Kenny Doyle was out on a routine sales call in southern California when he noticed something odd in the corner. The customer he was visiting had just purchased new computers for the office, and the packaging was in the trash heap.
“Something caught my eye,” he says, as he looked at the plastic cushions used to protect the computers when they’re inside the cardboard boxes. “It was a different color and it looked different to me,” he said. “They were Lenovo boxes.”
The plastic cushions he removed seemed almost identical—except that “they had just cut the top off”—to those made by the company that Doyle works for, Reflex Packaging. And they came with one of Reflex’s main customers, Lenovo. But they weren’t made by Reflex.
Similar incidents began occurring around Forrest Smith, general manager of the firm and inventor of the packaging patent. People he knew who had just purchased a Lenovo PC would email him asking “When did you start making your parts in green?”
He hadn’t.
And now he is suing Lenovo—China’s largest personal computer manufacturer, and fourth largest in the world (its income was $16.6 billion in 2010)—for stealing his design.
When he saw the pictures, “I thought, ‘Great, they took our product and made some modifications to it and started producing it,’” he said in a telephone interview. “There was no doubt in my mind, as the inventor, that this was clearly a copied product,” he said.
He forwarded the photos to a patent agent, who agreed. Then he got a lawyer and started talking to Lenovo.
“Something caught my eye,” he says, as he looked at the plastic cushions used to protect the computers when they’re inside the cardboard boxes. “It was a different color and it looked different to me,” he said. “They were Lenovo boxes.”
The plastic cushions he removed seemed almost identical—except that “they had just cut the top off”—to those made by the company that Doyle works for, Reflex Packaging. And they came with one of Reflex’s main customers, Lenovo. But they weren’t made by Reflex.
Similar incidents began occurring around Forrest Smith, general manager of the firm and inventor of the packaging patent. People he knew who had just purchased a Lenovo PC would email him asking “When did you start making your parts in green?”
He hadn’t.
And now he is suing Lenovo—China’s largest personal computer manufacturer, and fourth largest in the world (its income was $16.6 billion in 2010)—for stealing his design.
When he saw the pictures, “I thought, ‘Great, they took our product and made some modifications to it and started producing it,’” he said in a telephone interview. “There was no doubt in my mind, as the inventor, that this was clearly a copied product,” he said.
He forwarded the photos to a patent agent, who agreed. Then he got a lawyer and started talking to Lenovo.
Lawsuit Filed
Reflex Packaging designs and produces thermoformed cushions for packaging fragile goods, like computers and hard drives. Thermoforming is a process that uses heat and pressure to make plastics; Smith uses recycled plastics, and Lenovo has won environmental awards for using his products.
For around 30 years the primary means of shipping computer parts had been foam. “We were the first to take a thermoform part and make a cushion that was able to function,” Smith said.
Reflex had been “grandfathered” into Lenovo’s supply chain when the Chinese company came out of nowhere to buy IBM’s computer division for US$1.75 billion in 2005.
Business was coasting along comfortably, at the rate of 5-10 thousand systems per week, with Reflex supplying the patented cushions—until around 2008, Smith recalls.
Every year, typically, computer companies spruce up their product ranges. With new designs comes the need for new cushions to protect them when shipping. Usually Smith talks with Lenovo personnel about the fresh specs.
But in 2008 the conversation went slightly differently. Lenovo wanted Reflex to remove its name and patent number from the products.
Smith didn’t consent to the second part, “so they stopped doing business with us and started their own version,” he says. Reflex’s business with the computer giant in China has essentially “been eliminated.”
He believes that Lenovo simply took his patent to a thermoform manufacturer in China and got them to make something very similar.
A year later Lenovo was shipping its products to the U.S. using stolen intellectual property, Smith says.
The case was filed with the California Northern District Court in March 2010, after discussions broke down. The local Orange County Register reported on the story.
Read More...Outrage
When a customer sues its buyer, that’s usually the end of the relationship, “but on the other hand, you have to protect your property or else anyone will walk in and take it,” Smith said.
The legal process is moving “painfully slow” for Smith. “We’re probably right in the middle of the case against them,” he said. The two parties are combing the minutiae of each other’s claims before the case goes to trial.
Lenovo has presented several versions of events. Initially they said that one of their own people, packaging engineer Christopher Sattora, was involved in the product development. But when he worked at Lenovo all he did was tell Reflex the weight and sizes of the computers, for testing. “The guys in China were saying just stuff that a normal person would think, ‘What? That’s crazy, what are you talking about?’” Smith said.
Lenovo in the U.S. did not return calls or emails requesting they clarify the matter when contacted by The Epoch Times.
Smith says he is not exactly upset, but that “the blatancy of it kind of aggravated me.”
Aside from what he sees as the brazen theft, he was roused by something else. “The commentary from our counsel over in China was even more frustrating, which was that your odds of suing successfully in China because of this are very low, because Lenovo is one of the ‘great sons of China.’ That was the message that I got back.”
Lenovo has close ties with the Chinese Party-state. It is held up as a model of China’s development, an ideal “China Story,” writes the author Ling Zhijun in her book “The Lenovo Affair.” Originally a state-owned entity, it was later spun out as a private concern, but the regime still owns the largest share and exerts control.
The company became well-known in the West only after its bold 2005 acquisition of IBM’s personal computer business, which it soon resuscitated and springboarded from.
