Popular Wrench Fights a Chinese Rival
SHAILA DEWAN
November 8, 2012
November 8, 2012
Last Christmas, Sears had a brisk seller in the Bionic Wrench, an award-winning, patented tool with spiffy lime green accents. This holiday season, though, Sears has a special display for its own wrench, in the red and black colors of its house brand, Craftsman.
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One customer who recently spotted the new Craftsman tool, called the Max Axess wrench, thought it was an obvious knockoff, right down to the try-me packaging. “I saw it and I said, ‘This is a Bionic Wrench,’ ” recalled Dana Craig, a retiree and tool enthusiast in Massachusetts who alerted the maker of the Bionic Wrench. “It’s a very distinctive tool,” he added.
The tools have one significant difference, Mr. Craig noted. The Bionic Wrench is made in the United States. The Max Axess wrench is made in China. Still, the inventor of the Bionic Wrench is determined to fight. He is Dan Brown, an industrial designer in Chicago who came up with the wrench after watching his son try to work on a lawn mower. Mr. Brown says he believes that the Max Axess wrench copies his own and he is planning to file suit against Sears, which declined to answer any questions about the wrenches for this article. |
John Gress for The New York Times | Dan Brown, inventor of the Bionic Wrench, is defending his patent rights against the Max Axess, made in China.
William P. O’Donnell/The New York Times | The Bionic Wrench is made in America by Penn United Technologies. Sears sells the Max Axess, sourced from China.
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The Bionic Wrench is distinguished by its gripping mechanism, a circle of metal prongs that, inspired by the shutter in a single-lens reflex camera, descend evenly to lock onto almost any nut or bolt.
Since Sears has halted new orders, the Pennsylvania company that makes the Bionic Wrench has had to lay off 31 workers, said Keith Hammer, the project manager at the company, Penn United Technologies. “And that’s not to mention our suppliers,” he added.
Mr. Brown sees a broader issue than just the fate of his wrench. “Our situation is an example of why we’re not getting jobs out of innovation,” he said. “When people get the innovation, they go right offshore. What happened to me is what happened to so many people so many times, and we just don’t talk about it.”
Inventors typically spend $10,000 to $50,000 to obtain the type of patent Mr. Brown has on the wrench, said John S. Pratt, a patent expert at Kilpatrick Townsend & Stockton in Atlanta. Though he said he could not comment on the merits of Mr. Brown’s potential suit, patent infringement cases can be especially difficult in the tool field, where many improvements are incremental, Mr. Pratt explained.
A defendant in such a case would most likely argue that either the tool did not warrant a patent in the first place, or that its own product did not violate the patent.
The fact that Sears made some changes to the wrench’s design, like making the grooves that allow the metal prongs to slide back and forth visible instead of hidden, will make the case more challenging, he said. “It’s hard for me to imagine that Sears isn’t particularly careful about breach of patent, so there’s probably another side to the story,” he said.
After patenting the wrench in 2005, Mr. Brown formed a company, LoggerHead Tools, to bring it to market, making a point of having it made in the United States.
The Bionic Wrench was greeted with enthusiasm at trade shows and in industrial design competitions, and the company survived the downturn in 2008. Mr. Brown resisted overtures from large chain stores that wanted to sell the tool under their proprietary brand, he said, and rejected the lure of cheaper manufacturing in China. “I was raised a different way,” he said.
The tool sold fairly well on its own — LoggerHead has shipped 1.75 million of them — but Mr. Brown, 56, who teaches industrial design at Northwestern University, says LoggerHead operated on a shoestring and he plowed much of the profit back into the company. “You cannot have big offices and fancy cars and everybody with an administrative assistant, because we are competing with China,” he said.
In 2009, LoggerHead hit pay dirt when Sears agreed to do a test sale. The product sold out, Mr. Brown said, and Sears ordered 75,000 Bionic Wrenches the next year. In exchange Mr. Brown agreed not to sell the wrench to Sears’s competitors, including Home Depot and Lowe’s.
In 2011, sales at Sears increased again, far outpacing LoggerHead’s other outlets like the QVC shopping channel and smaller hardware stores. But LoggerHead’s profit margin remained small, in part because it produced a television commercial and paid Sears to show it.
The Sears Holdings Company, which owns the Craftsman brand, declined multiple requests to comment on the Bionic Wrench or the Max Axess Wrench. The company would not answer questions about patent infringement or the volume of sales.
