by The reason: The vagaries of Chinese libel law and a cup holder design lawsuit in the US
Changzhou Jiangxin Zhuju Intelligent Home Furnishing Co., the parent of MotoMotion China, issued this week a correction to its third-quarter 2024 financial report to strike language a court has since determined rises to commercial disparagement of Man Wah Holdings Ltd.
The correction, announced by the company’s board of directors in a public filing, removes two passages from the General Manager’s Address section of the original quarterly report, which was first published on Oct. 29, 2024. The company’s general manager is Xu Meijun, the husband of Xiaoqin Li, MotoMotion’s chairwoman and largest shareholder with a 67% stake in the business, according to several sources online.
Under Chinese law, commercial disparagement, or trade libel as it is called in the U.S., can be found to have occurred when a company spreads false or misleading statements that damage a competitor’s reputation or business interests. The board’s announcement does not detail the court proceeding itself, only that “an effective court judgment” found the quarterly report’s original wording to meet the standard for commercial disparagement.
The first deleted passage described an encounter at a 2024 trade show with Raffel Systems, a U.S. furniture hardware designer and manufacturer based in Germantown, Wisconsin. The original text noted that Raffel representatives had complimented MotoMotion’s booth, but it went on to reference Raffel’s trade dress case against Man Wah in which a jury had awarded Raffel more than $100 million in damages over a “multi-function illuminated cup holder” for upholstered chairs.
The passage also stated that several of the MotoMotion’s retail clients had asked for written assurances that its own cup holders did not infringe on anyone’s intellectual property rights. The corrected version keeps only the pleasantry about the trade show visit and removes references to the litigation and the awarding of damages.
The second passage, describing an Oct. 27, 2024, conversation at the High Point furniture market, alleged that an unnamed “large domestic soft furniture company,” the same company implicated in the Raffel litigation, had again copied a competitor’s product and tried to undercut it on price at the trade fair. That passage, which also referred to the unnamed rival as a “so-called ‘industry leader’” that had failed to learn from an earlier “intellectual property scandal,” has been deleted in its entirety.
The underlying lawsuit
The litigation referenced in the original quarterly report traces back to a June 2022 verdict in the U.S. District Court for the Eastern District of Wisconsin. A jury found that Man Wah, one of the world’s largest furniture manufacturers, had infringed Raffel Systems’ patent and misappropriated its trade dress with a lighted cup holder used in reclining and theater-style seating.
According to reporting by Bruce Vielmetti of the Milwaukee Journal Sentinel in 2022, jurors awarded Raffel roughly $9.3 million in actual damages and $97.5 million in punitive damages after finding that Man Wah had knowingly sold counterfeit cup holders, some even bearing stickers with Raffel’s own patent number, through a separate Chinese supplier starting in 2017.
Man Wah, which reported about $2.7 billion in global revenue in 2021, disputed the size of the award and argued the punitive damages far exceeded what the court’s own instructions allowed. The company maintained it respected intellectual property rights and denied any wrongdoing tied to product safety.
After the court verdict, Raffel’s leadership pressed U.S. regulators, including the Federal Trade Commission and the International Trade Commission, to further investigate Man Wah, framing the case as a small American manufacturer’s struggle against a much larger foreign competitor.
Raffel is owned by Innovative Motion Technologies, a Germantown, Wisconsin-based industrial technology company specializing in interface and control solutions. IMT also is the parent Micro-Air.
Since 1982, Raffel Systems has developed electronic motion controls, comfort-oriented systems and charging solutions for, among other products, motion furniture, industrial products, health care, bedding, hospitality and retail end-market applications.
The correction
In its new filing made Tuesday, Changzhou Jiangxin Zhuju Intelligent Home Furnishing’s board reaffirmed that the remaining, uncorrected portions of the original October 2024 report are accurate and complete. The board also repeated the standard disclosure warranty affirming that its filings contain no false statements, misleading representations or material omissions.
The correction offers no further detail about the underlying court case that triggered it, including which party brought the claim or what remedy, if any, was ordered beyond the retraction itself. Changzhou Jiangxin Zhuju has not issued additional public comment on the matter beyond the text of the correction notice.
Both the filing announcing the correction and the amended 2024 third-quarter report were translated from Mandarin to English by Anthropic’s Claude.
Changzhou Jiangxin Duju Smart Home, which translates also as HHC Group, is known in the U.S. as MotoMotion China, which owns MotoMotion USA, MotoMotion Vietnam and MotoSolutions. A publicly traded company, MotoMotion is what could be called a “white label” powerhouse, previously content being the invisible “smart” engine inside upholstery from famous brands like Natuzzi and Palliser. But, the company now is aggressively promoting its brand name.
MotoMotion is as much a tech company as it is a components or furniture manufacturer. The company specializes in the research, design, development, manufacturing, sale and servicing of “smart” electric sofas, smart electric beds and their core components. The company holds more than 500 U.S. patents and operates its own Surface Mount Technology workshops to produce its own circuit boards.
In a down year for Chinese exports to the U.S., MotoMotion last year reached total sales of 3.4 billion yuan, or about $470 million, according to its public filings after converting to U.S. dollars. That 2025 total was up nearly a third over 2024’s $373 million and nearly 80% over 2023’s $280 million.
MotoMotion acquired Palliser in late May. And so far, MotoMotion has said nothing about its plans for the Canadian powerhouse. We reported here the company’s major restructuring plans with money raised in its IPO in 2021. The board is recommending to shareholders that the company commit fresh capital to building a domestic factory, expand its relatively new Cambodia manufacturing operation, and cut loose four underperforming subsidiaries.
“North America is the world’s largest consumer market for smart homes and the Company’s most crucial strategic market,” MotoMotion noted in the regulatory filing announcing the restructuring plan. “Currently, the existing production bases run under high loads, storage capacity is near saturation, and resources are too scattered to optimize further.”
The commercial disparagement judgment hopefully does not alter Xu’s candor and eloquence in MotoMotion’s public filings. The General Manager’s Address section of these filings is reliably comprehensive, bracingly forthcoming and devoid of puffery or gratuitous self-promotion. Very few quarterly and/or annual reports achieve the same level of explanatory value.
