CITY NEWS SERVICE
A $2 pen is at the heart of a multimillion-dollar legal dispute — which went before a Los Angeles jury Tuesday — concerning the marketing of the writing instrument in the U.S. and who should get the financial reward for its success.
The pen is touted by its maker, Pentel, for its waterproof, fade-resistant ink as well as its “super smooth writing.” However, “smooth” does not describe the once-promising relationship between Torrance-based Pentel of America Ltd. and El Segundo ad agency Concept Chaser Co. Inc.
In a suit filed in Los Angeles Superior Court in December 2009, Concept Chaser maintains that Pentel of America and its parent firm, Tokyo-based Pentel Co. Ltd., stole the firm’s idea to target college students as a way of marketing the HyperG in the U.S. and to hold a contest to come up with the best promotional slogan.
Both sides even disagree concerning how the ink on their November 2007 contract binds each party. Concept Chaser maintains Pentel committed to paying the firm for sales ideas it developed for the HyperG, while the pen-makers say the other side did not come through as promised to pitch the writing utensil to working professionals.
In his opening statement, attorney Michael Alder, on behalf of the ad agency, said Pentel went so far as to even award a trip to Panama City, Fla., and an Apple product to the winner of its “smoothest-line” contest — exactly what Concept Chaser proposed in meetings with Pentel officials in November 2007.
“This company lied and they’re going to lie to you in court,” Alder told jurors. “They stole this idea, which we think is crystal clear.”
Alder said Concept Chaser should be awarded compensatory damages of more than $240 million for alleged breach-of-contract and unspecified punitive damages for alleged fraud.
Defense attorney Grant Nigolian countered that Pentel has longed focused its product marketing campaign on young people, including college students.
He said Pentel representatives ultimately were not impressed with the proposal pitched by Concept Chaser, including its high costs.
Nigolian said Pentel executives told their Concept Chaser counterparts, “We don’t have a budget for what you want.”
“It was a diplomatic way of saying, `Thanks, but no thanks,”’ he said.
Pentel did not breach its contract with Concept Chaser because the U.S. marketing plan was developed internally, Nigolian said.
But Alder maintained that Pentel officials would not have achieved the success they did without the help of Concept Chaser.
“They had a problem, they had to figure out how to market this pen in the United States,” Alder said.
Concept Chaser President Yoshi Hayakawa and his wife, company Vice President Clara Goh Hayakawa, had the foresight to know that Pentel’s original plan to promote the HyperG to professional workers such as doctors and attorneys would fail and that college students would be the best potential customers, Alder said.
According to Alder, Pentel’s obligations to Concept Chaser are all spelled out in the contract.
“In the advertising business, ideas are currency,” Alder said. “When you break that contract, you have to pay for it.”