BusinessTN

When brothers David and Joe Miceli moved their families from California to Tennessee in 1992 to start Tri State Distribution, they had no idea what the future would bring. Setting up shop in a 3,000-square-foot building in Spencer, they purchased prescription vials in bulk from manufacturers and distributed the containers to local pharmacies. "We had some success and decided that since manufacturers weren't interested in the ideas we were coming up with, we'd start manufacturing our own containers," David Miceli says. "In America, if you can't join them, you have to beat them."

In 1998, the brothers opened an 8,000-square-foot manufacturing facility in Sparta. They hired six employees, purchased two presses and slept in cots at the plant for three months to get the operation running. Today, with 250 employees, 28 presses and 255,000 square feet, Tri State Distribution is one of the largest manufacturers of prescription pill packages in the world. "The Micelis are two of the most amazing guys I've ever met," says Jack Waddey, founding partner of Nashville-based intellectual property law firm Waddey and Patterson. "In 15 years, they've developed, through their ingenuity, a production machine that's unrivaled, and they do most everything in house."

With success, though, comes big business problems, the biggest being patent infringement. "You scratch and claw to get to the next level, and pretty soon, you represent a threat to the big companies that used to ignore you," Miceli says. "When they realize they can't outthink you, they try to compete by crushing you. If you have a product that disrupts the market, they just steal it, and you have to take these huge companies with deep pockets and staff attorneys to court."

But imitation, says Waddey, who has successfully represented Tri State in several patent actions, is the highest form of flattery. And by those standards, both Waddey and Miceli agree that Tri State has been "flattered and flattered and flattered." Nonetheless, Waddey stresses that the pair provides an example of how the system can be beneficial to business owners.

They're aggressive in patenting every aspect of their products and don't leave any holes for the competition," Waddey says. "It can be expensive, but not having patents can be more expensive."

Miceli says Tri State's goal is to continue to find economical ways to create products that not only allow patients to store their medication properly, but also cut costs for patients and pharmacies. No doubt their larger competitors will be watching closely.