Legislation & Legal

Greenlite Glass Sues Safti First Over Fire-Rated Glass Floor Patent

A lawsuit over a fire-rated glass floor patent is being litigated in the U.S. District Court of Northern District of California. Ely Holdings Ltd. and Greenlite Glass Systems have filed a complaint against O’Keeffe’s Inc., also known as Safti First, alleging that Safti First has directly and indirectly infringed upon Ely’s patent.

THE ORIGINAL COMPLAINT

The complaint was filed in November 2018 and gives background into the patent and outlines how Safti First allegedly infringed upon it.

In April 2010, the U.S. Patent & Trademark Office awarded Ely Holdings Ltd., a U.K.-based company, a patent for “Fire Rated Glass Flooring,” referred to as the 475 patent throughout the original complaint.

Ely Holdings alleges that in October 2014, Safti First began manufacturing and selling the GPX FireFloor System, which fell within the scope of one or more claims of Ely’s 475 patent.

Ely’s counsel sent a letter to William O’Keeffe, CEO of O’Keeffe’s and Safti First, in February 2018 informing him that Ely had become aware of what it alleged to be patent infringement without authorization from Ely. The letter requested that O’Keeffe’s provide written assurance that it had ceased selling the fire-rated glass flooring system. The next month, O’Keeffe’s counsel responded denying the infringement claims.

Ely Holdings alleges in the first count that Safti First has directly infringed multiple claims of the 475 patent and has made no efforts to alter its products to avoid infringement. In the second count, it accuses Safti First of inducing others to infringe upon the 475 patent by instructing and encouraging third parties to install, market or distribute the GPX FireFloor System and related materials.

The company claims that the patent infringement has caused harm in the form of “price erosion, loss of goodwill, damage to reputation, loss of business opportunities, lost profits, inadequacy of monetary damages, and direct and indirect competition.”

SAFTI FIRST’S COUNTERCLAIM

In a counterclaim filed in response to the original complaint in November 2018, Safti First denied the direct and indirect infringement allegations. In its defense, Safti First alleges that Ely Holdings failed to state a claim for which relief may be granted, that the 475 patent is invalid under one or more provisions of Title 35 of the U.S. Code, and that Ely has not alleged any specific damages or irreparable harm arising from the alleged infringement.

Safti First has asked the court to dismiss the suit without granting any of the relief requested by the company.

AMENDED COMPLAINTS

In May 2019, Ely Holdings amended its complaint to include Greenlite Glass Systems, a Canadian company that distributes a fire-rated flooring system under the 475 patent, as a second plaintiff.

In its amended counterclaim, filed in May 2019 in response to Ely Holding’s amended complaint, Safti First made several allegations against Greenlite Glass Systems, including a count of violating the Lanham Act and unfair competition.

Safti First alleges that, in an effort to obtain “buy America” jobs, Greenlite made several misrepresentations including: “representing that it was supplying materials manufactured in America; that fire and safety floors could not be obtained from any American manufacturer; that it produced ‘the only exterior fi re-rated glass floor/skylight system available in North America; that it made ‘the only exterior glazed system with an insulated glass assembly for North America; and, without any reasonable basis therefore, that Safti’s fire- and safety-related flooring violated the patent on Greenlite’s product.”

Safti First also contends that when the claims were made by Greenlite, the company knew that the Litefl am product at issue was made in Europe, that Safti First sold a system made in the U.S., and that the product did not violate the 475 patent. Safti First also says it has lost fi re and safety glass flooring business due to these alleged actions.

“That conduct was unfair, deceptive, fraudulent and unlawful, and therefore constitutes unfair competition under California’s Business and Professions Code Section 17,200, and under the common law of the State of California,” reads the amended counter complaint.

CROWN CORR’S INVOLVEMENT

Glazing contractor Crown Corr was subpoenaed by Safti First in June 2019 to produce documents as evidence in the case. Crown Corr fi led a motion to quash the subpoena in July 2019 in the U.S. District Court of the Northern District of Illinois, claiming that the request would impose undue burden, that Safti First cannot show a need for the requested documents, that the documents are not relevant to the case and contain a substantial amount of proprietary information.

