Meaning
Statutory frameworks governing the ownership and retention of manufacturing moulds protect toolmakers from non-payment by custom injection moulders. Under the Illinois special tool lien act, a toolmaker can establish a legal claim against the physical moulds they fabricate or modify. This right ensures that the tool remains in the possession of the fabricator or allows them to seize the mould if the customer fails to pay for the work performed.
Possessory Lien
Retaining physical possession of the injection mould is the primary method of enforcing a claim under this statute. If the moulder or the end customer defaults on their payments, the toolmaker can refuse to release the tool, effectively halting the production of plastic parts. This leverage is particularly effective when the mould is designed for high-volume automotive or medical applications where daily downtime is measured in thousands of dollars.
Mould Custody
Legal possession of the tool can be maintained even after it has been delivered to the customer, provided specific filing requirements are met. The toolmaker must record a financing statement or send a formal notice to the customer detailing the amount due and the intent to enforce the lien. This step is critical because once the mould begins running production parts, the physical custody has shifted to the moulder, and the toolmaker must rely on these statutory filings to assert their rights.
If the filings are not completed within the strict timelines set by the state, the toolmaker risks losing their secured status to other creditors who hold broader blanket liens on the moulder’s assets.
Commercial Enforcement
Selling the mould at a public or private auction is the final recourse if the debt remains unpaid after the statutory notice period. Before this sale can occur, the toolmaker must notify all secured creditors and the customer, allowing them a final opportunity to cure the default. The proceeds of the sale are used to cover the outstanding fabrication costs, with any excess funds returned to the debtor or junior lienholders.
