AKRON (June 21, 2005) — Michelin North America Inc. is suing a Canadian tire distributor to stop it from selling an alleged copycat version of one of Michelin's best-selling truck tires.
In a federal lawsuit filed earlier this month in Alabama, Michelin claimed that Dynamic Tire Corp. infringed on Michelin's design patent by selling the Chinese-made Aeolus HN-308 truck tire and others under the Windpower label. Michelin said the Aeolus tire's tread design imitates its own XDA-HT tire design. Michelin is asking the court to prevent further infringement plus award Michelin three times the amount of undetermined damages, the defendants' gross profits from the sales and attorneys' fees.
The lawsuit is part of a “systematic” strategy whereby Michelin intends to act against tire distributors that are selling supposed knockoffs of its tires. Michelin officials said the policy is aimed at protecting the roughly $1 billion it invests in research and development each year—some 4.6 percent of its worldwide revenue last year. Indeed, other tire makers—as well as Michelin—have launched similar lawsuits in the past, with mixed results.
“We are prepared to invest the money we need to protect our rights, and this is a clear strategy we have in North America,” said Luc Minguet, chief operating officer for Michelin Americas Truck Tires.
Robert Sherkin, president of Dynamic Tire, said his representatives are in talks with Michelin's counsel, though he could not comment in detail on the pending litigation.
“We expect to come with an amicable solution in a short period of time,” he told Tire Business.
In the suit, Michelin alleges that the Aeolus HN-308, manufactured in China by Aeolus Tyre Co. Ltd., imitates the tread design of Michelin's XDA-HT long-haul drive tire, which has been on the market for about five years. The charges refer primarily to the tread design, not the tire's construction, Mr. Minguet said. He added, however, that Michelin is pursuing the case largely because the tread design is a tire's most noticeable characteristic to consumers. The tire's tread design was patented in 1997.
Asked whether a similarity among tread designs happens occasionally in the competitive tire market, Mr. Minguet said, “That similar? That identical? No. They could have some similarities because of the physical characteristics of a tire,…but that identical cannot be a coincidence.”
Mr. Minguet explained that Michelin became aware of the tires' supposed likeness during normal reviews of competing tires.
“On this case we found that this infringement…was really deliberate and obvious,” he said. Michelin notified Dynamic of the alleged infringement, officials said, but they said Dynamic Tire argued that it was not infringing on Michelin's patent.
He said Michelin next considered whether to sue the manufacturer, the distributor or the tire dealers buying the tire in question. Michelin opted for the distributor.
“We feel that it is the best way to get to our point and stop the distribution of these tires in the U.S.,” he said.
Asked if this strategy meant the Greenville, S.C.-based tire maker is determined to see the cases through to a trial, the company's chief legal counsel, Mark Williams, said, “We are prepared to see this through to a resolution that we deem is satisfactory.” He added that Michelin will add additional parties to the lawsuit if it deems necessary.
In addition to Dynamic Tire, Michelin named distributor Aeolus Tire—also run by Mr. Sherkin—and Mr. Sherkin himself.
“Through our investigation, we have reason to believe that (Mr. Sherkin) was personally involved in the decisions for them to make this tire,” said Mr. Williams, explaining why Dynamic's president was named in the case. Mr. Williams, however, declined to elaborate on this point.
Craig Anderson, CEO and vice chairman of Hercules Tire & Rubber Co. in Findlay, Ohio, once faced a similar lawsuit brought by Goodyear. In 1995, Goodyear filed a federal lawsuit against Hercules, claiming the tread rubber maker infringed on Goodyear's patented G362 truck tire design. In that case Goodyear also sought damages and any profits made by Hercules—with all amounts tripled.
Mr. Anderson told Tire Business that he offered to settle the suit and stop selling its retread product since the precure mold's profits were outweighed by potential legal costs. He said the suit seemed to have symbolic value to Goodyear, and the case went to trial. Goodyear officials involved with the case could not be reached.
In 1996 the court decided that Hercules did not infringe on the patent. Mr. Anderson said two points that likely helped his company were that Hercules took the product to a patent attorney before its launch to make sure it wasn't identical to Goodyear's and that many other truck tires shared similar characteristics with Goodyear's design.
“There are families in truck tires,” Mr. Anderson said. “I think you can take all the closed shoulder drive or open shoulder drive tires, and I think you're going to see a style that maybe follows a Bridgestone or Michelin or Goodyear or Kumho. You're going to see similarities in the design. There'll be element changes, but a closed shoulder's a closed shoulder.”
Last year Yokohama Tire Corp. and St. Louis-based distributor Zisser Tire Co. settled a similar patent infringement case. Yokohama had filed suit, charging Zisser with selling a Chinese-made tire that allegedly copied the patented design and tread pattern of Yokohama's AVS Sport tire.
As part of the settlement, Zisser agreed to stop selling the Wanli S-1099 high-performance tire and to pay $100,000 to Yokohama. Yokohama said last fall it still intended to sue the Chinese manufacturer, South China Tire & Rubber Co. Ltd.
And in 1996, Michelin lodged a complaint through the U.S. International Trade Commission (ITC) against Kumho Tire USA Inc. and its South Korean parent for alleged patent infringement of a steer tire tread design. Michelin sought a “cease and desist” order as well as undefined damages. Michelin later withdrew the complaint to avoid revealing trade secrets, according to ITC documents from 1997.
Mr. Williams said the Kumho case was “resolved,” and there is no relation between that case and the current suit against Dynamic.