a company] wants tasteless smoke as an additive to fish it’s probably not difficult, but nobody’s finished that process,” Glenn McGregor, manager of products inspection for the Canadian Food Inspection Agency’s Fish, Seafood and Production Division, told The Wave.

In fact, a couple of years ago, Kowalski, as president of the newly formed (now defunct) Tasteless Smoked Seafood Association (TSSA), submitted basically the same paperwork it handed to FDA for process approval in the United States.

After two rounds of correspondence, submitting the necessary paperwork and answering follow-up questions posed by the government, Kowalski was optimistic of approval.

But the TSSA had already dissolved after a third round of correspondence with more questions from the Canadians and the application process ended.

Kowalski said completing the application process remains a goal but time and other resource constraints currently do not permit it. Controversy just heating up Chris Lin, president of Seven Seas Seafood, located in Alhambra, Calif., is arguably the largest carbon monoxide-treated seafood importer in the United States.

Kowalski sued Seven Seas in December 2002 for infringing on his patent and let most of Lin’s customers know that they will be liable for damages if they continue to sell the product.

“[Kowalski] sent letters to our customers saying that they can’t buy tuna steaks from anybody but Hawaii International because that would infringe their patent,” Lin said.

Lin maintains the product he imports has nothing to do with Kowalski’s process and counter sued Hawaii International the same month for disrupting his business.

Lin said a “substantial” amount of sales were lost following Kowalski’s letters to his customers, some of whom decided to no longer purchase the product, despite Lin’s reassurances that his seafood is not being illegally sold.

“All my products are treated with carbon monoxide and that’s signed out clearly on the carton,” Lin said. “It has nothing to do with the so-called ‘tasteless smoke’ products.”

A hearing between Hawaii International and Seven Seas is scheduled for June 16 in California but Lin wishes the matter would just simply go away.

“I want to settle but, so far, [Kowalski’s] been taking a tough stance,” he explained.

“I’d love to settle with them but it needs to be on reasonable terms,” Kowalski retorted. “So we get the legal entitlements we deserve.”

Competition? Or copycat? One competitor to Kowalski says his company is not using Hawaii International’s process and is even close to patenting his own.

“We basically developed our own machinery and our own process,” said Doug Brinsmade, president of Atlanta-based Anova Food Inc. USA, which markets its filtered, wood-smoked seafood products under the Clearsmoke™ label.

The Clearsmoke™ process is the only filtered wood smoked process allowed to be marketed in the European Union, Brinsmade said, the result of a costly legal battle.

Brinsmade is currently forging partnerships with smaller companies to process and market product under the Clearsmoke™ label.

“What I’m trying to accomplish is standardizing filtered wood smoke as a process,” he said. “Our process is different [than Kowalski’s] in that we impart smoke on our fish. [Kowalski] super-purifies his smoke.”

Brinsmade declined to provide detail regarding the Clearsmoke process only to say that it contains an additional process that removes the smoky flavor and odor.

The ingredient label for product marketed under the Clearsmoke name states, ‘filtered wood smoke (for color retention).’

“I’m not going to label it as ‘tasteless smoke’ because I don’t want to infringe on his patent,” he said. “The FDA needs to realize that by requiring the use of the word ‘tasteless smoke’, it allows Kowalski to sue people in the industry. So, they opened up a can of worms by doing that.”

But Kowalski said Brinsmade, and others in the industry, has it all wrong. The term ‘tasteless smoke’ is not trademarked, nor can it be, since the FDA recognizes it as the “common or usual” name of an ingredient.

“It doesn’t matter what [companies] call their product,” Kowalski said. “It matters if they use the process or not.”

In fact, Kowalski said patent law requires companies selling filtered wood smoke seafood to establish what process they are using clearly and make distinctions of their process versus the tasteless smoke process to prove it’s not infringing.

“My understanding is that the burden of proof is on the person who’s infringing to prove they are not infringing,” Kowalski said.

