On the first day of Interpack, just when the organisers were celebrating the expanded presence of Chinese companies, who more than quadrupled their space from to 2,700sq m, nine of the newcomers – all Chinese packaging machine manufacturing companies – were hit with a patent infringement injunction prohibiting them from displaying or selling equipment for the duration of the show. Stuart Hoggard reports from Düsseldorf.
The injunction was issued against the nine Chinese companies in the District Court Frankfurt following an application by Japanese packaging machine manufacturer, Ishida Co Ltd, alleging patent infringement of its ‘waterproofing’ systems for weighing machines. The nine companies affected were: Kadi Machinery Co Ltd, Multiweigh Co Ltd, Aochi Commercial Machinery Manufacturing Co Ltd, Shunde Jingwei Machinery Manufacturing Co Ltd, Jinyi Packaging Machine Co Ltd, High Dream Intelectualized Machinery Manufacturing Co Ltd (all from Guangdong), Top Weigher Trading Co Ltd, which is purportedly registered in Hong Kong, Saimo Technology (registered in the UK), and Mese Company Ltd, which changed its name shortly before the exhibition requiring the plaintiff to have its injunction re-issued.Under the court order, the Chinese companies were restrained from ‘offering weighing machines of type AC6B41 and AC-6B10 from April 24 to April 30 2008’. The order further constrained the companies from ‘exhibiting these machine types, or wallpapers (posters) nor to provide brochures on which these machines are offered at the Interpack exhibition’.
The Chinese immediately covered the affected equipment with tarpaulins and displayed the injunction in place of posters, and continued to market other products. However, High Dream was forced to withdraw from the show as it had no other products on offer.
Property protection
“We have taken this action to protect our intellectual and patented property rights,” said Paul Griffin, European marketing director of the Japanese company’s European subsidiary, Ishida Europe. “We have known for some time that our products and rights were being copied by a range of companies in China and Russia, but it is very difficult to take action in China against Chinese companies. “Interpack, being an international exhibition in Düsseldorf, we had prepared our documents well in advance to take action against any company from anywhere in the world which sought to show any machine that infringed any of the 1000 worldwide patents which we hold.”
The technology in dispute is known as ‘waterproof’ and is used with weighing and package filling machines in wet environments, such as frozen food, and it’s the technology that enables the waterproofing that is part of the machine Ishida claims a patent upon. However, the patent expires in 2009, after which time it can presumably be copied by anyone anywhere and ‘displayed for sale’. “We have many companies throughout the world who license our technology, however these Chinese companies are not licensees and were served with court injunctions accordingly,” said Griffin.
A Chinese wall
The Chinese companies interviewed seemed somewhat blasé about the whole affair, despite having nothing much to display other than brown plastics-wrapped objects on their stands.
One of the injuncted companies, High Dream went so far as to display a banner reading: ‘Relax – We’ll see you in 2011 – Regards, High Dream’, basically a sideswipe at the ‘Relax, it’s Ishida’ banner.
John Edwards, representative of Saimo Technology UK Ltd, the European subsidiary of Saimo Group Co Ltd in Jiangsu, China, went so far as to question the motive behind the injunction: “In the legal documents, Ishida said that we (Chinese companies) should not be allowed to promote or conduct any deals of our multi-head weighers because our machines are cheap. “But Europe is an open market. To give such a reason is ridiculous,” he added, saying that if that was Ishida’s legal case, the Japanese company should also have gone after other companies also exhibiting weighers at the exhibition.
“For example, there are Italian companies also selling price-competitive weighers,” he explained, while declining to name any such companies. “But the Japanese are only going after the Chinese companies. Why?” According to Edwards, Saimo Technology received no advanced notice of the injunction. “Fortunately for us, our office is a mere half an hour away from the exhibition site in Germany, so our lawyers got to work on the case within 15 minutes of receiving the court order.”
On Monday, April 28, the case was to be heard in court in Köln (Cologne).
“So come by our stand in the afternoon, and when you see the covers off our exhibited weigher, you’ll know that we have won the case,” said Edwards. The covers remained on the equipment for the duration of the show.
Making a statement
Paul Griffin of Ishida said, “We sent lawyers’ letters to the European agents of some of these companies warning them that they were in infringement and that they should cease or suffer the consequences. Clearly these companies were aware that they were in breach of our intellectual property rights before they came to Germany; fortunately Germany has very robust property protection legislation.”
At High Dream, sales manager, Rodger Tsang turned the case around to be a deliberate targeting of China: “Ishida is frightened of competition from China, but it doesn’t worry us.”
When pressed on what he told customers coming to his stand looking for a machine and finding a plastic wrap, he said: “I just take them over to a Turkish stand nearby, actually they are showing one of our machines, so there is no loss of business.”
Lost in translation
This somewhat dramatic start to the largest packaging exhibition worldwide raises more questions than it answers. For example:
Just how many companies are there in Guangdong producing exactly the same equipment? According to the injunction, there are nine – but are they really separate companies? Or is it just one company churning out ‘knock-off’ kit, and a host of disposable ‘shell’ companies fronting the sale? Knowing that they would be held in breach of patent, did these Chinese firms elect to bring the offending kit to Germany leaving their relatively safe haven of Guangdong?
Did they genuinely think they had done no wrong, or did they just feel immune due to combination of China’s manufacturing dominance, lack of internal intellectual property protection, and increasing self confidence? Or, could it all have been a publicity stunt? Were the companies hoping that Ishida or another patent holder would shut them down?
If you think that last statement is ridiculous, then consider this: Other than Ishida and a select few in the market segment, nobody had ever heard of these nine companies before they were injuncted. Also, according to its own admission, Ishida’s patent expires soon, leaving the Chinese at liberty to mount a full scale marketing effort. So was bringing the equipment to Interpack the start of a longer term campaign?
Finally, were the Chinese machine manufacturers, as a state-owned industry, testing the resolve of global equipment manufacturers to uphold patent claims globally? Here we have a Japanese company taking nine separate injunctions against Chinese companies in German courts.
Whatever the motive, the battle lines have been drawn, and Ishida fired the first salvo. As Chinese equipment manufacturers increasingly cast an envious eye over the global packaging machine market, I suspect that for international companies, exhibiting at these mega shows will involve not just space-designers, engineers and the marketing team, but they will also require a legal SWAT team armed with an arsenal of briefs, writs, injunctions, and cease and desist orders ready to be served at the drop of a hat.
The Author: Stuart Hoggard
