Canadian pipe extrusion equipment maker Corma Inc. is claiming victory in some high-profile patent-infringement suits against Chinese competitors in courts in both China and the United States, and believes its aggressive actions in the legal system have helped stem losses from copied equipment.
Corma said Chinese courts and U.S. courts have ruled in its favor in several long-running lawsuits, with Chinese courts ordering one competitor, Shanghai Jwell Machinery Co. Ltd., to pay Corma a total of 750,000 yuan ($112,000), while a U.S. court has ordered Jwell to pay $750,000 (5.02 million yuan) to Corma.
At issue, Corma says, are violations of its patents on both its mold block quick return technology, which increases output while reducing the capital investment needed for mold blocks, and on its vacuum-forming technology.
In a statement, Toronto-based Corma said the Chinese lawsuits against Jwell, Shanghai ERA Construction Materials Development Co. and Anhui Guotong High-Tech Pipes Co. Ltd. are coming to an end, as Jwell, the primary defendant, has exhausted its appeals, including a challenge to the legitimacy of the Chinese government issuing the patents to Corma.
Stefan Lupke, Corma's executive vice president, said his company lost millions of dollars in sales to copied equipment in China and other countries. He said that his company in July is supposed to receive the 750,000 yuan payment from Shanghai-based Jwell ordered by the Chinese courts.
The money that you recover will never offset those losses, but in most cases will eventually stop companies from infringing on your patents, Lupke said. Eventually the bleeding will stop.
A Jwell spokesman said the two sides have settled the case, and added that it can be difficult to determine if designs are infringed upon because technology can be very similar. In the past, Jwell officials said Corma patented basic technology and sued based on that.
Lupke said Corma has reached settlements with some other Chinese machinery makers, and is currently litigating a case against another Chinese firm. He claims the Canadian firm is seeing less infringement of its designs.
We've pushed many of them out of copying our style of machines, whereas many of them now build the German style of machines, Lupke said.
He said many of Corma's global competitors did not seek out as much patent protection in China and are suffering more losses. Corma first began applying for Chinese patents in the 1980s, as part of a policy to applying for patents around the world, he said.
While Corma believes its legal actions have helped stem losses, the company also credits establishing a Shanghai factory in 2005 for helping reduce its own costs and create opportunities in a much more competitive global economy.
Corma had its best year ever in 2009, as the company managed to keep increasing sales in the economic crisis and kept a full order book for 2010, Lupke said. 2008 was also a good year, he said.
The privately held company does not disclose sales figures, but he said sales rose 13 percent in 2009 and look on pace to rise 20 percent in 2010.
He said Corma, which has 250 employees in Canada and about 20 in Shanghai, credits some of the growth to emerging markets and the rising spending on infrastructure like water pipes in those countries.
He said business has been strong in South America, North Africa, Angola and India.
We've really gone to some of the non-traditional markets, he said.
He said Corma is starting to make gains against Chinese competitors in some of those developing markets like South America, as China's manufacturing costs rise and as some of the Chinese equipment has reliability problems, he said.
In those markets, that is where the Chinese had been relatively successful in selling machinery in the last few years, but they've had some failures and equipment that has not performed as promised, he said. We've claimed some of that business back, especially in South America and India.
He said Chinese equipment a few years ago sold for 25 percent of Corma's costs, but now sells for about 40 to 50 percent of Corma's costs, as rising wages and other factors have increased costs in China.
He said the rise of Chinese and other emerging market competitors forced changes in pricing structure and how Corma operates, but he believes the company has adapted successfully: As there is now a global economy, one must have a global approach to business.
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