Raffel Systems Calls on U.S. Government Agencies to Investigate Man Wah for Anti-Competitive and Unsafe Business Practices
GERMANTOWN, WI., August 31, 2022 – Following its historic verdict in the U.S. District Court for the Eastern District of Wisconsin, Raffel Systems, a global producer of controls and comfort systems for motion furniture and a variety of other end markets, today wrote the U.S. International Trade Commission (ITC), U.S. Federal Trade Commission (FTC), and the U.S. Consumer Product Safety Commission (CPSC), urging each agency to launch an investigation into Man Wah for unfair trade practices and for failing to report potentially dangerous consumer safety risks.
After years of litigation, on June 17, 2022, a federal jury in Milwaukee found Man Wah liable for willful trade dress infringement, misappropriation of trade dress, false patent marking, and willful patent infringement related to Raffel’s integrated illuminated cup holder for motion furniture. The jury awarded Raffel $97.5 million in punitive damages and $8.7 million in actual damages, totaling $106.2 million.
“Though it is of critical importance, defending intellectual property can be extremely expensive and burdensome for a small business like ours,” Raffel Executive chairman Paul Stangl said. “That’s why we are asking the U.S. government to step in and investigate Man Wah’s blatant theft of our proprietary technology.”
Stangl continued, “And since the historic jury verdict was announced, we have been contacted by several other small companies across the globe that have encountered theft of their intellectual property by Man Wah. There is evidence that Man Wah continues to turn a blind eye to intellectual property rights, and it can’t go on any longer.”
Specifically, Raffel called on the ITC to investigate Man Wah for alleged violations Section 337 of the International Trade Commission Act. Section 337 forbids companies from engaging in unfair importation, which is violated when any importer engages in theft of intellectual property or patent infringements. Raffel argued that, as soon as the jury found Man Wah guilty, it had participated in unfair importation by stealing its proprietary cup holder.
Further, Raffel requested an FTC investigation of Man Wah for alleged violations of Section 5 of the Federal Trade Commission Act, which forbids “unfair or deceptive acts or practices in or affecting commerce.” Raffel argued that Man Wah’s court-proven intellectual property theft comprised an inherently deceptive act that impacted commerce.
Raffel also urged the CPSC to investigate Man Wah for alleged violations of the Consumer Product Safety Commission Act, which requires company to disclose any findings on potentially dangerous, defective products. During the course of its litigation with Man Wah, Raffel learned of reports that counterfeit cup holders had failed, including an instance where a circuit board in a counterfeit cup holder showed signs of burning and charring. Given that it failed to disclose this potentially dangerous consumer safety issue to CPSC, Raffel is asking CPSC to investigate the matter.
Raffel attorney Lanny Davis of Davis Goldberg & Galper PLLC said, “We believe the ITC, the FTC and the CPSC will take our requests seriously to investigate Man Wah because they have an interest in protecting businesses and consumers from anti-competitive behavior and unsafe products. In my view, unfair competition under U.S. law is defined by a jury verdict finding Man Wah stole Raffel’s intellectual property.”
During the June 22 trial, the jury was shown significant evidence of Man Wah’s intellectual property theft, including the following two emails sent by Man Wah’s former U.S. CEO Guy Ray:
- On November 26, 2018, Ray wrote to Man Wah executive Tommy Wong: “The dumbest thing we did, was have the new supplier use raffel patent # and description on each piece. Not only is that patent infringement, but it is fraud which if raffel wanted to pursue, could be escalated to criminal charges in addition to the civil charges already filed.”
- On December 20, 2018, Ray wrote in another email to Wong: “This is absolute b**ls s**t and I’m telling you now, we stand to lose 100m in business that we will never recover if we do not take care of this. Who is getting fired at Manwah because of this???”
Coverage of the historic jury verdict can be found here and here.
Raffel's letters can be found here:
- U.S. International Trade Commission
- U.S. Federal Trade Commission
- U.S. Consumer Product Safety Commission
About Raffel Systems
Since 1982, Raffel Systems has been the industry innovator in developing electronic controls and comfort solutions for multiple end markets. Headquartered in Germantown, Wisconsin, Raffel is a global manufacturer providing design, engineering, technical sales, and customer service throughout North America, Asia and Europe. Through its Chinese subsidiary, Raffel also has manufacturing, engineering and sales in mainland China.