Favelle Favco has won its legal battle against Danny Davis, the former president of its USA operations.

A US district court ruled on 8 March that Favco USA is the rightful owner of a crane design patent and all related drawings, and not Davis.

At the same time Davis lost his suit against Favco alleging that by continuing to build cranes it was infringing ‘his’ patent.

The dispute dates back to the founding of the US subsidiary of Muhibbah Engineering (IM) Bhd. Davis won the backing of the Malaysian company to set up a crane manufacturing operation in Harlingen Texas, producing cranes based on familiar Caterpillar excavator bodies and components. Favelle Favco Cranes (USA) Inc was established with Favelle Favco Holdings as 90% owner and Davis owning 10%. The row began when Davis applied for, and secured, a design patent in his own name rather than the company’s.

The Southern District of Texas Brownsville Division ruled in favour of Favelle Favco. The court ordered Davis to assign the patent for the cranes’ designs to Favelle Favco and it ruled that all design drawings, trade secrets and other confidential information related to the crane design legally belong to Favelle Favco.

Robin Ferree, Favco USA’s vice president for sales commented after the ruling: “While it has been business as usual at Favco USA, we believe that legal proceedings may have caused some potential dealers and customers to be cautious. We are pleased with the ruling; it was fair and correct, as we expected it would be. Now we can place our full attention and efforts to growing our crawler, tower and offshore crane business. We now have a number of crawler crane units in the field in the USA and Europe.” The court ruling states that Davis put his name to the patent application while he was a fiduciary officer of Favco USA and as such he was in breach of his fiduciary duty. Davis had done conceptual work on the crawler crane design while at his former employer, Manitowoc. But he did not have the engineering expertise to produce engineering designs. The engineers that produced the detail crane designs necessary for the patent were contracted to Favco USA, not to Davis. “FFC USA paid for every aspect of the entire crawler crane project. All work done on the crawler cranes was done after Mr Davis became president and managing director of FFC USA,” the ruling states.”Without a contract providing otherwise, as president and managing director, Mr Davis owed FFC USA a fiduciary duty to assign the patent.” The ruling also states that the shareholders agreement between the two parties was never anything more than a draft document. It was not signed by a Favelle Favco representative, had no start date, and had a covering letter from Favco to Davis saying that the draft documents had still to be reviewed by US lawyers.

Danny Davis was not available for comment.