Smyrna, Ga-based blow molding machine builder Nissei ASB Co. and its parent company have settled a patent infringement lawsuit against Lee's Summit, Mo.-based mold manufacturer R&D Tool & Engineering Co. Ltd. for an undisclosed amount of money.
Komoro, Japan-based Nissei ASB Machine Co. Ltd. and its subsidiary had sued R&D in February 2018 for breach of contract and violation of three patents.
The breach of contract claim alleged R&D manufactured and sold patented equipment without a license going back to 2013. The patent infringement allegations were related.
In the last three years, the civil case has seen a change of venue; additional allegations of misappropriation of trade secrets and tortious interference with business relations; counter claims; and finally mediation.
Details of the settlement are confidential, according to a news release from Nissei ASB, which had filed a 206-page lawsuit claiming R&D improperly manufactured and sold molding equipment for use in ASB's injection stretch blow molding machines, particularly the ASB-150DPW machine.
As part of the settlement, the release says Nissei ASB will receive an undisclosed amount of money from R&D for the past sales of R&D's mold of the 150DPW.
Also, Nissei ASB will grant R&D a limited, nonexclusive, royalty-bearing license to sell its molds for the 150DPW.
In addition, Nissei ASB issued a warning that it "will continue to take appropriate measures against any entities anywhere in the world" to protect its patents and other intellectual property rights.
R&D officials declined comment on the settlement in an email citing confidentiality terms.
The lawsuit against R&D was filed in the U.S. District Court in Atlanta in early 2018 then transferred, in part for the convenience of potential witnesses, to the U.S. District Court in Kansas City in January 2019.
The case stems from what Nissei ASB contends was a one-time license for R&D to pay Nissei ASB $30,000 to make and use one single mold for a 30-ounce container in March 2013.
Founded in 1976, R&D designs and builds custom injection tools, mold units and parts for blow molding machines used to make plastic bottles, jars and containers for food and beverages, pharmaceuticals, and consumer and industrial products.
Nissei ASB designs and builds machines, mold units and parts, including the ASB-150DPW, to manufacture bottles, jars and other containers for the food and beverage, cosmetics and pharmaceuticals markets.
Nissei ASB typically sells molds to use with its machines. However, the company made an exception when a third-party customer, Plastipak Packaging Inc., bought an ASB-150DPW machine and asked to have R&D make a mold for it instead of buying the mold from ASB.
Nissei ASB and R&D then came to a confidential agreement, according to the lawsuit. Nissei ASB says it granted R&D a one-time license to make one mold for the ASB-150DPW machine. As part of the royalty deal, R&D agreed to pay Nissei ASB $30,000 for the license to make the mold and to indemnify R&D against intellectual property violations in doing so.
However, Nissei ASB learned that R&D made, used and offered for sale additional molds for the ASB-150DPW, according to the lawsuit.
"As a result of R&D's breach of contract, ASB sustained damages greater than $75,000, including but not limited to lost profits, interest, loss of market share, price erosion, loss of goodwill, harm to reputation, loss of business opportunities and other damages," the lawsuit says.
R&D denied the breach of contract allegation and infringement of "any valid and enforceable" patents in other court filings. R&D said none of the three patents in the lawsuit had been issued when Nissei ASB and R&D entered their agreement. Two patents were issued nine months later and one two years later so they weren't part of any intellectual property in the contractual agreements, a defense filing says.
"R&D had no need to obtain a license under yet-to-be-issued patents," the court document adds.
R&D also argued that nowhere in the contractual agreements did R&D promise that it would never make another mold for any other ASB-150DBW machine.
For the mediation, the two parties designated Gerald Rosen, a retired U.S. District Court judge in Detroit who specializes in the resolution of complex disputes, including patent cases. Mediation is a process in which a neutral third party assists the parties in developing and exploring their underlying interests, legal positions and options to resolve the case through negotiations.
Nissei ASB and R&D "made substantial progress towards a global resolution of this matter" early on during the mediation process. After two sessions, the two sides decided to focus their resources on negotiating a settlement rather than on further litigation, according to court documents.
The parties reached a settlement with confidential terms. All the claims and counterclaims were dismissed with prejudice on March 12 by Judge Greg Kays of the U.S. District Court in Kansas City.