The IBM buy-out was understood within China as a “powerful blow” to the “plot by global Western enterprises” to take over the Chinese computer market, Ling writes.
It makes Lenovo, or Lianxiang in Chinese, a standard bearer among the new cohort of nationalist Chinese companies that succeed in the domestic market before launching out to tackle the global competition.
The Chinese communist leadership wishes to stake out key commercial territory for Chinese companies, Ling writes, and Liu Chuanzhi, the founder of Lenovo and “godfather” of China’s IT industry, was able to market himself in that mold. He won the support from Party leaders crucial for his business’s success.
The official connection is particularly galling to Congressman Dana Rohrabacher (R-CA), a long-term crusader against Chinese predations against American companies. “You have a situation where private companies are doing this, and that’s bad enough, but to know that companies where the government has a stake are directly engaged in these types of predatory practices, it makes it even worse,” he said in a phone interview.
He added: “When the public learns the full details about what’s going on to American companies…we’re going to have not just upset but outrage.”
Smith plans to pursue legal action in other countries that Lenovo ships to. Ideally he would like them to stop copying the product and buy it from him instead. Failing that, the court may only be able to stop the product entering the United States.
Lenovo, in emails to Smith, said that there are many differences between the two products. They wrote: “We all respect and protect your intelligence and work.”
For around 30 years the primary means of shipping computer parts had been foam. “We were the first to take a thermoform part and make a cushion that was able to function,” Smith said.
Reflex had been “grandfathered” into Lenovo’s supply chain when the Chinese company came out of nowhere to buy IBM’s computer division for US$1.75 billion in 2005.
Business was coasting along comfortably, at the rate of 5-10 thousand systems per week, with Reflex supplying the patented cushions—until around 2008, Smith recalls.
Every year, typically, computer companies spruce up their product ranges. With new designs comes the need for new cushions to protect them when shipping. Usually Smith talks with Lenovo personnel about the fresh specs.
But in 2008 the conversation went slightly differently. Lenovo wanted Reflex to remove its name and patent number from the products.
Smith didn’t consent to the second part, “so they stopped doing business with us and started their own version,” he says. Reflex’s business with the computer giant in China has essentially “been eliminated.”
He believes that Lenovo simply took his patent to a thermoform manufacturer in China and got them to make something very similar.
A year later Lenovo was shipping its products to the U.S. using stolen intellectual property, Smith says.
The case was filed with the California Northern District Court in March 2010, after discussions broke down. The local Orange County Register reported on the story.
Read More...Outrage
‘Outrage’
When a customer sues its buyer, that’s usually the end of the relationship, “but on the other hand, you have to protect your property or else anyone will walk in and take it,” Smith said.
The legal process is moving “painfully slow” for Smith. “We’re probably right in the middle of the case against them,” he said. The two parties are combing the minutiae of each other’s claims before the case goes to trial.
Lenovo has presented several versions of events. Initially they said that one of their own people, packaging engineer Christopher Sattora, was involved in the product development. But when he worked at Lenovo all he did was tell Reflex the weight and sizes of the computers, for testing. “The guys in China were saying just stuff that a normal person would think, ‘What? That’s crazy, what are you talking about?’” Smith said.
Lenovo in the U.S. did not return calls or emails requesting they clarify the matter when contacted by The Epoch Times.
Smith says he is not exactly upset, but that “the blatancy of it kind of aggravated me.”
Aside from what he sees as the brazen theft, he was roused by something else. “The commentary from our counsel over in China was even more frustrating, which was that your odds of suing successfully in China because of this are very low, because Lenovo is one of the ‘great sons of China.’ That was the message that I got back.”
Lenovo has close ties with the Chinese Party-state. It is held up as a model of China’s development, an ideal “China Story,” writes the author Ling Zhijun in her book “The Lenovo Affair.” Originally a state-owned entity, it was later spun out as a private concern, but the regime still owns the largest share and exerts control.
The company became well-known in the West only after its bold 2005 acquisition of IBM’s personal computer business, which it soon resuscitated and springboarded from.
The IBM buy-out was understood within China as a “powerful blow” to the “plot by global Western enterprises” to take over the Chinese computer market, Ling writes.
It makes Lenovo, or Lianxiang in Chinese, a standard bearer among the new cohort of nationalist Chinese companies that succeed in the domestic market before launching out to tackle the global competition.
The Chinese communist leadership wishes to stake out key commercial territory for Chinese companies, Ling writes, and Liu Chuanzhi, the founder of Lenovo and “godfather” of China’s IT industry, was able to market himself in that mold. He won the support from Party leaders crucial for his business’s success.
The official connection is particularly galling to Congressman Dana Rohrabacher (R-CA), a long-term crusader against Chinese predations against American companies. “You have a situation where private companies are doing this, and that’s bad enough, but to know that companies where the government has a stake are directly engaged in these types of predatory practices, it makes it even worse,” he said in a phone interview.
He added: “When the public learns the full details about what’s going on to American companies…we’re going to have not just upset but outrage.”
Smith plans to pursue legal action in other countries that Lenovo ships to. Ideally he would like them to stop copying the product and buy it from him instead. Failing that, the court may only be able to stop the product entering the United States.
Lenovo, in emails to Smith, said that there are many differences between the two products. They wrote: “We all respect and protect your intelligence and work.”
