Kinze fights Deere, feds to block release of company secrets

An antitrust lawsuit intended to block a small-scale deal between agricultural giants John Deere and Monsanto is putting an Iowa manufacturer at risk of having to divulge its most tightly held business secrets to a competitor, according to court filings.

Attorneys representing Kinze Manufacturing filed motions Thursday asking a federal judge to stop Deere from trying to access a wide variety of internal documents about the Williamsburg company's planting equipment business, including marketing strategies, sales data, and research and development plans. Deere served the Iowa company a subpoena last month seeking the documents as part of an ongoing antitrust lawsuit the Obama administration filed to stop Deere from purchasing Precision Planting, a Monsanto subsidiary that manufactures precision-planting equipment.

The Monsanto subsidiary's components can retrofit planters and offer farmers more control over factors like seed depth and spacing, increasing speed while maximizing accuracy. Kinze is not directly involved in the antitrust lawsuit, but the family-owned manufacturer has its own high-speed precision planter series that was unveiled in 2013.

Learning the potential capabilities and future plans for Kinze's precision planting business could help Deere defend itself against claims that the acquisition of Precision Planting would squeeze competitors out of the market, said Jennifer Zwagerman, the associate director of the agricultural law center at Drake University Law School. Zwagerman reviewed the filings at the Register's request.

Attorneys representing Kinze argued that turning over some of the company's most confidential documents to Deere would irreparably affect its ability to compete in the future with the agricultural giant. Most of the information sought by Deere is held only by key Kinze executives and employees, the motion said.

"Kinze should not be required to turn over its most sensitive confidential business information to Deere, simply because Deere holds the unsubstantiated belief that the information may be relevant to its litigation," the motion reads. "Deere cannot be allowed to convert the Division's lawsuit into a license to rummage through the internal workings of Kinze."

The filings in U.S. District Court in Cedar Rapids also ask a judge to block a similar, but more narrow, subpoena filed by attorneys in the Justice Department's antitrust division. The government attorneys' subpoena asks Kinze to turn over, among other things, any communications with Deere or Monstanto about "actual, potential or contemplated business relationships" between the companies.

The Justice Department filed the lawsuit in August, alleging that Deere and Monsanto already sell 86 percent of the precision-planting equipment available on the market. "If this deal were allowed to proceed, Deere would dominate the market for high-speed precision-planting systems and be able to raise prices and slow innovation at the expense of American farmers who rely on these systems," Renata Hesse, acting assistant attorney general of the antitrust division, said in a statement at the time.

Deere and Monsanto are fighting the antitrust lawsuit and have argued that the acquisition will accelerate the development of promising new technology. Kinze Executive Vice President Brian McKown told Successful Farming magazine in an October statement that the company has taken "no position on the merits of the lawsuit."

Precision-planting equipment is a "new frontier" in agriculture that can help give farmers better data about factors like seed depth, soil quality and moisture needs, Zwagerman said. The technology promises to give farmers the ability to customize their planting to match the factors in each field, while also increasing the speed at which planters can operate, she said. The Kinze 4900 series promises accurate planting at speeds up to 8 mph, according to its website.

Given the expected potential of the industry, it's not surprising to see Kinze fighting in court to protect its secrets. A Kinze representative was not immediately available to speak with a reporter, but Zwagerman said it's likely the company already is developing new technology in the sector that it hopes to keep confidential.

“Big data and precision agriculture are kind of the new frontier as we move forward," she said. "It’s hard to compete in the market and offer new technology if your competition has all your business plans right in front of them."

Kinze is asking for the motions to be heard by a judge based in Iowa, even though the antitrust lawsuit is unfolding in a federal district court in Illinois. A John Deere public relations official did not immediately respond to a Register reporter's inquiries about the new filings.

Kinze has already turned over more than 18,000 pages of less sensitive financial and business documents to the antitrust division and Deere as part of an investigation that was done before the lawsuit was filed. Reviewing, processing and providing the additional information requested in the subpoenas would cost the company more than $75,000, lawyers wrote in the filings.

The Iowa company was formed in 1965 by Jon Kinzenbaw, who still serves as CEO and chairman of the company's board.