Kimberly-Clark sues Taiwan firm over diapers

Kimberly-Clark Philippines Inc. (KCPI) is suing Taiwanese diaper giant Everbeauty Houseware Co. Ltd. and its Philippine distributors for infringement of patent for the Huggies line of disposable diapers, and is asking the courts to order the seizure and destruction of Sealer Wiz and ProKids disposable diapers.

In a petition filed before the Makati Regional Trial Court, KCPI asked for the issuance of a temporary restraining order and the subsequent grant of a writ of injunction against the sale and distribution of the popular Sealer and ProKids brand of disposable diapers.

According to KCPI senior vice president and treasurer Leonilo Alfonso, EHCL copied the design of its Huggies disposable diaper and used the combination of features, including the so-called containment flaps in its Sealer and ProKids brand.

In its petition, KCPI said it suffered P667.48 million in opportunity losses, lost production days and unrealized profits. The company is suing EHCL for P110 million in actual damages or unrealized profits, P1.5 million in litigation costs and P10 million in exemplary damages.

Although the company’s market share has not declined due to the rapid increase in the local market for disposable diapers, Alfonso said KCPI had been forced to shut down one of its manufacturing lines intermittently and operate under its total rated capacity.

Alfonso said KCPI decided to add a third manufacturing line in 1997 in anticipation of the rapid growth of the demand for disposable diapers. However, with Sealer Wiz and ProKids eating into its projected market share, the expansion of its Laguna facility has been virtually useless.

Alfonso explained that the design of Huggies diapers is covered by the Enloe Patent which includes the use of containment or barrier flaps, a feature that improved the performance of the diaper by reducing side leakage.

The design was invented by Kenneth Maynard Enloe and is described in the patent as a "unitary disposable diaper with elasticized legs having a fluid pervious liner, a fluid impervious backing with absorbent material positioned between; with a fecal containment flap positioned along the side of the diaper extending inward from the lateral edges."

Alfonso explained that the patent was owned by Kimberly-Clark Worldwide Inc. and licensed to KCPI. EHCL’s use of the features, he said, was a violation of Philippine patent laws.