In the midst of patent controversies over its drive-through-style drink cup, Berry Plastics Corp. has purchased the promotional cup business of one of its contract molding customers. On Jan. 23 Berry acquired the plastic drink cup line of the Alpha Products division of Aladdin Industries Inc. of Nashville, Tenn., for undisclosed terms, said Martin Imbler, Berry's president and chief executive. That deal gives Berry Alpha's injection molds to make 16- to 44-ounce high density polyethylene cups, printing equipment and a business that saw sales of less than $1 million last year, according to Bill Cooper, Alpha vice president and general manager.
Meanwhile, Packaging Resources Inc., the defendant in a lawsuit by Berry Sterling Corp., is countersuing Berry in federal court in Chicago. PRI's Jan. 12 complaint contends that its 32-ounce Drive-N-Go injection molded cup, which fits in a standard car cup holder, does not infringe on Berry Sterling's design patent; and that Berry's public statements that it does infringe are false and misleading - and violate Section 43 of the Lanham Act governing interstate trade.
Terry Cullen, vice president of sales for PRI's Promotional Beverage Division, said Berry's statements-to the drink-cup trade, the press and PRI customers-imply that Berry is the only U.S. firm that can make a large-sized cup that fits the car cup holder. Further, they imply that PRI's cup and a similar cup made by Pescor Plastics Inc. of Fort Worth, Texas-which faces a separate charge of infringing on Berry's patent-are identical.
``We didn't threaten anybody,'' Imbler said Jan. 23 from Berry headquarters in Evansville, Ind. ``As a courtesy to the industry, we communicated with people, informing them that, in our opinion, PRI's cup infringed our patent. Customers can be liable for infringement, just as much as the manufacturer.''
But PRI President Howard Hoeper said the 32-ounce Drive-N-Go cup was the innovation of several PRI employees.
``We felt this lawsuit was necessary to protect the reputation which we worked so hard to build in this industry,'' he said in a prepared statement.
PRI, which holds no patent on its Drive-N-Go cup, has sold millions of the cups in the past year, Cullen said. Berry's market share continues to grow, Imbler said; it now represents 5-10 percent of the company's injection molding sales, which totaled $106 million last year. The firms have no common customers for the product, both executives said.
PRI's suit contains a motion to transfer the case from New York, where Berry filed its suit Dec. 27, to Chicago, closer to PRI's Lake Forest, Ill., headquarters. But it will pursue its countersuit whether or not that motion is granted, Cullen said.
Berry Sterling's Winchester, Va., plant will be receiving the molds and printing machine acquired in the Alpha purchase, Imbler said.
Cooper called stadium cups a ``very, very competitive market.''
``People like Berry ... are much bigger and basically have the economies of scale associated with this product,'' he said.
Berry hopes to propel growth of the business ``significantly beyond'' its current status, Imbler said.
Since acquiring Atlanta-based Alpha in December 1994, Aladdin decided the drink cups, typically called stadium cups, were ex-traneous to its other consumer products interests. Both Berry and Williams Industries Inc., of Shelbyville, Ind., were Alpha's main molders for the cup, according to Cooper.
Berry also molds single-shell drink containers, or sippers, and insulated coffee mugs for the company.
At Atlanta, Alpha employs 120 for decorating and assembly work. It also contracts out blow molding of sports bottles. The company contributes $15 million - all plastics products - to Aladdin's annual $200 million in sales, Cooper said.
The 88-year-old parent employs 350 and operates 53 presses in Nashville to make foam-insulated polypropylene coffee mugs for convenience stores and promotional customers; and PP lunch boxes depicting popular characters from Mickey Mouse to Mighty Morphin Power Rangers. Every year the lunch box lineup changes, depending on ``what's hot and what's not'' among school kids, said Cooper, who is also Aladdin's vice president of operations.
Thermos in Batesville, Miss., is the firm's main competitor in licensing such characters for lunch boxes, he said.