Manitowoc Co., the heavy equipment maker that’s splitting itself in two, won a trade case to block Sany Heavy Industry Co.’s industrial cranes from the U.S. market.
Sany Heavy infringed a Manitowoc patent and stole trade secrets, the U.S. International Trade Commission said, according to a notice posted by the agency Thursday in Washington. The import ban can be overturned by the administration of President Barack Obama on public policy grounds.
Manitowoc, which built its first construction crane in the 1920s, claimed Sany Heavy hired away its top engineer in 2010 to copy the machines used to build wind turbines and nuclear plants, among other facilities. They are known as crawler cranes for the tank-like tracks they move on and are so big they need to be transported in pieces.
The crawler cranes are in danger of tipping over, and traditional counterweights can weigh 300 metric tons and take 15 trucks to transport. Manitowoc said it developed a variable position counterweight that reduces the amount needed to stabilize the crane so it can be used on uneven ground, change configurations when needed and cost less to transport.
“We have always maintained a culture of innovation at Manitowoc and we are thrilled with the ITC’s decision,” Manitowoc Chief Executive Officer Glen Tellock said in a statement. “We believe today’s final determination validates views expressed by our customers that our variable position counterweight technology is a game-changer in the industry.”
The invention and secrets are used in Manitowoc’s $30 million 31000 crane, designed to lift 2,300 tons, as well as smaller cranes that compete with Sany’s SCC8500, which lifts 550 tons.
Sany Heavy denied copying any features of Manitowoc’s cranes, and says the engineer brought only his experience and not any trade secrets. It also argued that Manitowoc hadn’t established that any Sany Heavy products sold in the U.S. used Manitowoc know-how.
The trade commission, a quasi-judicial agency whose job is to protect U.S. markets from unfair trade practices, sided with Manitowoc on one of the two patents in the case and on the trade secrets theft charge. It ordered Sany from selling any cranes that use the trade secret information for 10 years.
The case, first filed in June 2013, has taken on new importance as Manitowoc prepares to split into two companies. One would sell Frymaster deep fryers and other equipment for commercial kitchens, and the other would sell the industrial cranes. It announced the spinoff of the food-service business Jan. 29, under pressure from activist investors Carl Icahn and Relational Investors.
Manitowoc’s crane operations, which have been hit by a slow global economy and plunging oil prices recently, had annual revenue of $2.3 billion in 2014 selling machinery including mobile cranes, lattice-boom crawlers, tower cranes and boom trucks.
In the U.S., wind producers installed about 2,500 turbines, giant structures that typically reach more than 328 feet (100 meters) in diameter, according to the American Wind Energy Association, an industry group. Another 98 projects were under construction by the end of 2014 in 23 states, the wind group said.
Sany Heavy, the listed unit of Sany Group Co., began in 1989 as a welding material factory and has grown into China’s largest construction-equipment maker and fifth largest in the world. A Sany Group-controlled group successfully sued Obama over his decision to block a windfarm in Oregon near a military base.
The dispute between Manitowoc and Sany Heavy is separate from a broader fight between the U.S. and China over trade. The Obama administration has filed a complaint with the World Trade Organization accusing China of providing subsidies in seven industries, including steel products and building materials, to give them an unfair advantage in the market.
The case is In the Matter of Certain Crawler Cranes, 337-887, U.S. International Trade Commission (Washington).