In the ongoing fight by Canon USA against certain gray market retailers, we now have another response from more named defendants in the F & E Trading, LLC lawsuit.
In the last update of Canon v. Gray Market Retailers, a New York company whose name is also “F & E Trading, LLC” responded to Canon’s Amended Complaint. In this latest response, it appears that some of the procedural confusion has been sorted out based on the content of this Answer in the context of the rest of the court docket.
In short, it appears that F & E Trading, LLC used to do business as a New York LLC. In 2010, that company, which sold the gray market goods in question, moved its operations to New Jersey and formed a New Jersey, LLC. At some point after that company moved to New Jersey, another company (which may or may not be somehow related) started operating in New York under the name F & E Trading, LLC.
And so, it appears that the company Canon USA is really after is the current New Jersey company, F & E Trading, LLC (“F&E NJ”). It’s always a good idea to get the right defendant. We’ll see if Canon ends up dismissing its complaint against the NY company shortly….
In terms of the meat of the F&E NJ’s response, it largely mirrors what we saw by Get It Digital’s response in its prior Answer. Other than essentially denying all wrongdoing, F&E NJ also cites the following defenses:
- Lack of personal jurisdiction (a procedural pre-requisite to suing a person or company)
- Failure to state a claim upon which relief can be granted (That is, even if everything Canon says were taken as true, none of it alleges a wrongdoing that Canon can sue F&E NJ for.)
- First sale doctrine
- Doctrines of laches, acquiescence and unclean hands
- Doctrines of waiver and estoppel
We covered the first sale doctrine, laches and estoppel in the article on Get It Digital’s response, so read it again if you want a refresher. Notably, we see the reference to unclean hands raised again.
It was briefly mentioned in Get It Digital’s answer with some facts that look bad for Canon. Specifically, Get It Digital alleged that “Canon USA, Inc. was aware that [Get It Digital] openly and notoriously resold goods bearing the Canon mark that they had purchased from Canon authorized dealers.” And that Canon “actively condoned the resale and transshipment of Canon-branded products from Canon authorized dealers to other resellers.”
These are some pretty juicy facts that could be a problem for Canon as this case moves forward. We’ll look toward upcoming motions for summary judgment, which should include affidavits and deposition references to these facts.
What About Albert Houllou?
Recall that Albert Houllou was a key target in Canon’s Amended complaint against F&E NJ. Houllou appears to be the principal owner/operator of F & E Trading. Canon USA wants to cut off the head, so it named him individually in the lawsuit. This is a common tactic that we previously covered.
Houllou never filed an official response to the lawsuit. Instead, because of the timing of Canon’s Amended Complaint that targeted Houllou, his attorneys wrote the court a letter requesting more time to respond with a motion to dismiss him from the lawsuit since Canon should be targeting the company and not the individual.
The judge granted Houllou’s request and is allowing his attorneys to file his motion to dismiss. Houllou’s attorneys have a solid argument as to why he should not be part of this case absent further and more specific allegations by Canon USA of Houllou’s wrongdoing.
This is a critical first battle for F&E NJ and Houllou. If Canon can keep his head on the chopping block, the stakes are so much higher (especially if he is, in fact, the CEO and primary owner of F&E NJ) and the pressure to settle is further magnified.
You can read the full court documents of F&E NJ’s Answer and Hollou’s attorney’s letter embedded below. Additionally, you can catch up here on the other case updates and read more background on gray market cameras.
Thanks for the knowledgeable updates
Personally I think Canon are being stupid here. These Grey Market Cameras are actual real Cameras make by Canon Japan that have come in from other jurisdictions like South America or perhaps Europe as an example.
Buyers of cameras from Canon sign agreements that they will NOT sell the Cameras in other markets.
If a Camera was purchased by say Canon France and they sign NOT to sell in other markets, and their cameras end up in the U.S., then Canon should sue Canon France. Done. If Canon France has agreements from all their buyers not to sell to other markets, which one was that?
They all have serial numbers, they are easy to trace. Done.
Note that the financial losses are very small. The difference in price from a grey market camera and a legit camera is minimal. In either case Canon Japan sold the cameras. Whats the loss? The price differences at wholesale?? Cant be too much.
Note that Canon U.S. has not lost any moneys on warranties as the grey market ones have no warranties by Canon U.S.
I love my Canon products but fail to understand why Canon is taking this route when they have better options.
A big question is why are the prices so much hire in the US than the rest of the world? I used to travel to Germany a lot and I saw the prices of camera’s were much cheaper than here in the US and the prices included 25% VAT and the currency differential.
Even out the prices and the Grey market would disappear.
Eric Reagan says
A big part of the problem with US pricing is Canon USA’s MAP policy, which handcuffs authorized Canon USA resellers on competing with each other on the basis of price. It essentially boils down to price fixing from Canon USA and it is, unfortunately, totally legal in the US. Take a look at the gray market background article for more on this topic.
So their own price fixing is the problem then. Grey market wouldn’t exist without it.
I have also notice that Canon in Africa and even in Europe spends more money on promoting “Photography” via helping out smaller photographic groups and organizations that host Photo Clubs and Photo related events. In both Canada and the U.S. its difficult getting any involvement at smaller local levels. In Africa at the previous large Photo Competition the prize was a Toyota Land Rover paid for by Canon. In the U.S. it all goes to pro sports events it seems like.
They need to have a better look at who actually buys their products and should invest in the photography community.