But in a string of e-mails provided by Mr. Brown, the buyer at Sears who had the LoggerHead account wrote, making liberal use of exclamation points, that the wrench’s holiday sales last year exceeded its target by 23 percent.
In the manufacturing world, lead time can determine price, and from the beginning cost was a particular issue for the Bionic Wrench, because of the competition from China. A 2006 article in The Wall Street Journal was headlined, “Wrench Wins Awards, but Is It Priced Too High to Be a Hit?”
According to Mr. Brown’s account of his dealings with Sears, the chain was pleased with the tool’s performance and agreed to place an order for 2012 in plenty of time to keep the cost low. Then his buyer at Sears changed and that agreement seemed to get lost in a new round of haggling. When the order for Father’s Day
finally cam
e, Mr. Brown said, it was too late to guarantee the lower price. He refused the order.
Sears responded by agreeing to the higher price. But when it came time for the Christmas holiday order, negotiations stalled once more, again pushing LoggerHead past the deadline to get the best price, according to Mr. Brown.
“We were sitting there going, ‘Why do they want Father’s Day so bad but they won’t commit for Christmas?’ ” Mr. Brown said. Now he believes that the company had already placed its order for the Craftsman version.
In late September, Mr. Brown said, his suspicions were confirmed. LoggerHead got a “customer feedback” e-mail from Mr. Craig, the tool connoisseur, describing the new Max Axess wrenches. “Sadly, they are made in China,” Mr. Craig wrote. “Can you tell me if LoggerHead has authorized these?”
Craftsman has come under fire before, accused of misleading customers into thinking that its tools are made in America and for stealing intellectual property. In one case, Sears spent two decades defending itself against a claim by Peter M. Roberts, who as a young Sears employee had, on his own time, invented a type of socket wrench.
Mr. Roberts told the court that Sears had played down the value of his invention, paid him $10,000 for the rights, and then made tens of millions of dollars. He eventually received settlements of less than $10 million, according to news reports.
In another, more recent case led by Lee Grossman, Mr. Brown’s lawyer, a judge awarded $25 million to the maker of a tool called the Rotozip who said he had disclosed trade secrets to Sears in an attempt to get the store to carry a new version of the tool.
Sears, a jury decided, took the trade secrets and had the tool made abroad for Craftsman.
“You have LoggerHead out, Dan Brown out, and dozens of American workers laid off — all in the name of profits for Sears,” Mr. Grossman said.
LoggerHead’s lawsuit, Mr. Brown said, will most likely include claims that Sears interfered with the company’s ability to do business with other stores.
“I’m in favor of free trade,” Mr. Brown said. “The person who’s out-innovated loses. But it’s destructive when someone competes but doesn’t out-innovate, they just produce it in a different market without regard to safety codes and human conditions.”
The company that makes the Max Axess wrench and other tools for Craftsman, the Apex Tool Group, is being acquired by Bain Capital, the company founded by Mitt Romney, in a $1.6 billion deal.
Throughout the presidential campaign, Bain was criticized on the grounds that it encouraged outsourcing by companies it buys at the expense of American workers. Apex makes many of its tools overseas. A company spokesman referred all questions to Sears.
Mr. Brown and his lawyer say they believe they have a solid case against Sears, but it could take years to litigate. “What happens to us in the meantime?” Mr. Brown asked.
Mr. Brown is also concerned that while he fights in court, Sears can undercut the price of his wrench.
For now at least, Sears still has some of Mr. Brown’s wrenches in its inventory. On the Sears Web site, the Craftsman and the LoggerHead wrenches are listed at the same regular price, $24.99 for the 8-inch version, and today both are on sale. But for at least a few days in recent weeks, only the Craftsman version was on sale, for $19.99.
Since Sears has halted new orders, the Pennsylvania company that makes the Bionic Wrench has had to lay off 31 workers, said Keith Hammer, the project manager at the company, Penn United Technologies. “And that’s not to mention our suppliers,” he added.
Mr. Brown sees a broader issue than just the fate of his wrench. “Our situation is an example of why we’re not getting jobs out of innovation,” he said. “When people get the innovation, they go right offshore. What happened to me is what happened to so many people so many times, and we just don’t talk about it.”
