Irish financier Paul Coulson's Ardagh Group faces the prospect of a legal battle to recover $64.5 million (€58.7 million) it has been forced to pay out to settle a patent dispute involving a business the glass and metal containers group bought from French industrial giant Saint-Gobain five years ago.
A Delaware jury ordered in April 2017 that Ardagh pay $50.3 million to a company, Green Mountain, which claimed the group's US glass unit infringed a patent over technology to turn mixed-colour glass into recycled glass of a single colour.
The affected Ardagh business had been acquired in 2014 as part of the group's $1.5 billion purchase of Verallia North America (VNA) from Saint-Gobain.
The US court of appeals of the federal circuit affirmed Green Mountain's case in July. Ardagh transferred the amount due – which had risen to $64.5 million when interest costs were included – last week, according to US law firm Susman Godfrey, which represents Green Mountain.
While a spokesman for New York-listed Ardagh reiterated the company’s position, which goes back to 2017, that it is covered by indemnities from Saint Gobain, the French company continues to dismiss this claim.
“Given the agreements between Ardagh and Saint-Gobain on the sale of Verallia North America, Saint-Gobain is not liable and the group is not involved in this litigation,” a spokeswoman for one of France’s oldest industrial groups said.
A previously-unreported note in Ardagh’s second-quarter report, published at the end of July, said the company had filed a request for arbitration against the seller of VNA to enforce the indemnity it claims to have. It said at the time that arbitration proceedings are ongoing.
If Saint-Gobain continues to stick to its position that it is not obliged to cover the Green Mountain patent-infringement bill, it is likely that the dispute will ultimately end up in court, according to observers.
Sources said that the patent involved in the case expired during the legal proceedings. That had no bearing on the case but means Ardagh will not be infringing Green Mountains’s rights by its continued use of the process going forward.
Ardagh completed the purchase of Verallia North America less than two weeks after Green Mountain lodged its legal complaint in the US in March 2014, according to court documents relating to the original 2017 case.
Mr Coulson made an attempt to buy the remaining Verallia operation from Saint-Gobain the following year. However, Ardagh’s bid was rejected as being too low. US private equity group Apollo subsequently acquired the business in a €2.95 billion deal.
Apollo floated Verallia almost two weeks ago in a transaction that put an initial market capitalisation on the business, which makes Dom Perignon bottles and Nutella jars, of €3.2 billion and an enterprise value of €5 billion. Apollo continues to own 55 per cent of the business.