It’s been quite some time since I reported an update in Canon USA’s attack on gray market retailers. A few things have happened since then, including the dismissal of Canon’s case against the ebay seller Get It Digital.
If you aren’t up to speed on the Canon USA v. Gray Market Retailer cases, check out the primer here, which includes a list of links to all the subsequent updates.
Now, before we all get too happy about Canon’s case against “Get It Digital” being dismissed and the free-flow of cheaper gray market cameras in the US, let’s read between the lines for a better idea of what really happened.
Back in February, I reported on an old case between Olympus and F & E Trading, LLC.
The alleged facts against F & E Trading were much milder than what Canon alleges in the current lawsuit. The crux of Olympus’ case centered around simply importing cameras from Asia for sale in the US, which allegedly violated trademark law. The legitimacy of such legal conclusions in Olympus’ lawsuit are somewhat questionable; however, those claims were not challenged.
In the Olympus lawsuit, F & E Trading never filed a response and settled out of court.
This case and its settlement agreement, I think, inform us quite a bit about the nature of the Get It Digital case and settlement.
Generally, the terms of these settlement agreements are not a part of the court record or otherwise made available to the public. However, I was able to obtain a copy of the Olympus and F & E Trading settlement agreement to give us a peek behind the curtain of just how devastating the terms were to F & E’s business as a gray market importer of Olympus cameras.
As I previously noted, these were essentially the same goals Canon USA has in the lawsuits against both Get It Digital and F & E Trading. Now, it looks like Canon has reached similar terms with Get It Digital, LLC, which is the stipulation that has led to the dismissal of the lawsuit.
We left off earlier this year with Canon and Get It Digital in the early parts of the discovery phase, which can get very expensive for both parties. Obviously, Canon has much deeper pockets than Get It Digital, which may or may not have played into the decision. Both parties entered a stipulation of dismissal “with prejudice” in late May. The court entered an order dismissing the case on June 1, 2016.
The dismissal “with prejudice” is the red herring that there was a settlement agreement between the two parties. Otherwise, Canon would have simply dismissed the case without prejudice – meaning that it could re-open the case at a later date for any given reason. Get It Digital wanted the case closed without the option for Canon to re-file and that would have been part of the terms of the settlement. As long as Get It Digital lives up to end of the settlement agreement (i.e., stops selling gray market cameras), Canon won’t sue it again.
Additional evidence that the case has settled on Canon’s terms is the fact that Get It Digital and its related companies no longer offer Canon cameras for sale in their ebay stores. I suspect that the terms of the settlement agreement between Get It Digital and Canon USA largely mirror the terms we saw in the Olympus settlement agreement.
For the sake of context, I’ll repeat the key terms from the Olympus settlement agreement here (consider “F&E” as interchangeable with “Get It Digital” and “Olympus” as interchangeable with “Canon”):
- F&E agrees not to sell, advertise, purchase, import, ship, or in any way trade in Olympus products.
- F&E is given about one month to sell off current stock of Olympus products.
- F&E agrees not to disseminate or publish false or deceptive statements about Olympus or its products.
- F&E agrees to pay an unknown amount of money to Olympus.
- F&E agrees to provide Olympus with all sources and contact info of sources that relate to its purchase of Olympus products over the previous two years.
- F&E agrees to provide a list of Olympus inventory, along with serial numbers for E-M1, E-M10 and Stylus 1 cameras.
- F&E agrees to provide a list of any and all affiliates related to F&E.
- The settlement agreement is binding on F&E’s principals, trustees, directors, officers, employees, parent companies and affiliates.
- Strict confidentiality of the terms of the settlement agreement by both F&E and Olympus.
What About Canon v. F & E Trading?
Canon’s lawsuit against the F & E Trading is still ongoing, the parties are locked in a duel of motions to dismiss and counterclaims with no real progress since then. When something significant happens with this case, I’ll update the story. With fourth quarter underway now, I doubt that F & E Trading has any desire to settle since it will likely sell a ton of discounted gray market cameras over the next couple months or so.