Inventors typically spend $10,000 to $50,000 to obtain the type of patent Mr. Brown has on the wrench, said John S. Pratt, a patent expert at Kilpatrick Townsend & Stockton in Atlanta. Though he said he could not comment on the merits of Mr. Brown’s potential suit, patent infringement cases can be especially difficult in the tool field, where many improvements are incremental, Mr. Pratt explained.
A defendant in such a case would most likely argue that either the tool did not warrant a patent in the first place, or that its own product did not violate the patent.
The fact that Sears made some changes to the wrench’s design, like making the grooves that allow the metal prongs to slide back and forth visible instead of hidden, will make the case more challenging, he said. “It’s hard for me to imagine that Sears isn’t particularly careful about breach of patent, so there’s probably another side to the story,” he said.
After patenting the wrench in 2005, Mr. Brown formed a company, LoggerHead Tools, to bring it to market, making a point of having it made in the United States.
The Bionic Wrench was greeted with enthusiasm at trade shows and in industrial design competitions, and the company survived the downturn in 2008. Mr. Brown resisted overtures from large chain stores that wanted to sell the tool under their proprietary brand, he said, and rejected the lure of cheaper manufacturing in China. “I was raised a different way,” he said.
The tool sold fairly well on its own — LoggerHead has shipped 1.75 million of them — but Mr. Brown, 56, who teaches industrial design at Northwestern University, says LoggerHead operated on a shoestring and he plowed much of the profit back into the company. “You cannot have big offices and fancy cars and everybody with an administrative assistant, because we are competing with China,” he said.
In 2009, LoggerHead hit pay dirt when Sears agreed to do a test sale. The product sold out, Mr. Brown said, and Sears ordered 75,000 Bionic Wrenches the next year. In exchange Mr. Brown agreed not to sell the wrench to Sears’s competitors, including Home Depot and Lowe’s.
In 2011, sales at Sears increased again, far outpacing LoggerHead’s other outlets like the QVC shopping channel and smaller hardware stores. But LoggerHead’s profit margin remained small, in part because it produced a television commercial and paid Sears to show it.
The Sears Holdings Company, which owns the Craftsman brand, declined multiple requests to comment on the Bionic Wrench or the Max Axess Wrench. The company would not answer questions about patent infringement or the volume of sales.
But in a string of e-mails provided by Mr. Brown, the buyer at Sears who had the LoggerHead account wrote, making liberal use of exclamation points, that the wrench’s holiday sales last year exceeded its target by 23 percent.
In the manufacturing world, lead time can determine price, and from the beginning cost was a particular issue for the Bionic Wrench, because of the competition from China. A 2006 article in The Wall Street Journal was headlined, “Wrench Wins Awards, but Is It Priced Too High to Be a Hit?”
According to Mr. Brown’s account of his dealings with Sears, the chain was pleased with the tool’s performance and agreed to place an order for 2012 in plenty of time to keep the cost low. Then his buyer at Sears changed and that agreement seemed to get lost in a new round of haggling. When the order for Father’s Day
finally cam
e, Mr. Brown said, it was too late to guarantee the lower price. He refused the order.
Sears responded by agreeing to the higher price. But when it came time for the Christmas holiday order, negotiations stalled once more, again pushing LoggerHead past the deadline to get the best price, according to Mr. Brown.
“We were sitting there going, ‘Why do they want Father’s Day so bad but they won’t commit for Christmas?’ ” Mr. Brown said. Now he believes that the company had already placed its order for the Craftsman version.
In late September, Mr. Brown said, his suspicions were confirmed. LoggerHead got a “customer feedback” e-mail from Mr. Craig, the tool connoisseur, describing the new Max Axess wrenches. “Sadly, they are made in China,” Mr. Craig wrote. “Can you tell me if LoggerHead has authorized these?”
Craftsman has come under fire before, accused of misleading customers into thinking that its tools are made in America and for stealing intellectual property. In one case, Sears spent two decades defending itself against a claim by Peter M. Roberts, who as a young Sears employee had, on his own time, invented a type of socket wrench.
Mr. Roberts told the court that Sears had played down the value of his invention, paid him $10,000 for the rights, and then made tens of millions of dollars. He eventually received settlements of less than $10 million, according to news reports.
In another, more recent case led by Lee Grossman, Mr. Brown’s lawyer, a judge awarded $25 million to the maker of a tool called the Rotozip who said he had disclosed trade secrets to Sears in an attempt to get the store to carry a new version of the tool.
