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Wisconsin lawmakers urge feds to investigate Chinese company over knockoffs

Man Wah Holdings was ordered to pay more than $100M in damages to Germantown-based Raffel Systems

The Federal Trade Commission building in Washington.
The Federal Trade Commission building in Washington pictured on Jan. 28, 2015. Alex Brandon/AP Photo

A bipartisan trio from Wisconsin’s congressional delegation is urging federal agencies to investigate a Chinese company that was found to have copied a product from a Wisconsin furniture-maker.

Man Wah Holdings, based in China, was ordered to pay more than $100 million in damages after a federal jury determined in June that it knocked off a lighted cup holder designed by Germantown-based Raffel Systems. The product is meant to be installed in reclining, theater-style seats.

Man Wah Holdings is appealing the amount of damages. Meanwhile, Democratic U.S. Sen. Tammy Baldwin and Republican U.S. Reps. Glenn Grothman and Scott Fitzgerald are calling for federal action to “prevent (this) type of theft from happening again.”

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They sent letters last week to the chairs of the Federal Trade Commission and the U.S. International Trade Commission, asking the agencies to examine whether the Man Wah’s “years-long campaign to infringe” upon Raffel Systems’ intellectual property violated the Federal Trade Commission Act and International Trade Commission Act. They also wrote to the Consumer Product Safety Commission to request an investigation, citing complaints about defects like electrical problems in the counterfeit cup holders.

“There’s a fear that other countries may take advantage of the patents, which American companies worked so hard to develop,” Grothman, whose southeast Wisconsin district is near Raffel headquarters, said in an interview with Wisconsin Public Radio. “Raffel was concerned that this may be an ongoing problem, (that it) may affect other companies, and it’s something the American regulatory agencies ought to be aware of to make sure this type of thing doesn’t happen again.”

An FTC spokesperson said, because the agency’s investigations are nonpublic, he could not confirm or deny whether one has been opened. A Consumer Products Safety Commission spokesperson likewise declined to say whether an investigation has been opened.

Raffel Systems has about 30 employees in Wisconsin, according to the letters.

Man Wah Holdings representatives could not immediately be reached for comment.