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3M Enforces Patent Rights, Wins Suit Against Chinese Firm


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Diversified conglomerate 3M Company (MMM - Analyst Report) has over 105,000 patents in various categories across its product portfolio. Over the years, the company has successfully enforced its patent rights and filed legal suits against firms that infringed them.

The latest of such litigations is a patent infringement suit against China-based Qingdao Summit Industrial Co., Ltd. The infringed European patent EP 0,954,381 B2 relates to 3M’s PPS technology that facilitates the efficient mixing and spraying of coatings for automotive collision repair.

With over 1,000 different paint products for various interior and exterior applications, 3M offers numerous paint protection film products to the automotive industry. These products form an integral part of its Industrial segment, which serves a broad range of markets, such as, automotive original equipment manufacturer and automotive aftermarket (auto body shops and retail), electronics, appliance, paper and printing, packaging, food and beverage, and construction.

The products from this segment include tapes, a wide variety of abrasives, adhesives, advanced ceramics, sealants, specialty materials, filtration products, closure systems for personal hygiene products, acoustic systems products, and components and products that are used in the manufacture, repair and maintenance of automotive, marine, aircraft and specialty vehicles.

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3M recently got a favorable verdict from the District Court of Frankfurt, Germany, against a purported patent infringement by Qingdao Summit Industrial Co., Ltd. The verdict ruled in favor of 3M and prohibited the sale of the disputed paint spray gun cup sets in Germany by the Chinese firm with immediate effect. At the same time, the court directed the alleged offender to reimburse the litigation costs to 3M, although giving it an opportunity to appeal against the verdict to the Upper District Court of Frankfurt.

The Automotive Aftermarket Division of 3M offers a comprehensive portfolio of products and solutions for the collision repair industry. Based on the indigenous PPS technology, these products enable less paint wastages as painters mix the optimum paint with solvent for an effective cleanup procedure. The 3M PPS System is a disposable mixing and filtering system that eliminates the need for separate mixing cups and filters. In addition, only the spray gun channel and adapter need cleaning since the paint never comes into contact with the pot and collar. A range of threaded adapters for different spray guns provide painters with the ability to attach the 3M system to any spray gun.

This revolutionary technology has reportedly led to about 70% reduction in the use of cleaning solvents, which translates to a reduction of an estimated 46.2 million gallons of solvents. Consequently, global VOC (volatile organic compound) emissions are reduced, thereby promoting a safer and healthier workplace since operators are exposed to smaller amounts of solvent vapors. These eventually translated to more than $330 million in solvent cost and solvent disposal cost savings over the past decade.

Furthermore, the PPS system allows operators to mix smaller quantities of paint or to easily switch colors between repairs without disposing of the paint. This can help reduce the amount of paint required for a job by as much as 2–4 ounces per mix, leading to significant cost and waste reductions.

3M operates in the Diversified Operations industry. Some other leading players in this space include General Electric Company (GE - Analyst Report) , Honeywell International Inc. (HON - Analyst Report) and United Technologies Corporation (UTX - Analyst Report) .

With long-term earnings growth expectations of 10.5%, General Electric is a star performer in the industry. The stock has a solid earnings history, beating earnings estimates thrice in the trailing four quarters.

Honeywell has a long-term earnings growth expectation of 9.8%. The stock has a positive earnings history, beating earnings estimates thrice in the trailing four quarters.

United Technologies has a long-term earnings growth expectation of 8.7%. The stock has a modest earnings history, beating earnings estimates in each the trailing four quarters.

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