Like many manufacturers in the competitive plastic bag market, Isaac Bazbaz and his company, Superbag Corp., has seen a sharp rise in imports of the T-shirt bags he makes for grocery stores and retailers.
Unlike others, however, Bazbaz has taken the unusual step of asking for U.S. government help. The U.S. International Trade Commission is investigating the Houston company's complaint that one of its overseas competitors and several U.S. importers are violating its patents by copying a design that makes bags easier to open and handle.
On one level, Superbag's complaint is a narrow patent dispute between competitors, and ITC officials stressed they have made no decision on its merits. But in an industry very sensitive to imports, the case is being watched closely.
Between 1997 and 2002, imports of plastic bags doubled from $480 million to $960 million. Imports rose an additional 27 percent in the first two months of this year. Bag makers complain that low-priced imports are cutting into margins and hurting business.
Bazbaz said Superbag's problems began in 2001, when the company lost the business of retailer Target and started seeing bags that it said infringe on its patents at Target stores in the Houston area. It claims it has been able to trace those to offshore manufacturers.
``This is a big deal for us because we see this as something that has no end,'' said Bazbaz, a director and member of the family that owns Superbag. ``There are hundreds of companies overseas that can manufacture these bags just by changing the molds. They just copy the mold and that's it.''
The complaint names one bag manufacturer in Thailand, Thai Plastic Bags Industries Co. Ltd. in Nakhon Pathom, and three U.S. importers: Hmong Industries Inc., in St. Paul, Minn.; Spectrum Plastics Inc. in Cerritos, Calif.; and Pan Pacific Plastics Mfg. Inc., in Union City, Calif.
The complaint said other companies also infringe on Superbag's patent, but the four are ``believed to be among the most significant, if not the most significant.'' It said some of them import from China.
The three U.S. firms did not respond to requests for comment. The Thai firm could not be reached.
Superbag, which also sells to Wal-Mart, grocer Harris Teeter and others, is asking the government to ban imports of any bags that violate the patent.
Bazbaz said his firm has been hurt, but he declined to provide details. The bags at issue are a major part of its business, he said.
``It has prevented us from growing in this area of business and prevented us from continuing to invest in new technology,'' he said.
The company, which extrudes its own film and converts it in Houston, is the fifth-largest maker of plastic T-shirt bags in the United States, Bazbaz said.
Patent-infringement issues also crop up among domestic manufacturers. Superbag, in fact, said it has a formal agreement with Orange Plastics Inc. not to sue it for violating the same patent, and Orange has a reciprocal agreement not to sue Superbag for violating Orange patents.
The plastic bag industry is paying attention to this import complaint, said Donna Dempsey, executive director of the Film and Bag Federation, a unit of the Society of the Plastics Industry Inc. in Washington. Another company owned by the Bazbaz family, Polytex Fibers Corp., is a member of the FBF.
The industry is very concerned about rising imports, and is participating in SPI lobbying activities to stress the general argument that China needs to live up to its World Trade Organization obligations.
FBF has met with Commerce Department officials to make them aware of the bag industry's specific concerns, but is not sure what to do beyond highlighting the issue to the government because the group still is studying it, Dempsey said.
Bazbaz said his company thought a long time before bringing the complaint, and said it is ``not something we've done lightly.''
He stressed that the company is not going to take legal action against any of the buyers of the bags it said infringe. But he acknowledged that even filing a complaint might make some customers nervous: ``I don't think Target is going to be happy, it's clear.''
Target officials did not respond to a request for comment. Bazbaz said his customers should put themselves in his place. He said he believes they would take the same steps to protect their patents.
``This is a decision we had to make,'' he said.