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Updated: Schad, Husky trade barbs in battle over tribal-owned molder, IP infringement

A lawsuit between Husky Injection Molding Systems and its former founder, Robert Schad, regarding his work with Italian bottle blowmolding and filling equipment supplier SIPA, has ensnared a First Nations-owned injection molder and moldmaker founded in 1999 as a partnership between the Moose Deer Point tribe and Schad.

PlasticsToday Staff

August 7, 2013

3 Min Read
Updated: Schad, Husky trade barbs in battle over tribal-owned molder, IP infringement

According to a Globe and Mail article published on August 6, the Schad/Moose Deer Point venture, Niigon Technologies, is effectively being forced to close after Husky said it would pull machines from the plant that it had leased or loaned to the operation.

In the Globe and Mail article, Schad characterized Husky's decision as revenge, saying, "Husky is getting back at me." In a statement given to PlasticsToday, the Bolton, ON supplier of injection molding machines, molds and hot runners disputed that characterization, saying its current litigation with Schad and SIPA, also includes Niigon and Schad's new machine venture, Athena:

Every day, people at Husky invest their time, intellect and creativity to develop innovative ways of delivering value to our customers. We are committed to protecting these investments and ensuring that any rewards and customer value that result from our inventions and knowledge stay within the Husky team. Husky is currently in legal proceedings with Robert Shad, Athena, SIPA and others regarding Husky's confidential and proprietary information. That litigation includes the issue of Niigon. Husky has provided significant financial and technical support to Niigon over many years and regrets that its relationship with Niigon has ended in these circumstances. As this matter is now before the court, we cannot provide any further comment.

Schad responds
In a two-page written statement provided to PlasticsToday, Schad laid out his involvement with the Niigon project, starting in 2000 when he was still the controlling shareholder of Husky, until December 18, 2012, when the Athena and SIPA partnership was announced, after which, he says Husky filed suit and demanded that Niigon return the Husky machines it had been using. Schad emphasized that all investments in Niigon were made through his charity, The Schad Foundation, including $8 million from 2000 to 2007, while he led Husky, and a further $20 million, since he sold his stake.

Schad said his initial involvement with the Moose Deer Point community came about by accident—he had a cottage in the area and members of the Moose Dear Point First Nation helped him with a broken vehicle—but from the start he saw the collaboration as mutually beneficial to the econcomically challenged community and Husky. "I also envisioned that Niigon would be a demonstration facility for Husky," Schad said, "where customers and potential customers could see Husky machines in production."

Over the years, the collaboration involved the loaning, leasing, and sale of Husky machines to Niigon, with those transactions undertaken on what Schad described as "favorable terms." Schad said that of the loaned machines, all but one were returned by 2008 and replaced by machines that were leased under a new arrangement.

Schad said that when Husky demanded the return of its equipment in a formal letter on Jan. 18, 2013, there were seven machines at Niigon. Three of those were leased, one was on loan going back to 2004, and three were owned by Niigon or Niigon customers.

"My reaction was that Husky was getting back at me by taking out on the Moose Deer Point First Nation community its outrage over Athena's partnership with SIPA," Schad said in the statement, adding that he thought this was "unfair"  since Niigon "had nothing to do with the SIPA/Athena partnership," a point that Husky differs on.

The way forward
At this point, Schad said his foundation and the provincial and federal governments of the Moose Deer Point First Nation are working to minimze the shutdown's impact. Schad said his foundation is funding "a large portion" of the $4 million in costs associated with the plant closure, including severance payments for the 22 individuals that are losing their jobs.

"It is hard for me to understand," Schad said, "but perhaps it is because [Husky] knew the importance of Niigon to me personally."

According to Industry Canada, Niigon, which is located in Mactier, ON, employs 25. The ISO 9001 operation provides contract injection molding and assembly for a variety of markets, including electronics, electrical, medical, and environmental.

PlasticsToday profiled Schad's efforts with Niigon and Athena in this November 2011 story. More recently, PlasticsToday visited the Athena operation during a June open house.

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