The Manitowoc Company Prevails in Patent Infringement and Trade Secret Misappropriation Lawsuit Against Sany

The Manitowoc Company, Inc. (NYSE: MTW) announced the U.S. Court of Appeals for the Federal Circuit(“CAFC”) ruled in its favor in its patent infringement and trade secrets misappropriation lawsuit against Sany Heavy Industries and Sany America (collectively “Sany”). The CAFC’s October 11, 2016 ruling summarily affirmed the United States International Trade Commission (“ITC”) April 16, 2015 Final Determination and Cease and Desist Order against Sany in Certain Crawler Cranes and Components (Inv. No. 337-TA-887). The CAFC specifically noted that no further opinion was necessary.

“Manitowoc is extremely pleased with the CAFC’s ruling which also affirms the ITC’s decision. Aggressively protecting our proprietary intellectual property creates value for our customers, shareholders and employees. Innovation drives Manitowoc’s product strategy. Our Variable Position Counterweight (VPC) technology is just one example of our ongoing commitment to being an industry leader,” commented Barry L Pennypacker, president and chief executive officer of The Manitowoc Company, Inc.

The CAFC’s October 11, 2016 ruling upholds all of the determinations from the ITC’s April 16, 2015 Final Determination. The Final Determination was issued in connection with the ITC’s investigation of Sany’s conduct based upon a complaint filed by Manitowoc Cranes, LLC, which alleged that Sany had violated Section 337 of the Tariff Act. The ITC’s determinations included that at least one Sany crane product infringed one of Manitowoc’s patents and that six trade secrets ofManitowoc were both protectable as trade secrets and misappropriated. As a result of those determinations, the ITC issued a limited exclusion order that prohibits importation into the U.S. by Sany of cranes (a) that infringe one of Manitowoc’s patents or (b) that use any of six of Manitowoc’s trade secrets for a period of ten years.

The ITC determinations which were upheld by the CAFC concluded, “Sany actively encouraged misappropriation of Manitowoc’s trade secrets and knew the trade secrets were acquired by improper means.” Specifically, “Sany had reason to know that the Manitowoc trade secrets were improperly obtained, specifically via a breach in . . . confidentiality obligations” owed Manitowoc by its former Vice President, John Lanning. After noting how Mr. Lanning described Manitowoc’s “VPC technology as ‘game changing’ and urged tight confidentiality,” the ITC found “that the details of the VPC concept at Sany came directly from Mr. Lanning,” who “Sany hired for [his] expertise.”

In addition to the exclusion order, the ITC issued a cease and desist order that prohibits Sany America from importing, selling, marketing, advertising, or distributing cranes that were manufactured using any of the six Manitowoc trade secrets found to be misappropriated.

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