Crown Corr explains in the motion that it used a fire-rated glass product made by Vetrotech Saint-Gobain North America and distributed by Greenlite for the Transbay Terminal Project in San Francisco, also known as the Salesforce Transit Center. Safti First sought documents and extensive electronic records.

Crown Corr says it does not have any information related to the validity or enforceability of any of Greenlite’s patents, or information related to whether Safti First infringed on any patents. The motion has not yet been granted or dismissed.

CURRENT STATUS

Both sides requested a trial by jury. However, the case is still in the discovery phase.

O’Keeffe provided USGlass magazine with his comment on the case saying, “We both have patents. I have a patent on my system and they have one on their system. We feel ours is a much more advanced and reserving patent. We don’t really understand their basis of claiming a suit against us. We feel it is an unjust lawsuit from a company in Canada that wants to keep us out of the floor business.”

Greenlite Glass declined to comment.

Chinese Company and Billionaire Indicted in Anti-Dumping Case

A federal grand jury indictment alleges that China Zhongwang Holdings Ltd., its former president and Chinese billionaire Zhongtian Liu and several co-defendants, including affiliate company Perfectus Aluminum, lied to U.S. Customs and Border Protection to avoid paying $1.8 billion in anti-dumping and countervailing duties (AD/CVD) to the U.S.

The AD/CVD orders were imposed by the U.S. in 2011 on certain types of extruded aluminum imported into the country from China. The indictment alleges that China Zhongwang exported vast quantities of aluminum disguised as pallets to avoid customs duties of up to 400 percent, and then sold the pallets to related entities to fraudulently inflate the company’s revenues and deceive investors worldwide, according to the indictment.

The defendants allegedly created a falsely inflated sales volume by exporting the pallets to the U.S. and then engaging in transactions with affiliate companies under Lui’s control.

The indictment contends that the aluminum extrusions were spotwelded together to appear as if they were functional pallets, or finished goods, that are not subject to the duties. However, no pallets were ever sold between 2011 and 2014. Instead, the 2.2 million pallets were stockpiled in warehouses in Southern California, according to the indictment.

The 24-count indictment also claims that the defendants were involved in a massive money laundering scheme in which they funneled hundreds of millions of dollars through shell companies to Liu’s U.S.-based aluminum companies.

All of the defendants are charged with conspiracy, nine counts of wire fraud and seven counts of passing false and fraudulent papers through customs. All defendants except the warehouse entities also face seven counts of international promotional money laundering. The charges face a maximum penalty of five years in federal prison for the conspiracy charge and up to 20 years for each of the remaining 23 counts if convicted.

“… The bogus sales of hundreds of millions of dollars of aluminum artificially inflated the value of a publicly traded company, putting at risk investors around the world. The rampant criminality described in this case also posed a threat to American industry, livelihoods and investments,” said United States attorney Nick Hanna in a statement from the U.S. Department of Justice (DOJ).

A statement released by China Zhongwang Holdings Ltd. says, “The company would like to clarify that the group has always strictly abided by in its business operation the laws and regulations of the People’s Republic of China and destination countries of its exported products, and has developed overseas markets under the principle of fair and orderly competition.”

BACKGROUND

In September 2017, the U.S. Department of Justice filed a complaint against Perfectus Aluminum, alleging that it avoided paying $1.5 billion in tariffs by passing off illegally imported aluminum extrusions as finished products. It claimed that Zhongtian Liu was effectively the owner of the California-based company.

“Between 2011 and at least 2014, Liu used Perfectus to illegally import more than 2.1 million aluminum ‘pallets’ from China into the United States…The ‘pallets’ were manufactured by China Zhongwang and/or its affiliates and ‘sold’ to Perfectus by several intermediary entities…Many of these intermediary entities are or were owned and operated during the relevant period by members of Liu’s family or his close associates,” reads the complaint.

In January 2018, the AEC filed a new circumvention petition, alleging that China Zhongwang Holdings and its network of affiliates transported its aluminum extrusion products through Vietnam before being exported to the U.S. in order to avoid AD/CVD orders.

In May 2019, the U.S. Department of Commerce issued a preliminary determination that Chinese aluminum exported from Vietnam circumvents the orders.

To view the laid-in version of this article in our digital edition, CLICK HERE.

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