From Detroit Free Press
SOUTHFIELD, MI — Collins & Aikman Corp., once a Fortune 500 auto supplier, is expected to officially go out of business this week. What will remain, even after the company ceases to exist, are nearly 400 patents that a small staff will try to sell.
The patents primarily relate to vehicle interior components, such as dashboards, consoles and cupholders. They come from the company’s plastics business, a segment that the Southfield, MI-based supplier couldn’t sell during its two-and-a-half years in bankruptcy.
C&A filed for Chapter 11 bankruptcy protection in May 2005, after racking up debt on acquisitions, amid mounting losses and an accounting scandal that in March resulted in the indictment of former CEO David Stockman. Stockman, who was fired six days before the bankruptcy filing, has been accused of lying and committing bank fraud.
After the company goes out of business, C&A’s Vice President of Research and Development Jim Dowd, along with consultants and a few C&A employees, will stay on to find buyers and licensees to use its technology. Any money that comes from the patents would go to creditors.
"We were a market leader in many of the products that we made," Dowd said. "There is an opportunity now as this all unfolds for emerging companies."
The patents account for about $150 million the company spent in the last decade on new technology. Dowd wouldn’t give an estimate on how much the company hopes to get from the sale. "It will be sold at a substantially discounted price," he said.
Of the patents for sale, more than half are for technology that hasn’t made it into vehicles yet. One design that came from focus groups with women and young people: a removable cooler and briefcase-like compartments for the center console that also can be placed in the trunk. It also has designed denim, fabric and leather looks for the dashboards, as well as attachments for the interior so drivers decide where to place a cupholder or sunglass holder.
"It’s going to have to provide some true market differentiation that would ultimately give an interiors supplier some sort of competitive advantage," said Erich Merkle, an analyst with Grand Rapids, MI-based IRN Inc.
C&A is marketing the patents to companies in Michigan and those considering Michigan. Weston Anson, one of its patent consultants, also is planning a marketing trip to China.
Along with the product patent comes other information such as books of data and testing, where to buy materials and in some cases the tools to make prototypes, said Gabe Fried, another patent consultant working for C&A.
"There’s a lot of value here," Fried said. "It’s just a question of getting it into the hands of the right people."
