Pipe and valve firm Asahi/ America Inc. has filed a patent infringement suit against MFRI Inc., claiming MFRI and its associate companies are duplicating Asahi's double-containment piping system used for underground transport of hazardous materials.
The suit is the culmination of a six-year process in which the U.S. Patent and Trademark Office initially upheld a 1991 challenge MFRI had made to Asahi's patent. Malden, Mass.-based Asahi immediately appealed MFRI's challenge, but a federal review of the situation was not concluded until June 26, when the patent office confirmed the validity of Asahi's patent.
In the meantime, MFRI, based in Niles, Ill., and several other companies continued to manufacture double-containment piping systems that violated Asahi's patent, according to Leslie B. Lewis, Asahi's chairman, president and chief executive officer.
Asahi is seeking temporary and permanent injunctions to stop MFRI from manufacturing the systems. Asahi also wants to recover past damages, but Lewis declined to predict how much that amount would be.
Similar suits will be filed against the other companies in the coming months, said Lewis, who declined to identify those firms.
Jeff Moore, sales service manager for MFRI subsidiary Perma-Pipe Inc., said the company was unaware of the suit.
``This is new to us, but we'll vigorously defend ourselves against any claim,'' Moore said in a July 23 telephone interview from Niles. ``We're not in violation of a patent in any way.''
According to Moore, MFRI's Double-Quick-brand double-containment piping system makes up ``a fraction of 1 percent'' of the company's overall sales, which have totaled $44 million to date this year.
Moore said the company primarily markets heating and cooling piping systems to the construction industry.
Asahi ranked 97th in Plastics News' 1997 survey of North American pipe, profile and tubing extruders with 1996 related sales of $13.7 million, more than double what it had in 1994.
Lewis said sales of its Duo-Pro-brand double-containment systems accounted for 10-15 percent of 1996 sales.
Asahi officials said they believe that I. Wayne James, a sales executive who left Asahi to take a position with Simtech Inc. in 1988, played a significant role in the matter. Simtech is owned primarily by Midwesco, a firm that also has minority ownership in MFRI.
``Wayne James is the obvious connection,'' Lewis said in a July 23 interview from his Malden office. ``He had sold the product for many years and had an intimate knowledge about its patent and design.''
``This is America and you can try to do what you want, but we have the patent,'' Lewis added. ``It took an awful lot to design this patent and we've stuck with it.''
James, who now is Simtech's president, is telling quite a different story.
James said in a July 24 telephone interview from Niles that he worked for Asahi only as an independent contractor and that sales of Asahi's double-containment systems ``didn't amount to a hill of beans'' at the time he ended his relationship with Asahi after a contract dispute.
James added he did not think the suit ``had much to it,'' particularly because MFRI has been making double-containment systems for 35 years.
``MFRI has been making double-containment systems since before Asahi knew what they were,'' James said. ``They made no changes to the product after I joined Simtech.''
Asahi's suit is an attempt to damage Simtech's ability to compete in the area of polypropylene and polyvinylidene fluoride pipe and fittings, according to James. Simtech imports PP/PVDF pipe, which then is assembled into double-containment systems by MFRI.
``Asahi would like to see Simtech disappear,'' said James, who is the only person named individually in Asahi's suit. ``We're not significant sizewise when compared with Asahi but we're importing a product offering that's competing with them. This is a way to try to force us to spend money that Asahi hopes we can little afford to spend.''
The market for double-containment systems is poised to grow dramatically because of an Environmental Protection Agency mandate requiring double containment for underground hazardous fluid transport that goes into effect next year, Asahi officials said.
The company already has installed more than 1,000 such systems in several markets, including semiconductors, pulp and paper, pharmaceutical manufacturing, site cleanups and landfills, its officials said.
