The International Trade Commission (ITC) issued a Limited Exclusion Order (LEO) excluding imported crawler cranes from Chinese manufacturer Sany Heavy Industry Co that were designed and manufactured using the misappropriated trade secrets and patented inventions of Manitowoc Cranes. The Commission’s final determination in the In Re Certain Crawler Cranes and Components Thereof investigation (Inv. No. 337-TA-887) confirms that the ITC is a favorable forum in the fight against foreign intellectual property theft, especially in cases where jurisdiction may be difficult to establish in U.S. Courts.
The ITC issued its Final Determination affirming, in part, Administrative Law Judge Shaw’s Final Initial Determination that Chinese heavy machinery manufacturing company Sany Heavy Industry Co. had misappropriated Manitowoc Cranes trade secrets in developing its products, infringed on two of Maitowoc’s patents, and harmed the U.S. domestic crawler crane industry. The ITC determined that at least one product infringed certain claims of one of Manitowoc’s patents and that six trade secrets of Manitowac’s were protectable as trade secrets and misappropriated.
The investigation began in July 2013 after Manitowoc filed a complaint alleging Sany America imported crawler cranes which used Maitowoc trade secrets and infringed two of its patents. The alleged trade secrets included Manitowoc’s specific marketing and business plan for certain crawler cranes, detailed cost and pricing information, manufacturing process and procedures, and engineering design standards and plans. Maitowoc claimed that the trade secrets were passed to Sany by a former Manitowoc employee.
Although the ALJ only recommended an exclusion order of 5-10 years, the ITC apparently believed the evidence supported the longer period of exclusion, and issued an exclusion order enjoining Sany America, Inc. from importing cranes that infringe the patent or use any of Manitowoc’s trade secrets for 10 years. The Commission further issued a cease-and-desist order for a period of 10 years to prohibit the sale of cranes already imported into the United States. Although Sany America had only imported one crane into the United States, the ITC found that this was a commercially significant inventory in the light of the small market for that specific type of crane.
The Commission set a bond at 100 percent of the entered value, allowing accused products to enter the United States during the 60-day Presidential Review Period. While the President through his U.S. Trade Representative has the ability to disapprove the remedy for policy reasons, that authority has only been used once in the past 28 years and is extremely unlikely in this case.
Investigations alleging theft of trade secrets had not been a significant part of the ITC’s docket until the Federal Circuit issued its landmark decision in the Tian Rui case, confirming that the ITC has jurisdiction over misappropriation of trade secrets even when the predicate acts occurred entirely outside of the United States. Since Tian Rui, the ITC has played an important role in addressing the alarming rise in international trade secret theft and is a particularly attractive forum against foreign defendants with no American presence because of its in rem jurisdiction over the goods imported into the U.S.