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Thomas Russell

ITC blocks import of alleged knockoffs of Twin-Star designs

WASHINGTON, D.C. - The U.S. International Trade Commission has issued an order that prohibits the unlicensed entry of imported electric fireplace units that are allegedly infringing on copyrights secured by Twin-Star International.

The fireplace units are produced by Chinese manufacturer Shenzhen Reliap Industrial Co. The order also names Yue Qui Sheng, a former Twin-Star employee, and Whalen Furniture, which has been named as an importer of similar units from Reliap.

The order aims to prevent the import of electric fireplaces that infringe on four copyrights obtained by Twin-Star, an importer that sells fireplaces, home entertainment consoles and home office furniture.

The matter dates from a complaint Twin-Star filed with the ITC in June 2011 that claimed Yue brought trade secrets to a competitor. The complaint said that Yue worked for Twin-Star since December 2003 and was a shareholder of company parent TS Investment Holding Corp. since July 2007. He left the company by May 2010, the complaint said.

While he was with the company, Yue was involved in the manufacture of Twin-Star kinetic sculptures that include log sets, ember beds, grates and flames - original sculptures protected by copyright.

Twin-Star said it believes that Yue brought confidential trade secrets to Reliap, which it believes began producing similar fireplace units at its Shenzhen factory in June 2010, several months after the company believes Yue actually began working there. Reliap sells to some of the same retail customers as Twin-Star, according to the complaint.

Twin-Star said it filed its complaint with the ITC to protect its investment in the development of these units, which are designed, engineered, refurbished and distributed from its headquarters in Delray Beach, Fla.

The company said the misappropriation of trade secrets is causing injury to its domestic operations by forcing it to compete against the unauthorized use of its own intellectual property. The complaint said this, in turn, could force it to lower prices of its own units, which could affect its own return on investment and ability to maintain its domestic work force.

As part of its order, the ITC is requiring a temporary bond of 145% on the value of the units, which would allow them to be imported for a short period while the order awaits final approval from President Obama's office. This expense is ultimately paid by the importer of record unless the company works out a deal with the manufacturer to cover the expense.

Bill Caples, Twin-Star vice president of sales and marketing, said he was unable to comment on the matter. Officials with Whalen were not immediately available for comment.

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