Griggs sues Li & Fung over use of RTA technology
April 4, 2013-- Furniture Today,
NASHVILLE, Tenn. — Furniture retailer and inventor Billy Joe Griggs has sued multinational giant Li & Fung in U.S. District Court here, claiming the company is illegally producing sofas in China that incorporate his proprietary ready-to-assemble technology.
Griggs has accused Li & Fung subsidiary LF Products of breaching a confidentiality agreement signed in February 2012 and making product samples using his technology after it had ended negotiations on a licensing agreement.
In court documents filed here, Griggs says LF Products "abruptly walked away" from the licensing negotiations in June 2012, but then made product samples at a Chinese factory that were shown to three major U.S. retailers in August and September.
"LF never intended to purchase a license from Plaintiffs, and the negotiations were a pretext to obtain Plaintiff's confidential and proprietary information before any of Plaintiff's products were introduced into the market, and gain an unfair competitive advantage," Griggs said in a court filing.
The lawsuit said that Griggs earlier signed a licensing agreement with Mississippi-based upholstery producer Albany Inds. "to assist with the production and use" of the RTA technology.
Albany President Richie McLarty and LF Products executive Kevin Gallagher visited LF-affiliated factories in China in May 2012, and a U.S.-built sample of Griggs' RTA sofa was sent to LF's office in Hangzhou, China, during their visit, the suit claims.
It was shortly after that trip that LF Products backed out of the licensing negotiations. The lawsuit claims LF then produced its own samples at a factory in Haining, China, and showed them to Sam's Club representatives in Dongguan, China, in August 2012.
The following month, according to the suit, sample sofas were sent to the U.S. for retailers American Signature and Big Lots.
In addition, the suit claims that samples incorporating the technology were displayed at a furniture trade show in Shanghai last August.
Specifically, Griggs is suing LF Products for breach of contract, misappropriation of proprietary information, interference with business relations, and breach of covenant and fair dealing. He is asking the court to issue preliminary and permanent injunctions prohibiting the company from producing the sofas, as well as monetary damages and disgorgement of profits earned from their sale.
According to court records, Li & Fung has not filed a response to the suit, and a Li & Fung representative could not be reached for comment by Furniture/Today.
Related Content By Author
FT/tv: Market madness: an inside view from F/T