Bipartisan congressional trio takes up cause of Germantown firm that won $104 million verdict against Chinese furniture maker

Three members of Wisconsin's congressional delegation have asked federal agencies to investigate the Chinese furniture company facing a $104 million verdict award in a case brought by a Germantown firm, Raffel Systems, LLC.

Sen. Tammy Baldwin, a Democrat, and Republican Reps. Scott Fitzgerald and Glenn Grothman signed letters to the heads of the Consumer Product Safety Commission, the Federal Trade Commission and the U.S. International Trade Commission.

"This example of a multinational corporation deploying a calculated and duplicitous assault against a Wisconsin small business highlights the significant challenges that American businesses face from intellectual property theft by bad-faith actors, specifically from China," reads the letter to the U.S. International Trade Commission.

"No American worker should ever have their hard-earned paychecks jeopardized by these kinds of abusive trade practices, and your agency initiating an investigation could prevent Man Wah from continuing its practice of stealing intellectual property from other small businesses across Wisconsin and the country."

Raffel's Germantown headquarters is in Fitzgerald's district, an area formerly represented by Grothman before maps were redrawn. As senator, Baldwin represents the whole state. The office of Sen. Ron Johnson did not return a message asking if he was also asked to sign the letters.

Raffel makes multi-function cupholders that control movements in theater-style seating. In 2018, it sued Man Wah Holdings, LTD, a major customer, after learning Man Wah started using counterfeits of Raffel's products in Man Wah's furniture. The move came to light after the knockoffs began failing in great numbers and retailers and consumers blamed Raffel.

On June 17, after a two-week trial in Milwaukee federal court, a jury found Man Wah had infringed Raffel's patent and trade dress, misappropriated the design and falsely marked copies as Raffel products. It returned one of the largest damage awards in the court's history. Man Wah's American arm, Manwah USA, was also a defendant in the case.

Raffel Systems Executive Chairman Paul Stangl said the company was grateful Baldwin, Fitzgerald and Grothman see the "importance of protecting intellectual property and for working to hold Man Wah accountable for its unfair, anti-competitive behavior."

Since the verdict, Man Wah has filed motions for judgment as a matter of law, for a new trial and for a reduction in the damages, most of which are punitive damages that Man Wah says are capped at $2 million.

The motions are pending.

"Though we believe Raffel’s publicity-driven push for an investigation is meritless and entirely unwarranted, we are fully prepared to openly discuss our operations with any government authority,” Man Wah USA president Gabriele Natele said when Raffel said it planned to ask for the agencies to investigate.

Raffel hired Lanny Davis, a Washington, D.C., insider and former counsel to President Barack Obama, to lead the effort to get the regulatory agencies to look into Man Wah. Davis said if the agencies find violations, they could impose sanctions, such as fines or even ban further imports by Man Wah or recall dangerous products.

Contact Bruce Vielmetti at (414) 224-2187 or bvielmetti@jrn.com. Follow him on Twitter at @ProofHearsay.