Small Orange County, CA Company Fights to Reclaim its Innovation taken by a Chinese Giant

Feb. 10, 2011 - PRLog -- A “David vs. Goliath” Case of Patent Infringement

SANTA ANA, CA – Reflex Packaging, Inc. is in the business of protecting its customers’ products during shipping. Now the small company in Santa Ana is fighting to protect its patented Reflex® technology against a multi-billion dollar corporate giant in China.

The battle is a “David versus Goliath” scenario. Reflex Packaging shot the first round last year by filing a patent infringement suit against Lenovo.  The complaint alleges that Lenovo intentionally copied its patented Reflex® packaging material.  Reflex® is an environmentally responsible cushioning alternative invented by Forrest Smith, owner of Reflex Packaging. The 100% recycled content packaging product is a thermoformed cushion made out of used plastic milk jugs and is also 100% percent recyclable.

“Intellectual property theft by Chinese manufacturers means a huge profit loss for American business. We can’t allow them to squash every US supplier that doesn’t capitulate to their demands,” said Smith.  According to the Orange County business owner, Lenovo was fully aware of Reflex’s intellectual property (IP).  

“Our case is important in a broad sense because the United States is no longer one of the world’s manufacturing capitals. Instead, our wealth comes increasingly from our innovation, inventiveness and expertise,” Smith added.

Originally, Reflex Packaging established a successful relationship with IBM by providing eco- friendly packaging material for the ThinkPad® and other products. When Lenovo acquired the IBM personal computers division in 2005, the packaging agreements came along with the purchase. In mid-2008, Lenovo requested that Reflex Packaging remove its patent numbers from the cushions that Reflex sold to Lenovo.

At first, Smith sought the help of a packaging engineer employed by Lenovo America to mediate the situation. According to the Lenovo America engineer, the packaging team at Lenovo in China did not seem to have a full understanding of intellectual property rules.

“The engineer in the U.S. tried many times to explain to the China packaging team that the cushioning technology supplied by Reflex Packaging to Lenovo was solely the intellectual property of Reflex, as reflected in its patents, and was not something that Lenovo could claim to control,” said Smith.

According to Dr. Scott Browne, Visiting Professor of Strategy and Management at Chapman University, "This case highlights a crossroads that American organizations increasingly find themselves at:  it is far less expensive to license technology and manufacturing to excellent, high quality overseas operations.  However, culturally and legally, the ability of American firms to protect their IP overseas is weak at best.”

“This leaves domestic manufacturers with a terrible choice:  Do I manufacture here at an immediate cost advantage, or license my product for a longer, but smaller, income stream?”

“This choice becomes even more complex in that domestically manufactured products can be reverse-engineered and copied overseas, so that even the control coming from domestic production is temporary at best.”

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Katie specializes in crisis communications and communications program management and has worked in Orange County, Los Angeles, Northern California, Arizona, and Europe, within both the public and private sectors. Her strengths include building consensus, writing, event planning and public speaking. She assists her clients in gaining approval for their projects while making their way through the entitlement process, as well as reputation management and strategic message development. She has also worked extensively with city councils in Southern and Northern California, as well as other elected and appointed officials. Katie earned her APR (Accreditation in Public Relations) from the Public Relations Society of America in 1996.