Tec Air Inc., an injection molder of plastic radiator fan blades, has been awarded $25.2 million in a bitterly fought patent infringement lawsuit against Denso Manufacturing Michigan Inc. in Battle Creek, Mich., and its Japanese parent.
The jury decision, handed down June 19 in U.S. District Court in Chicago, was portrayed by Tec Air officials as striking a blow for protecting the intellectual property of a small business. Meanwhile, Denso officials remain adamant they did nothing wrong and plan to appeal the verdict.
The 5-year-old case was based on two patents filed in 1974 and 1975 by Tec Air. One patent protected the company's process of dynamically balancing its injection molded radiator fans, while the other covered the physical structure of the mold, said Robert McMurtry, Tec Air vice president and general counsel.
The technology forms the basis for the Willow Springs, Ill., company's entire product line, McMurtry said. Those products include fan blades, blower wheels, impellers and blower systems for the automotive and appliance industries. All Tec Air's products are molded from thermoplastics, such as polypropylene and engineering-grade materials, McMurtry said.
The patent infringement was discovered in 1990 when Denso's U.S. arm, then known as Nippondenso USA, asked Tec Air to submit a quote on making the fans in Battle Creek, according to Tec Air. Denso, which makes automotive heating and air-conditioning systems, sent Tec Air a sample of its current production parts, McMurtry said.
``We noted that Nippondenso infringed our patented method and mold apparatus,'' McMurtry said. ``We tried to negotiate with them to stop infringing on our patents, but they refused to deal with us. So we were forced to file suit'' in June 1992.
Denso officials argued they had not purposefully stolen the patented process and mold structure, Denso spokeswoman Marlene Goldsmith said from the firm's U.S. headquarters, Denso International America Inc. in Southfield, Mich.
Before using the process, the company conducted a thorough patent search that came up empty, she said. In addition, the process and mold were simple and obvious enough to be used by any company, Goldsmith said.
Still, in 1994, Denso was found liable in a jury trial of usurping the patents in Battle Creek and at its parent's Kariya, Japan, headquarters. After further arguments over the patent's validity, the Chicago court awarded $25.2 million in damages in June.
The amount was based on potential royalties that Tec Air would have received if the molder had licensed the process during 1990 and 1991, when Denso used the patented process, McMurtry said.
Denso is disappointed with the court's findings, Goldsmith said.
``We feel that the jury verdict is shocking and inappropriate,'' she said. ``During the entire litigation, we sincerely believed in and furiously defended our position. We still believe in our position and are very carefully considering future steps.''
For Tec Air's part, the millions in damages is a moot point, McMurtry said. The protection of intellectual property was more important.
``We didn't file a case to get a lot of money,'' he said. ``We just believe that if a company of any size spends time and effort to develop a competitive advantage through products and processes, no one should have the right to steal them.''
On an unrelated note, Tec Air is in the midst of expanding its Willow Springs plant. The supplier recently has purchased 10 Van Dorn Demag injection molding machines with clamping forces of 120-170 tons, McMurtry said. The acquisition will increase the number of presses at the plant to 30.
The company, which has 125 employees, also is expanding the 60,000-square-foot plant by an additional 10,000 square feet to accommodate the presses, new engineering studios and test labs. The work is to be completed this year.
The company, which was founded in 1965, is owned by Richard E. Swin Sr. and Richard Swin Jr. Tec Air did not divulge the cost of its current expansion or its sales figures.
Denso recorded $2.5 billion in North American sales and just under $14 billion in worldwide sales in 1996, Goldsmith said.