Chinese Laminate Producers Face U.S. Patent Regul

Beijing, China, January 22, 2007--Chinese laminate floor manufacturers may soon have to pay high royalties or be banned from the US flooring market, according to China Daily. The U.S. International Trade Commission recently ruled that Chinese exporters infringed upon patents in a locking system that is now used by 70 percent of China's laminate floor exports. The ruling means Chinese products of this kind will be excluded from the US market unless they pay royalties to patent holders. The fee is 65 cents per square meter, which would amount to more than 10 percent of the current value of such flooring exported from China. Challenging the ruling is not likely from most Chinese players, as the US government's primary rulings in 2006 have been upheld. Some small exporters may just give up the US market, Yang Meixin, an official with the China timber distribution association, said on Friday. Those who want to continue to do business with the US have various options, she said. They could add the patent fee to their prices but "it will blunt their competitive edge and it is not sure whether the market can absorb the increases". Or they could avoid charges if they build plants in a third country, but the costs might again be prohibitive. Although Chinese manufacturers could bring the case to US courts, they may not be able to afford the costs up to $1 million. Yang suggested Chinese enterprises undertake more innovation and establish their own patents. The case was initiated by Unilin, a Dutch flooring company, and three US flooring manufacturers, which filed petitions in US court asking that investigations into Chinese flooring products be launched to see if they were in violation of article 337 of US tariff law. Legal experts say that an article 337 violation is even more severe than that of a dumping charge, as it means the product will be totally blocked from the US market.