U.S. International Trade Commission Judge Rules in Favor of Knowles in Trade Secret Theft Case Against Bellsing

Rhea-AI Summary

Knowles Corporation (NYSE: KN) announced a significant legal victory as ITC Judge Charles E. Bullock found Shenzhen Bellsing Acoustic Technology misappropriated its trade secrets. The 129-page ruling recommended a 26-year exclusion order preventing Bellsing from importing devices using Knowles' technology, including hearing aids and headsets. Additionally, a cease and desist order was suggested against Bellsing and its founder. Knowles' CEO emphasized their commitment to protecting intellectual property, highlighting the company’s extensive R&D investments.

Positive

• ITC Judge Bullock’s ruling confirms Knowles' trade secrets were misappropriated, validating its IP protection efforts.
• The recommended 26-year exclusion order would significantly limit Bellsing’s ability to compete in the U.S. market.

Negative

• None.

Knowles Corporation (NYSE: KN), a market leader and global provider of advanced micro-acoustic microphones and speakers, audio processing, and precision device solutions, today announced that ITC Chief Administrative Law Judge Charles E. Bullock issued an Initial Determination (ID) in ITC Investigation No. 337-TA-1186 finding that the Chinese electro-acoustic transducer manufacturer Shenzhen Bellsing Acoustic Technology Co., Ltd, its affiliated companies and its founder, Liang (Ryan) Li, misappropriated Knowles’ trade secrets in violation of Section 337 of the Tariff Act of 1930. In a 129-page decision, the Chief Judge found that Bellsing’s and Li’s “use of Knowles’ trade secrets is extensive” and that Bellsing relies on misappropriated Knowles trade secrets to design and manufacture balanced armature (BA) devices.

"We are pleased with Chief Judge Bullock’s ID acknowledging that Bellsing balanced armature devices utilize technology stolen from Knowles. Knowles has a long history of significant investment in R&D and new innovative products and we will vigorously protect our intellectual property,” said Jeffrey Niew, president and chief executive officer of Knowles.

Chief Judge Bullock’s ID recommended two significant remedies in favor of Knowles, including imposing a 26-year long general exclusion order barring the importation into the United States of Bellsing balanced armature devices that are made with, use, or benefit from Knowles’ trade secrets, as well as any downstream products, regardless of source, containing the offending Bellsing devices, such as hearing aids and wireless headsets. This would include BA devices made by or made for companies owned by, controlled by, or affiliated with Ryan Li. The Chief Judge also recommended a complementary cease and desist order barring Bellsing and Mr. Li from, among other things, making further sales of the offending Bellsing devices for importation into or within the United States.

“Given Bellsing’s blatant disregard for our intellectual property and history of unfair acts in connection with the use of our balanced armature technology, we believe the remedies recommended by the Chief Judge are appropriate,” said Robert Perna, senior vice president and general counsel for Knowles.

Chief Judge Bullock’s ID and recommendation on remedies are subject to review by the ITC, and a final determination by the ITC is expected in the next several months.

About Knowles

Knowles Corporation (NYSE: KN) is a market leader and global provider of advanced micro-acoustic microphones and speakers, audio processing, and precision device solutions, serving the consumer electronics, communications, medtech, defense, electric vehicle, and industrial markets. Knowles uses its leading position in SiSonic™ MEMS (micro-electro-mechanical systems) microphones and strong capabilities in audio processing technologies to optimize audio systems and improve the user experience in mobile, ear, and IoT applications. Knowles is also the leader in acoustic components, high-end capacitors and mmWave RF solutions for a diverse set of markets. Knowles’ focus on the customer, combined with unique technology, proprietary manufacturing techniques, rigorous testing, and global scale, enables it to deliver innovative solutions that optimize the user experience. Founded in 1946 and headquartered in Itasca, Illinois, Knowles is a global organization with employees in over a dozen countries. The company continues to invest in high value solutions to diversify its revenue and increase exposure to high growth markets. For more information, visit knowles.com.

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FAQ

What did the ITC Initial Determination say about Knowles Corporation and Shenzhen Bellsing?

The ITC Initial Determination found that Shenzhen Bellsing Acoustic Technology misappropriated Knowles' trade secrets, impacting their ability to compete.

What remedies were recommended for Knowles Corporation in the ITC ruling?

The ruling suggested a 26-year exclusion order barring Bellsing from importing devices using Knowles’ trade secrets and a cease and desist order.

How does the ITC ruling impact Knowles' stock performance (KN)?

The ruling may positively affect Knowles' stock performance by reinforcing its intellectual property rights and limiting competition from Bellsing.

When can we expect the final determination from the ITC regarding Knowles Corporation?

A final determination by the ITC regarding the case is expected in the next several months.

What technology was misappropriated from Knowles Corporation?

The misappropriated technology pertains to balanced armature devices used in audio equipment.