Diversified conglomerate 3M Company MMM recently filed a legal suit against Texas-based XPEL Technologies Corporation in the federal district court in Minnesota for an alleged breach in its patent rights. XPEL is one of the leading suppliers of automotive paint and headlamp protection films with over 70,000 vehicle-specific applications.
The lawsuit alleged that XPEL infringed upon 3M’s patented rights in its XPF paint protection film. Per U.S. Patent No. 8,765,263, 3M reportedly has exclusive patents for developing paint protection film products. These products are used for protecting the polish and the finish of vehicles from scratches, stains, bug acids and rock chips.
In its reply, XPEL proclaimed that it was not served any prior notice of the allegations before the filing of the legal suit and would vigorously defend its case in the court.
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 (OEM) 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.
Going forward, portfolio management, investment in innovation and business transformation are the three key levers on which 3M intends to focus on in order to gain a competitive advantage in the industry. 3M also intends to continue investing in capital expenditures and research and development to support organic growth. It also aims at a prudent capital structure strategy and increased capital deployment. 3M's global footprint, diversified product portfolio and the ability to penetrate into different markets have been its forte.
3M currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include EnPro Industries, Inc. NPO, Federal Signal Corp. FSS and Graham Corporation GHM, each carrying a Zacks Rank #2 (Buy).
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