In 1992, Forma-Pack Inc. garnered the top prize — the Diamond Award — in DuPont Co.'s annual tribute to innovations in plastic food packaging.
Today, the two companies are embroiled in a nasty court battle. Stockton, Calif.-based Forma-Pack claims DuPont has been trying to put the company out of business.
DuPont, based in Wilmington, Del., claims the accusations are unfounded, and blames Forma-Pack's troubles on finicky packaging machinery and a product that failed to catch on.
The most recent move was by Forma-Pack, which on March 4 filed a cross-claim for antitrust violations in California Superior Court in Stockton against DuPont for damages in excess of $100 million. The claim was a reply to a 1996 suit filed by DuPont, seeking $69,000 in payment for plastic purchased by Forma-Pack.
Forma-Pack developed the Clean-Top six-pack beverage carrier, a patented product made of PET film that covers the entire top of a six-pack. The product was touted because it could incorporate recycled plastic, avoids problems of wildlife entanglement, and was more sanitary.
In its suit, Forma-Pack claims DuPont orally promised to ``commit $400 million worth of its resources to the development of the Forma-Pack patent and technology; that DuPont would sell plastic resin to Forma-Pack at a 25-30 percent discount; that DuPont would develop a tailored, degradable and recycled material for Forma-Pack's high-speed application; and that DuPont would provide Forma-Pack with a supply of plastic sheets made from post-consumer recycled materials from DuPont's Plastic Recycling Alliance.''
The suit also charges DuPont's motive is to protect its market share for the sale of virgin plastic.
DuPont, in a news release, disputed those claims.
``DuPont devoted hundreds of thousands of dollars to help promote and advance Forma-Pack's new product and worked to obtain regulatory approval of the process in 12 states,'' the press release said. ``Unfortunately, Forma-Pack's machines failed and were found to be too finicky to run in a commercial setting.''
DuPont maintains that after Forma-Pack won the DuPont Diamond Award, Forma-Pack ``walked away from its plastic supply relationship with DuPont and tried to sell its entire business, but failed.''
DuPont also claims that Forma-Pack President Peter Sust wrote the Forma-Pack machine ``has not proven to be reliable enough from a production standpoint. Forma-Pack understands this.''
DuPont added that the carrier uses 25 percent more plastic than conventional carrier rings.
``Forma-Pack's process failed to keep up with the modern trend of designing products to eliminate excessive material,'' DuPont said.
Part of the dispute concerns the fate of the Plastic Recycling Alliance, a pioneering plastics recycling plant based in Chicago.
In July 1992, DuPont sold PRA to Illinois Tool Works Inc., a Glenview, Ill., firm and major supplier of HiCone six-pack carriers — a competitor of Forma-Pack's.
``DuPont filed a lawsuit against Forma-Pack ... for defective material delivered in 1992 by DuPont,'' said Joseph Alioto, Forma-Pack's lawyer. ``After filing the lawsuit, DuPont suggested that Forma-Pack file for bankruptcy to avoid the debt. This lawsuit was DuPont's last effort in a series of activities designed to put Forma-Pack out of business and seize its patents and intellectual property rights. Our suit was a response to this attempted takeover.''
Among other allegations, Forma-Pack charges that DuPont concealed information about plans to sell PRA to ITW.