After the Chinese heavy-equipment maker Sany Group (SANY) sued the U.S. President Obama for blocking their purchase last year, the United States International Trade Commission (ITC)  announced a Section 337 investigation into SANY for patent infringement on July 11. Although SANY has not received the official paper yet, they have been preparing to respond to the suit lawfully.

Scrambling for market share

The investigation is based on a complaint filed by Manitowoc Cranes, LLC, of Manitowoc, Wisconsin (Manitowoc) on June 12. The complaint alleges SANY's SCC8500 crawler crane infringed its patent right of variable position counterweight and asked the ITC to start the Section 337 investigation to issue an exclusion order as well as restraining orders on the product. In addition, Manitowoc requests SANY to destroy all crawler cranes and related molds, tooling and other equipments that make use of Manitowoc Cranes' misappropriated trade secrets. The complaint also asks that SANY release documents and items in its possession relating to the trade secrets. The data shows that the variable position counterweight system is used on the Manitowoc Model 31000 which Manitowoc has plans to introduce on smaller crane models.

SANY company's main products in the US market are mobile crawler crane and cross-country crane with technical challenges. SANY SCC8500 model with 500 ton lifting capacity is a medium tonnage crawler crane. Before started to search and develop SCC8500 model crane, SANY had made deep patent forewarning analysis.

Analyst points out that SANY seeks to expand their overseas market share which contributing over 40% of its total revenue, while the U.S. market accounts for the vast majority of that market share. SANY'S crawler crane in the U.S.  market share has reached about 8%, ranking the third position. Given the circumstances, it comes as no surprise to SANY to encounter the "337 investigation".

Responding actively in legal action

It will set a timetable within 45 days for completing the investigation and one year for to render a verdict. If the ITC finds a violation of Section 337, it will issue an exclusion order and restraining orders, which mean the exclusion of articles from the U.S. market.

SANY now has two lawyer teams from the U.S. and china preparing to respond to the suit lawfully. As a giant leader of mechanical engineering enterprises, SANY has attached  a great importance to IPR protection for many years. SANY always shows respect for competitors' IPR and factors patent infringement into a risk analysis before started to develop a new product, especially the product oriented to overseas market. In a bid to avoid patent infringement effectively, SANY also established the first IP information platform in mechanical engineering industry which provide patent analysis and patent warning system for product research and development and product exported.

According to the statistics, as of the end of 2012, SANY has filed cumulatively a total of 6,000 patent applications 300 of which are international patent applications and owned over 3,000 patents.SANY not only maintains rapid growth in patent applications but also establishes an IP management system including the patent committee of the group, IP department, business division, and implemented the whole process of patent strategy.

Compared with the early day that Chinese enterprises were not familiar with international competition rules and hesitate to make response and often lost foreign markets, more and more companies like SANY start to be aggressive in legal action which shows that the enterprise strength are rapidly and significantly enhanced and IP is a good means for Chinese enterprises to cope with Section 337 investigations and other international IP disputes. 

(China IP News)