ITC to investigate Chinese crane manufacturer over patent infringement

The International Trade Commission (ITC) has launched an investigation into Chinese machinery manufacturer Sany over claims of patent infringement.

The investigation, launched by the US-based agency this month, is based on a complaint against Sany from Wisconsin based crane manufacturer, Manitowoc Cranes LLC.

A statement published on the ITC website on July 11 said the complainant has alleged that Sany imported and sold crawler cranes and components that infringe its patents, adding that trade secrets violations had also occurred.

Manitowoc claims the designs for the cranes were passed on to Sany by a former employee.

According to Smith Brittingham, partner at Finnegan Henderson Farabow Garrett & Dunner LLP, in Washington DC, the addition of trade secrets allegations could make the case harder to settle.

“It’s really speculation at this stage as to who is in the wrong, but one thing you can see from the complaint, which is not always present, are trade secret allegations. That sometimes adds an emotional component to a case and makes it harder to settle,” he said.

Rory Radding, partner at Edwards Wildman Palmer LLP in New York and chair of the firm’s ITC practice group, said there were similarities to a trade secrets case at the ITC in 2011 involving Chinese company TianRui (TianRui Group Co v ITC).

TianRui was accused of using trade secrets belonging to American company Amstead Industries, which had factories in China, for cast steel railway wheels. The wheels were subsequently imported and used in the US.

"In this case it sounds like a former employee of Manitowoc who is now working for Sany as a designer has allegedly revealed trade secrets and Sany has come out with a machine that may be similar to one of Manitowoc’s and may infringe its patents,” Radding told WIPR.

“The TianRui case also had to prove that trade secrets had been used for Amstead's railway wheels which had been obtained in China. The wheels came to the US and the ITC ruled that the importation of goods should be excluded because of the misappropriation of trade secrets in China.”

Based in Changsha in Hunan Province, Sany also has manufacturing offices in the US, Germany and India and Brittingham suggested Manitowoc may be trying to exclude it from the market.

“Chinese companies are becoming more and more prevalent outside of China and have shifted from just servicing Asian markets to selling products in the US – as they grow they have become significant competitors and sell sophisticated goods, so it is natural for those companies to be accused,” he said.

The ITC added in its statement that it would make a final determination in the investigation and would set a target for completing the investigation within 45 days.

Sany was not immediately available for comment.