Wallace admits infringement for gray market Yanmar tractors Friday, September 10, 2004

Yanmar Company, Ltd. of Japan, a worldwide manufacturer of agricultural equipment, engines and other products, and its Illinois-based subsidiary, Yanmar America Corporation (formerly known as Yanmar Diesel America Corporation), have announced the filing on August 30, 2004 of a settlement of a lawsuit involving the alleged illegal importation of used “gray market” Yanmar® tractors. The Yanmar entities filed suit against Wallace International Trading Company, Inc. of Anderson, California, and its principal, Michael D. Wallace, individually, in the United States District Court for the Eastern District of California, alleging that the defendants facilitated and brokered the importation of used Yanmar® tractors from Japan to the United States which were intended for sale and use only within Japan. Products which are imported into a market not intended by the trademark holder and without its consent are known as “gray market” products. Yanmar claimed that the importation and sale of these used “gray market” tractors without its consent infringed Yanmar’s trademarks and constituted unfair competition because there was a likelihood of confusion between those tractors and the Yanmar® tractors designed and intended for the United States market and sold by Yanmar through authorized United States distribution channels.

Although the Yanmar® tractors designed and intended for the Japanese market (“Japanese Local Market tractors”) complied with applicable Japanese safety standards and regulations, they often do not comply with United States safety standards and regulations, and pose a potential safety risk to unsuspecting United States consumers. The same potential safety risks are posed by Japanese Local Market tractors originally manufactured by Yanmar for the Zen-Noh farm cooperative in Japan bearing both “Zen-Noh” and “Yanmar” labeling, which Wallace was also brokering into the United States. 

As part of the settlement, Wallace, who had a nationwide network of over 30 gray market dealers, admitted to willful and intentional infringement of Yanmar’s trademarks and unfair competition. The settlement terms call for Wallace International to cease and desist its activities, send notices of its dissolution to all of its dealers and to enter into a permanent injunction binding Wallace International and Mr. Wallace individually, precluding engagement in these activities in the future. The settlement also requires that Wallace post a link to the settlement’s Consent Order, Judgment and Permanent Injunction on Wallace’s former website, together with a link to Yanmar’s “Important Safety Notice” concerning gray market [which can be viewed by visiting www.yanmar.com].

Yanmar continues to oppose gray market importation in order to protect consumer safety and Yanmar’s own trademarks and reputation. Any questions concerning Yanmar’s continuing efforts in this regard or about the settlement with Wallace should be referred to Ryan M. Pott, Esq., Corporate Counsel, North America Operations, Yanmar America Corporation, 101 International Parkway, Adairsville, Georgia 30103, (770) 877-9894.

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