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U.S. packaging supplier accuses former customer of stealing intellectual property

Linda Casey

January 29, 2014

2 Min Read
U.S. packaging supplier accuses former customer of stealing intellectual property

 


In what it claims is "a David versus Goliath Case of Patent Infringement," an U.S. packaging company has filed a patent infringement suit against a large multinational company with a strong footprint in China. The U.S. packaging supplier alleges that the large multinational, a former customer, intentionally copied its patented sustainable packaging material. 


In what it claims is "a David versus Goliath Case of Patent Infringement," U.S. packaging supplier Reflex Packaging Inc. has filed a patent infringement suit against a large multinational company with a strong footprint in China. In the complaint, the U.S. packaging supplier alleges that Lenovo intentionally copied its patented Reflex packaging material. Reflex is an environmentally responsible cushioning alternative invented by Forrest Smith, owner of Reflex Packaging. The 100 percent recycled content packaging product is a thermoformed cushion made out of used plastic milk jugs and is also 100 percent recyclable.

 

"Intellectual property theft by Chinese manufacturers means a huge profit loss for American business. We can't allow them to squash every US supplier that doesn't capitulate to their demands," says Smith. "Our case is important in a broad sense because the United States is no longer one of the world's manufacturing capitals. Instead, our wealth comes increasingly from our innovation, inventiveness and expertise."


A statement from Reflex Packaging states that it originally established a successful relationship with IBM by providing eco- friendly packaging material for the ThinkPad and other products. When Lenovo acquired the IBM personal computers division in 2005, the packaging agreements came along with the purchase. In mid-2008, Lenovo requested that Reflex Packaging remove its patent numbers from the cushions that Reflex sold to Lenovo.


Smith says he first sought the help of a packaging engineer employed by Lenovo America to mediate the situation. According to the Lenovo America engineer, the packaging team at Lenovo in China did not seem to have a full understanding of intellectual property rules.


"The engineer in the U.S. tried many times to explain to the China packaging team that the cushioning technology supplied by Reflex Packaging to Lenovo was solely the intellectual property of Reflex, as reflected in its patents, and was not something that Lenovo could claim to control," he remarks.


Reflex Packaging also released a statement from Dr. Scott Browne, visiting professor of strategy and management at Chapman University:

"This case highlights a crossroads that American organizations increasingly find themselves at: it is far less expensive to license technology and manufacturing to excellent, high quality overseas operations. However, culturally and legally, the ability of American firms to protect their IP overseas is weak at best. This leaves domestic manufacturers with a terrible choice: Do I manufacture here at an immediate cost advantage, or license my product for a longer, but smaller, income stream?
"This choice becomes even more complex in that domestically manufactured products can be reverse-engineered and copied overseas, so that even the control coming from domestic production is temporary at best," he adds.

 

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