Yekalon, Unilin locked in patent case

Chinese building materials provider Yekalon Industry Inc says it will take legal action "at any cost" to defend its self-developed locking technology for laminate and wood floorings.

The private company, based in the southern boom city of Shenzhen adjacent to Hong Kong, was charged by its much stronger competitor Unilin, a subsidiary of the US-listed Mohawk and located in Belgium, with patent infringement at a world fair in Germany in January.

"We have hired top-notch lawyers in Germany and will appear at the court of Hamburg on Wednesday," said Wilson He Yixin, chairman of Yekalon. "We will never surrender to these groundless allegations."

The focus of the case lies in a glueless locking technology for laminate and wood floorings. Unilin has owned patents since 1996 for the method and duopolized the market with another European company, Valinge.

However, the Chinese company invented a new locking method in 2005 which can connect the flooring by vertically tapping in the edges of the planks instead of the established technique of angling and snapping horizontally, according to He.

"Our locking technology is completely self-developed. It works theoretically different from that of Unilin. How can we infringe its patents?" he asked, adding that Yekalon has applied for international patents for the invention under the Patent Cooperation Treaty (PCT) and will soon complete the process.

It is the second big clash between Yekalon and Unilin.

In July 2006, 18 Chinese flooring exporters, including Yekalon, were put under a Section 337 investigation by the US International Trade Commission (USITC) for patent infringement by Unilin and its subsidiaries.

Yekalon was the only company in the group that was not condemned by the investigation because the USITC found that its locking technology did not infringe the patent claims asserted.

The other Chinese companies who were using Unilin's locking technology were ordered to pay $100,000 to $120,000 in royalties and $0.65 in royalties per cubic meter to the patent owner, or they would not be allowed to export their glueless laminate flooring panels to the US market.

It's estimated that both Unilin and Valinge could earn more than $1 billion in royalties and licensing fees from flooring companies around the world.