Spurred by a complaint from a California designer of plastic compact disc racks, the U.S. International Trade Commission opened an investigation Dec. 19 into claims that a Canadian injection molder is infringing on a patent.
Spectrum Concepts Inc. of Carlsbad, Calif., is accusing Bryan Plastics Ltd. of Pointe-Claire, Quebec, of violating Spectrum's U.S. patents for a CD rack that fits into ready-to-assemble furniture such as entertainment centers and desks. Bryan officials deny the charge.
The ITC said its decision to open a Section 337 unfair trade investigation does not mean it has reached any conclusions about the merits of the case, and a Spectrum official said talks with Bryan continue.
Spectrum also said it initially named five CD rack manufacturers or furniture makers in its complaint, but reached a settlement with the other four. They are: Mylex Ltd. in Toronto; Nicolet Plastique Ltee. in Nicolet, Quebec; Les Ameublements Quebeko Inc. in Terrebonne, Quebec; and Poh Huat Furniture Industries in Muar, Malaysia.
JoAnne Berg, Spectrum vice president and chief financial officer, declined to disclose terms of the settlements.
The company is asking the ITC to order Bryan to stop importing the racks into the United States.
Bryan director Rachel Clement said the company has never sold directly into the United States. It sold CD racks to Mylex, but does not have any control over where that furniture maker sells its products, she said.
``We don't think we should be involved in this at all, because we do not believe our product infringes on the patent,'' Clement said. ``We also hold a Canadian design patent on our product.
``We think it's a tempest in a teapot,'' she said.
Spectrum also said Bryan tried to market its CD rack directly to a manufacturer in the United States.
Bryan said a large U.S. furniture maker approached the firm asking for a quote on the CD racks.
``Two patent attorneys advised us the U.S. customer could have problems with Spectrum's patents'' in the United States, Clement said.
Those lawyers did not do any research on the patents, but because there was even a possibility of an entanglement, ``the U.S. account doesn't want the problem,'' she said.
Clement said Bryan, which has 12 presses at its plant, is a small player in the CD rack market and Spectrum has the ``lion's share'' of the U.S. and Canadian business. Berg said only that Spectrum has a ``large share'' of the market.
Spectrum designs and markets storage devices for CDs, videotapes and other media. It subcontracts its manufacturing to three Southern California injection molders, Berg said.