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Neway Valve Co. Charged with Piracy

The company was charged by Oklahoma for "legitimately and unlawfully reduced their production costs by illegally obtaining copyrighted software that is crucial to the production and sale of their products."

Oklahoma Attorney General E. Scott Pruitt on March 14 filed an antitrust lawsuit against Neway Valve Co., a Chinese oil and gas equipment maker, claiming it sells valve components at artificially low prices using pirated manufacturing software.

"In an industry characterized by thin margins, defendants have illegitimately and unlawfully reduced their production costs by illegally obtaining copyrighted software that is crucial to the production and sale of their products," the complaint states, according to courthousenews.com.

Oklahoma claims Neway Valve is able to sell its components for 13% less than Oklahoma-based manufacturers due to the piracy.

Based on investigation done by the state in 2003, Neway customers include Shell, ExxonMobil and Chevron.

The complaint states that it “believes that Neway uses between 1,300 and 1,400 desktop computers and laptops in its Chinese facilities. Despite this number, one U.S. software company confirms that defendants had purchased only 380 software licenses for use in their computers. ... Defendants are believed to have avoided purchasing an estimated $280,000 to $367,000 worth of licenses for just that one piece of software."

Neway Valve president Davis Standefer told Courthouse News the company is investigating the complaint. "The team at Neway wants to get to the bottom of this situation and ensure that our manufacturing facilities are doing what they are supposed to be doing," Standefer said Friday. "As we get more information, we will keep you informed."

Oklahoma seeks actual damages and injunctive relief for violations of the Oklahoma Deceptive Trade Practices Act, the Oklahoma Antitrust Reform Act and for unfair competition. It is represented by First Assistant Attorney General Thomas A. Bates.

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