3M takes friendly rival DuPont to court over licensing fees

  • Article by: SUSAN FEYDER , Star Tribune
  • Updated: April 22, 2010 - 10:00 PM

The Maplewood-based company's patent infringement suit against DuPont is part of an wider effort to guard its hefty investments in research and development.

3M Co.'s claim to a technology it says took a decade to develop is about to be put to a test in a legal battle pitting the company against another corporate giant, DuPont.

It's the latest scuffle in a long relationship -- usually cordial, but sometimes litigious -- between the two companies. Maplewood-based 3M and DuPont have been business partners and sold products to one another over the years, 3M spokeswoman Donna Fleming Runyon said.

But they've also tangled in court, with each company at times accusing the other of infringing on patent rights.

More often than not, 3M is the plaintiff in patent-infringement disputes, a result of its innovation-driven corporate culture, said Kevin Rhodes, chief intellectual property counsel.

"At any given time, 3M may have 40 to 50 intellectual property enforcement matters being investigated or litigated around the world," Rhodes said.

The company has about 50 attorneys in the U.S. and another 30 in foreign countries who work on patent and trademark enforcement.

The suit against DuPont, filed in federal court in Minneapolis, claims DuPont has refused to pay 3M licensing fees for technology that captures the potentially dangerous chemical perfluorooctanoic acid (PFOA) before it enters the environment. PFOA is used as a processing agent or sometimes emitted in making of protective coatings for products that include cookware with DuPont's Teflon. In court filings, DuPont has said that it doesn't believe it needs to pay 3M and that the patent should be declared invalid. A pretrial conference has been scheduled for May.

There's a lot at stake for each company. DuPont's sales of products where PFOA can be found currently total about $1 billion a year, according to company spokeswoman Janet Smith. In addition to cookware, DuPont's coatings are used in a number of products, including textiles, paper, and wire and cable insulation.

3M hasn't specified monetary damages but has said the suit is necessary to protect its rights to a lengthy and costly investment. In 2006 an independent science panel working for the U.S. Environmental Protection Agency concluded that PFOA was a likely carcinogen. The same year several companies, including 3M and DuPont, agreed to phase it out by 2015. 3M, which had started phasing out PFOA in 2000, received a patent on its containment technology in 2008.

3M also licenses the technology to three other companies. Those arrangements could be at risk if DuPont were allowed to use the technology for free or succeeds in having the patent invalidated.

The suit comes as the number of patent infringement suits in the U.S. continues to climb. Since 1991 they've risen at a rate greater than the increase in the number of patents granted, according to a study by PricewaterhouseCoopers.

Fred Zimmerman, a retired business professor from the University of St. Thomas, isn't surprised. "I've been a director for a few companies and worked with others," he said. "Corporate boards tend to regard it as a necessity to be vigilant about pursuing these things."

That's the case at 3M, where research and development spending now totals $1 billion a year. The company owns more than 38,000 patents and patent applications. In 2009 alone it obtained 2,444 patents worldwide.

Although 3M is known mostly for products it markets under its own brand names, like Scotch tape and Post-it notes, the fruits of some of research are licensed and used by other manufacturers. 3M doesn't break out licensing revenue. But Rhodes can cite several examples, such as the 24-karat gold Scotchlite fabric used by Nike to make the running shoes worn by champion sprinter Michael Johnson in the 2000 Olympics.

Rhodes said most patent infringement disputes are settled before going to trial. That's been the case in two previous suits 3M filed against DuPont and another one DuPont filed against 3M. The terms of those settlements were confidential.

3M's most recent patent infringement jury trial in 2005 resulted in a verdict against Pasadena, Calif.-based Avery Dennison Corp. for infringing on a 3M patent on certain adhesives used for large-scale graphic films. 3M won an injunction to stop Avery Dennison from using the patented product plus undisclosed monetary damages.

The clock on 3M's technology to contain PFOA is running out as companies develop processes that don't use or emit the chemical. That's already happened at 3M, which stopped using it in 2008.

"We will meet our commitment [to eliminate PFOA] by 2015, or earlier if possible," said Smith of DuPont. She said the company is developing a PFOA-free alternative and working on conversion plans with customers.

Susan Feyder • 612-673-1723

  • get related content delivered to your inbox

  • manage my email subscriptions

ADVERTISEMENT

Connect with twitterConnect with facebookConnect with Google+Connect with PinterestConnect with PinterestConnect with RssfeedConnect with email newsletters

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

 
Close