Ropak Sues Rival, Claiming Libel : Business Says Perstorp Xytec Interferes With Its Customers
In an Orange County Superior Court suit, plastic-packaging manufacturer Ropak Corp. on Wednesday accused a competitor of libel and interfering in its relationship with customers.
The competitor, Perstorp Xytec Inc., had already sued Ropak in Detroit a year and a half ago, accusing Ropak of infringing on Perstorp patents.
Perstorp last year persuaded a federal court judge to issue a preliminary order barring Ropak from making or selling several types of collapsible plastic bins used for shipping parts to factory assembly lines. Once empty, the bins can be collapsed and sent back to the supplier.
In its own suit, Ropak alleges that Perstorp has been playing dirty pool by telling Ropak’s customers, suppliers and bankers that Ropak is near bankruptcy.
“We are nowhere near bankruptcy,” Ropak Chief Executive Officer Bill Roper said Wednesday. “And we won’t be muscled out of this business, which is what’s going on here.”
But Perstorp said it isn’t rumor at all. Ropak, Perstorp said, told the federal court in Detroit that if the injunction against it were allowed to stand, Ropak might go into bankruptcy.
Perstorp Xytec merely copied that statement from a court document and repeated it in press releases about the case, said CEO Spencer Hoopes.
“I don’t see how that could possibly be libelous,” he said. “We never said anything that wasn’t in their own filings in court.”
Ropak, which says it is the largest maker of these collapsible plastic bins, said its finances are much stronger now than last year, when it told the court it might have to file bankruptcy if it was hit with an injunction. The company says it has already lost several customers because Perstorp keeps mentioning the bankruptcy statement. Ropak is asking an unspecified amount of damages.
Perstorp AB is a Swedish company that bought Xytec Inc. of Tacoma, Wash., in May.
Xytec, however, contends that it is actually a small company and the one being muscled; it’s a $20-million concern being hassled unfairly by a $94-million competitor, it says.
In fact, Xytec says, one reason it sold itself to Perstorp a year ago was the draining costs of its patent lawsuit against Ropak.
The collapsible bin business “is our bread and butter,” Hoopes said. “For them it’s just another growth business they’ve gotten into.”
Ropak, on the other hand, intimates that Xytec has already driven one small company out of existence with a patent suit and is now using the same weapon on Ropak.
Ropak says it bought the tooling to make its Mainstream bins in 1989 from that company, a small Detroit concern that had also been sued by Xytec. That suit was settled and the small manufacturer substantially changed the design of its bins, Ropak said.
Before it bought the tooling, Ropak’s lawyers told it that the modified bins didn’t infringe on Xytec’s patents, Ropak said.
But Xytec sued again. And although the Detroit lawsuit has yet to come to trial, a federal court judge there last month ordered Ropak to stop making the Mainstream bins and another type of bin called Delta.
Ropak, based in Fullerton, said it is still making the collapsible bins, which account for less than 10% of its business. But, Ropak says, it has changed the design so as not to infringe on Xytec’s patents.
Ropak lost $1.3 million last year on sales of $94 million, compared to a 1990 loss of $219,000 on sales of $93.2 million.
Ropak’s biggest business is making plastic containers for various products, from ink to juice to ice cream to salmon roe, in eight plants in the United States and Canada.
Its stock dropped 25 cents Wednesday to $4.625 on the over-the-counter market after the company sent out a press release about the lawsuit.