The claims of the patent – all 73 of them – are so broad that if infringe on one of them makes the patent enforceable, Kowalski said.

“Some of the broader claims don’t even mention tasteless smoke,” Kowalski said.

But some feel Kowalski is overreaching.

Prior Art?

“We believe Kowalski’s claims are unfounded,” Kevin McCarthy, president of Natick, Mass.-based Jana WorldWide (formerly Jana Brands), pointed out. “We believe there is prior art on his patent.”

Jana was sued by Kowalski for patent infringement this past January.

Prior art generally describes all information that can be used to show that an invention is not patentable, under Section 102 of title 35 of the United States Code.

Typically, once a patent is issued, the prior art of record will be closely scrutinized by competitors and potential licensees to determine the validity and scope of the patent.

McCarthy is referring to the well-documented history of filtered wood smoke technology and processes used for decades prior to Kowalski’s patented process.

While even Kowalski admits that the smoking process has been around for a long time his is unique since none of the 100 companies allegedly treating seafood with the tasteless smoke process, “prior to my patent, took all the taste out of the smoke and used the smoke without the taste,” he explained.

And as with American Fish & Seafood, some customers of Jana Brands that received letters from Kowalski have also chosen not to purchase the product for fear of further litigation.

“We’re doing a service to the industry in going to fight this and the whole industry will benefit from it,” McCarthy said.

Hawaii International Seafood is also suing Phillips Foods, Inc., based in Baltimore, Md. A Phillips spokesperson declined to comment on the case while it’s still being litigated.

The fraud factor Carbon monoxide-treated and "tasteless smoke"-treated tuna products typically appear highly desirable, usually a brighter watermelon-red in color rather than the usual burgundy color of fresh or fresh-frozen tuna. The appearance can hide decomposition including significant levels of histamine. And, because the process filters out odor the histamine is also odorless.

American Fish & Seafood’s Wheeler is fed up with suppliers using lesser quality fish and exposing it to the filtered wood smoke process to make it appear top quality.

“I don’t know if it’s happened a lot but it’s happened enough,” Wheeler said.

Since February 2001, the FDA has analyzed 106 treated tuna products imported through California ports and found 28 samples with histamine levels above the current guideline. Seven of these had histamine levels greater than FDA's poisonous action level for tuna of 500 ppm, ranging up to 2060 ppm.

A consumer complaint of histamine-related illness from the Las Vegas, Nev., Washoe County Health Department triggered FDA action in February 2001. An FDA-certified laboratory analyzed 18 ‘tasteless smoke’ treated yellowfin tuna steaks and found them all to be decomposed, with eight of them over FDA's Defect Action Level of 50 parts per million of histamine (levels ranged from 51-258 ppm.)

“If you want this product to do well in the market,” Brinsmade said. “You start with Grade A product and end up with Grade A product. And know your suppliers.”

Questions whether the process can mask decomposition? And what will decomposed tuna look like if subjected to this process have been at the top of the food safety agenda for regulators since the advent of the category.

University study focuses on tasteless smoke safety, quality

The safety of filtered wood smoke seafood is the subject of an ongoing study at the University of Rhode Island, where seafood/food safety specialist Dr. Laurie Pivarnik is studying the differences between fresh yellowfin tuna and its tasteless smoked counterpart.

The $100,000 study, paid for by a federal grant, began in August 2002 and is being conducted to determine if the tasteless smoke process is not harmful to humans.

“We’re looking at safety and quality considerations,” she explained.

Pivarnik recently completed the first round of testing and is now analyzing those results while a second round of testing gets underway.

Preliminary testing results – or lack thereof – is keeping Pivarnik cautious about revealing any information about the study, at this time.

“I’m going to keep my mouth shut [on test results] until we have thoroughly studied the statistics,” she told The Wave. “I think we have a bigger story here than I originally thought.”

Pivarnik said September would be the earliest results of the study would be available.

'Tasteless smoke' patent creates uproar throughout U.S. seafood industry