Unilin Files Case Against Unlicensed Resilient Imports; I4F & Välinge Refute

Calhoun, GA, Willemstad, Curaçao, March 26, 2019-On March 25, Flooring Industries (Unilin IP), together with its affiliated companies, Mohawk Industries and IVC US, filed a complaint in the U.S. based on Section 337 of the U.S. Tariff Act before the International Trade Commission (ITC), and I4F and Välinge each issued a response to this action.

Unilin’s complaint requests an exclusion order preventing the unlawful importation of vinyl products that infringe certain Unilin IP patents. Unilin IP is seeking a “general exclusion order” to empower U.S. customs to block all patent infringing vinyl products at the U.S. border.

The following companies are identified as proposed respondents: ABK Trading Corp., Anhui Hanhua Building Materials Co., Ltd.; Aspecta North America, LLC; Aurora Flooring LLC; Benchwick Construction Products Ltd.; Changzhou Jinuo Decorative Material Co., Ltd; Changzhou Marco Merit International Solutions Co.; Changzhou Runchang Wood Co., Ltd.; Christina & Son Inc.; Chungstine Inc. d/b/a Expert Hardwood Flooring, Davati Group LLC; DeSoto Sales, Inc.; Global Wood Inc.; Go-Higher Trading (Jiangsu) Co., Ltd.; Golden Tree Import & Export Inc.; Halstead New England Corp.; Hangzhou Kingdom Import & Export Trading Co. Ltd.; IN.id Corp.; JC Int’l Trading, Inc., Jiangsu Divine Building Technology Development Co. Ltd.; Jiangsu Lejia Plastic Co. Ltd.; JiangSu Licheer Wood Co., Ltd.; JiangSu TongSheng Decorative Materials Co., Ltd.; Jkgy Inc. d/b/a Nextar Trading; KJ Carpet Wholesale, Inc.; Maxwell Flooring Distribution LLC; Metroflor Corp.; Mountain High Corp.; Mr. Hardwood Inc.; National Coverings, LLC, Nextar Wholesale; Northann Distribution Center Inc.; Pentamax Inc.; RBT Industries LLC d/b/a Hardwood Bargains; RC Vinyl Inc.; Royal Family Inc.; Sam Houston Hardwood Inc.; Zhejiang Changxing Senda Bamboo and Wood Products Co. Ltd.; Zhangjiagang Elegant Home-Tech Co. Ltd.; Zhangjiagang Elegant Plastics Co. Ltd.; Zhangjiagang Yihua Plastics Co., Ltd.; Zhangjiagang Yihua Rundong New Material Co. Ltd.; Zhejiang Kimay Building Material Technology Co., Ltd.; Zhejiang Kingdom Flooring Plastic Co., Ltd.; and Zhejiang Walrus New Material Co., Ltd.

The complaint is based on 59 claims of three U.S. patents: U.S. Patent No. 9,200,460, U.S. Patent No. 10,208,490 and U.S. Patent No. 10,233,655, which relate to the concepts of (1) angle-folddown locking mechanisms, including in resilient flooring panels and to (2) glueless rigid or multilayered vinyl flooring panels.

In 2007, Unilin obtained a general exclusion order from the U.S. ITC based on its glueless locking patent portfolio-a decision which was confirmed in appeal in 2008 by the U.S. Court of Appeals for the Federal Circuit. In order to enforce this general exclusion order, Unilin IP developed the L2C label system (License to Clic), whereby certain companies have to attach a unique holographic L2C label to boxes of products that incorporate Unilin IP’s technologies to identify that such products are licensed (www.L2Clabels.com).

I4F responded to Unilin’s news release in which it describes the filing of a complaint against virtually all Chinese manufacturers before the International Trade Commission (ITC). I4F is calling Unilin’s action improper scare-mongering, and an outright attack on free trade as well as freedom of choice, as this attempts to obstruct U.S. consumers from selecting flooring products they prefer.

No exclusion orders would be entered before at least one year, to eighteen months, meaning that imports to the U.S. will continue during this period. I4F believes the timing of this filing, i.e. during Domotexasia/CHINAFLOOR 2019, is an attempt by Unilin to undermine, if not sabotage, I4F’s relations with its fast-growing number of licensees.

I4F is of the opinion that Unilin’s filing is another attempt to monopolize and extract unwarranted license fees from the industry. Unilin’s request for the exclusion of certain products goes against public interest and infringes a consumer’s freedom to choose. I4F also believes that the asserted patents from Unilin are invalid in view of extensive prior art.

I4F is confident that in the unlikely event of a general exclusion order, products using I4F’s patented technologies will remain unaffected. The 2007 ITC ruling mentioned by Unilin is misleading as it has nothing to do with this filing, and, furthermore, I4F products did not fall under this ruling.

Välinge notes, The three patents asserted in this ITC procedure have been assessed as relevant to many vinyl flooring products and are, through a non-assertion agreement, therefore part of the Extended Patent Protection (EPP). As a result, Välinge licensees who have signed the EPP and manufacture LVT/SPC/WPC products with Välinge locking systems which are properly labelled and paid for according to contractual obligations, will not be affected by this complaint. Through the non-assertion agreement, Unilin has also been granted the right to permit its licensees to manufacture and sell resilient flooring products which incorporate Välinge’s patented technology in exchange for royalty payments.

Since 2016, Välinge offers an Extended Patent Protection (EPP) for LVT, SPC and WPC flooring which include sub-licenses and non-assertion undertakings from companies such as Classen, Unilin and US Floors. These third-party patent holders have maintained the right to take legal actions to protect their patent rights including actions against producers, importers and distributors which are trading with infringing LVT, SPC and WPC products not covered by EPP.

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