An area packaging company has filed a federal lawsuit against Frito-Lay, accusing it of stealing a design for promotional boxes of chips torn open by video gamers across the country last year.
Elk Grove-based Clear Lam Packaging Inc. sued Frito-Lay Inc., maker of Fritos and countless other salty vending machine fare, last week in Chicago's federal court, claiming that new packaging designs it made available to Frito-Lay under confidentiality agreements ended up as the basis for packaging used to house 7-oz. servings of Doritos sold alongside Microsoft’s new Xbox One console.
The “Gamer Pack” of Doritos included a type of flexible film packaging that shares major aspects of Clear Lam’s trademarked “PrimaPak” technology, the Sept. 18 suit alleges.
“The PrimaPak System includes a commercially viable method of producing a first of its kind cubed, flexible, recloseable package commonly used for a variety of consumer and industrial products,” Clear Lam asserts. “Among other things, the PrimaPak System is designed to replace traditional stand-up pouches, bags and a variety of preformed rigid containers such as plastic jars, cans, bottles and trays.”
Clear Lam contends it holds patents to the manufacturing process and zealously guards the particulars of it, even within the company.
“Clear Lam’s proprietary [shaping] technology is the product of several years of confidential research and development by Clear Lam," the suit states. "Other than as may be disclosed in published patent applications and as described herein, Clear Lam’s proprietary [shaping] technology is not known outside of Clear Lam."
It adds, “Within Clear Lam, it is disclosed only to key personnel who have a need to know. Clear Lam does not disclose technical information relating to its [shaping] technology without requiring the recipient to agree to maintain the confidentiality of the information.”
The company argues it made some specifications of the lighter, more transportable and stackable packaging available to Frito-Lay in the hopes it could secure a contract with the snack wholesaler. The talks began in 2008, according to the suit, and continued on and off through 2010 and beyond.
“The 2008 Confidentiality Agreement terminated by its own terms on January 1, 2011, but Frito-Lay’s confidentiality and non-use obligations were not affected by the termination of the Agreement,” the suit states. “After the 2008 Confidentiality Agreement terminated, Frito-Lay continued to seek confidential and proprietary trade secret information from Clear Lam under the guise of evaluating whether to buy the right to use the PrimaPak technology.”
Clear Lam claims it sought and obtained another confidentiality agreement with Frito-Lay in 2011. As was the case with the first, it stipulated Frito-Lay could only use the confidential information for the purpose of evaluating whether it would enter into a contract with Clear Lam to use the technology.
Throughout 2012, the suit alleges Frito-Lay employees spoke with Clear Lam employees on multiple occasions asking about the packaging.
“I know I’m asking questions that you’re not going to want to get into detail for, but I will anyways…” one email from a Frito-Lay employee to a member of Clear Lam’s marketing team read, ending with a smiley-face emoticon.
The e-mail went on to ask about “how PrimaPak System can work with an existing vertical form-fill-seal machine such as Frito-Lay uses," according to the suit.
In October of 2013, Clear Lam contends it learned of the "Gamer Pack" promotion, and that Frito-Lay claimed the technology was its own in a Nov. 14, 2013 article in Packaging World, a trade journal about the packaging industry.
Frito-Lay is facing allegations from Clear Lam of violating the 2008 and 2011 confidentiality agreements, false advertising under the Lanham Act and violating the Illinois Trade Secrets Act.
The packaging company, in its suit, asked the court to issue an injunction to stop Frito-Lay from further violations and to award damages and attorney’s fees.
The plaintiff company is being represented by Caesar A. Tabet, Daniel I. Konieczny and Timothy A. Hudson of Tabet DiVito & Rothstein LLC.