U.S. International Trade Commission rules against dealers

By MATEUSZ PERKOWSKI

Capital Press

The federal government has banned machinery dealers from importing and selling European versions of forage harvesters from Deere & Co.

The decision stems from a long-running dispute between Deere and several independent dealers over the so-called "gray market" for the company's farm machinery.

After a protracted legal battle, the U.S. International Trade Commission has voted to exclude the equipment from sale in the United States unless Deere authorizes it.

The commission issued cease-and-desist orders to several dealers that wanted to sell the machinery, siding with Deere's view that European-version harvesters are "materially different" from those authorized for sale in the U.S.

The ruling marks the second time the agency has banned imports of gray-market harvesters.

Deere initially filed a complaint with the U.S. International Trade Commission in 2003, accusing the dealers of infringing on the company's trademarks by selling tractors in the U.S. that were intended for the European market.

Harvesters intended for the European market sold for about $60,000 less than the U.S. version, didn't have the same safety and pollution controls and "may have weaker structural components," the company claimed.

The company alleged the machines "were imported into the United States without Deere's knowledge or consent," undermining its brand, according to the complaint.

Independent dealers involved in the controversy -- Bourdeau Brothers, OK Enterprises and Sunova Implement -- countered that Deere simply wanted to suppress competition, since its own dealers were also importing the European-version harvesters.

The federal government agreed with Deere in a 2004 ruling, but was ordered to reconsider that decision by a federal appeals court in 2006. Two years later, the agency changed its mind and allowed the imports.

According to the ITC, more than half of the European-version harvesters sold in the U.S. were marketed through official Deere dealers.

Deere appealed the lifting of the ban and a federal appeals court once again overturned the agency's decision in 2010.

If "all or substantially all" of the harvesters sold by Deere in the U.S. were not of the European version, the company could still prove trademark infringement, the court ruled.

The ITC has now found that Deere met that standard, validating its claims of gray market violations by independent dealers.