Laminate flooring sales to US facing lawsuit
By Yu Liang (China Daily)
Updated: 2005-10-25 08:45

Ni Zhengluo, a manager with Furen Laminate Flooring in East China's Fujian Province, is anxious about next year's sales to the United States because of an intellectual property rights infringement lawsuit filed back in July.

Three US flooring manufacturers, and Unilin, a Holland-based flooring company, filed petitions in a US court claiming that Chinese firms violated article 337 of the US tariff law by infringing patents on a special "locking" design used to lay the laminate tiles.

If the petition is approved, Chinese flooring makers are likely to face high patent fees or have to give up the US market, the largest export market for Chinese laminate flooring.

In light of this, Ni's company is suffering. Currently, a number of customers are visiting and placing orders with Ni's company at the ongoing Chinese Export Commodities Fair, the largest export exhibition in China.

However, Ni said customers, who knew the case well, only placed orders on flooring unaffected by the intellectual property charge.

"We have to explain the possibilities that could result from the case to new customers before signing a contract," he said.

Ni said although the United States is not the largest overseas market of the company, it has made a certain impact on its sales. He is even more concerned of the fact that the case might affect other markets of the company.

Ni is not the only Chinese laminate flooring maker to suffer from the US lawsuit and is striving to minimize its impact.

Wang Hui, an official with Der Group Floor Co Ltd, said buyers from the United States are fewer than the previous year and none of them placed orders on the products in concern.

The United States accounted for 60 to 70 per cent of Der's overseas markets. Products that have the "locking" problem in question account for nearly half of the company's products.

Preparing for possible unfavourable outcomes from the charge, Wang's company is targeting new overseas markets, such as in Russia and India, which have a large demand for inexpensive Chinese products. The company is also shifting from the "locking" affected products to other forms.

"We have never used the 'locking' method concerned," said Liu Jian of Asia Dekor Holding Limited. "But we still have to spend time and money to testify it to the US side."

The Singapore-headquartered company, which marketed several well-known brands in China, attached great significance to IPR (intellectual property right) protection, he said.

Liu followed by saying that the company, together with several Chinese enterprises in this sector, had hired lawyers to deal with the case, though the friction's impact was not yet serious on Dekor's business.

"We received a lot of inquiries from customers in the United States and Canada on this session of CECF," he said.

Yang Meixin, an official with the China Timber Distribution Association, called all enterprises involved to respond to the lawsuit so as to gain a favourable solution.

She said the association will co-ordinate the enterprises and keep them informed.

(China Daily 10/25/2005 page10)