It's been a year-long course in Patents 101 for Miami entrepreneur Christopher Descalzo.
The aromatic cedar boxes that have traditionally housed premium cigars hadn't been improved on in some 150 years. So, in 1996, Descalzo invented a wooden box with a transparent Plexiglas top to house his Escudo Cubano and El Sabinar brand cigars. That same year he applied for a patent on the design.
"The Plexiglas top served a very good purpose," says Descalzo. "The consumer could see the product and didn't have to open the box to inspect the condition of the cigars. I immediately experienced tremendous acceptance from retailers and consumers alike. We went from zero to $2 million in sales the first year--90 percent of our success was due to the box."
But there was an unfortunate byproduct: The box spawned a copycat effect within the industry. Descalzo soon found his attention-grabbing cigar box design was being used by 18 to 20 other cigar companies. In addition, as new cigar makers flooded the market and supply overtook demand, Descalzo says, "Smaller companies such as ourselves [absorbed] a disproportionate amount of lost sales." After watching his sales drop to $500,000 last year, Descalzo is trying to stay optimistic: "We're blessed that we're still in business."
Sure, Descalzo acknowledges there was a contraction in the overall market, but he can't help but speculate that the loss of his unique marketing edge was a major contributing factor to his sales decrease. Notified in September 1998 that his patent had been approved, "I was elated," says Descalzo. But as his attorneys told 15 offending cigar markers they had 10 days to cease and desist, the copycat cigar boxes--all of them--remained on the market. "The patent is a nice thing to hang on your wall," Descalzo says, "but you still have to protect your rights." That protection may only come as the result of an estimated three to five years of litigation.
But Descalzo isn't giving up. "If you succeed in validating one case in court," he says, "there's the likelihood that the others will cease and settle. I may win the war with just one battle."