Sears, a jury decided, took the trade secrets and had the tool made abroad for Craftsman.
“You have LoggerHead out, Dan Brown out, and dozens of American workers laid off — all in the name of profits for Sears,” Mr. Grossman said.
LoggerHead’s lawsuit, Mr. Brown said, will most likely include claims that Sears interfered with the company’s ability to do business with other stores.
“I’m in favor of free trade,” Mr. Brown said. “The person who’s out-innovated loses. But it’s destructive when someone competes but doesn’t out-innovate, they just produce it in a different market without regard to safety codes and human conditions.”
The company that makes the Max Axess wrench and other tools for Craftsman, the Apex Tool Group, is being acquired by Bain Capital, the company founded by Mitt Romney, in a $1.6 billion deal.
Throughout the presidential campaign, Bain was criticized on the grounds that it encouraged outsourcing by companies it buys at the expense of American workers. Apex makes many of its tools overseas. A company spokesman referred all questions to Sears.
Mr. Brown and his lawyer say they believe they have a solid case against Sears, but it could take years to litigate. “What happens to us in the meantime?” Mr. Brown asked.
Mr. Brown is also concerned that while he fights in court, Sears can undercut the price of his wrench.
For now at least, Sears still has some of Mr. Brown’s wrenches in its inventory. On the Sears Web site, the Craftsman and the LoggerHead wrenches are listed at the same regular price, $24.99 for the 8-inch version, and today both are on sale. But for at least a few days in recent weeks, only the Craftsman version was on sale, for $19.99.
A version of this article appeared in print on November 9, 2012, on page B1 of the New York edition with the headline: An Innovator vs. a Follower.
SOURCE: The New York Times
This is another reason why i dont like sears. There in it for the money they dont care about the little guy. they well screw them and the rest of America over just to make that dollar. Sears tools have gone down hill for a long time. I remember when all my friends dads had craftsmans tools in there garages but not anymore / Its Snap on. Mac and a few others now. Craftsman had done shot themselfs in the foot and over all Sears is a place that a lot of people dont shop there anymore. they never have the parts you need and the people who work there are there just for a paycheck thay dont know about what they sale. i dont know how many time i have been there and couldnt get any help. I well never buy anything with the name sears or craftsman on it again.
GET ANGRY at this injustice! Write the CEO of SEARS and tell him you will NOT patronize SEARS tool purchases until they commit to having all their CRAFTSMAN tools made in the USA!
Only with a pile of letters and bad publicity will their senior management possibly wisen up and realize they have a responsibility, as an American company, to help strengthen the domestic US economy – – – and NOT the economy of China or any other foreign company.
It’s a waste of time to write Sears, they have been doing this for years. Years ago I ordered their best 1/2″ industrial drill (and it wasan’t cheap) — my previous one had lasted a long time and was USA made. When the new one showed up it was made in Taiwan – I felt like vomiting.
A couple of years later I was a manager at the Litton microwave plant in Sioux Falls SD and our biggest customer was Sears, selling them under the Kenmore name and trim. All of a sudden they cancelled our order – causing mass lay offs, the eventual closing of the Sioux Falls factory and the component factory in Minneapolis – about 4000 jobs all told plus countless smaller suppliers.
They had switched their production to Korea – we offered to match the (Korean) price or even beat it a bit and they refused to give usw any orders, saying they wanted to source everything from a single (Korean!) supplier.
Meanwhile the consumers never knew what happened, the microwaves looked just the same but one day they were made in the USA heartland and the next in Korea. This was in the late 80’s. At about the same time they closed their store on East 10th in Sioux Falls and laid off all the old pros in the tool department and offered them jobs as part timers at the new store in the Mall Complex (according to what one of them I knew from being a frequent tool buyer back then) on 41st. street.
I have Hated Sears for years and I haven’t bought anything from them in 20 years and I never will.
I buy American Made – Wright Tools, Kenendy tool boxes, Klein, etc.
I heard Sears is struggling – I hope I live to see the day they fail.
sears is making lots of craftman tools in china,they are garbage bought a hedge pruner broke in 5 minutes brought it back it was made in china.they use to call there china goods companoin brand ive changed to channel lock there made here,the salesman in sears said he hears lots of complaints.i dont shop sears anymore ,zero mens or womens clothing made in usa zero beding towels,small apliances,sears in an anti usa store