We continue our series that explains why there are so many orange tractors labeled as ZEN-NOH to be found in the United States and places outside of Japan. If you have not read Part 1 or Part 2 that reading is recommended to bring a reader up to speed.
We last left off where Wallace International Trading had established a supplier network for the importation of used compact Kubotas from Japan. Wallace brought in container loads of compact tractors and disbursed them among his distribution network. The idea caught on and demand was up – these used units were low-hour, high quality and in some cases less than half the price of new Kubota equipment!
The sudden arrival of competitive units from Japan attracted the attention of local brick and motor Kubota dealerships who found themselves in a tough spot to compete. In 1996 they banded together and pushed Kubota corporate to act… and act they did with three legal mechanisms:
- a trademark infringement case
- a general exclusion order by the United States International Trade Commission
- a cease and desist order
This case was known as Kubota Tractor Corp V. Wallace International Trading and was a landmark legal case. Kubota claimed that as owners of the trademarks, namely the KUBOTA block letter stylized design font, the stylized letter K, and their classic Gear and Pipe logo had their intellectual property rights infringed upon.
Kubota asserted that they had not consented to the use of the trademark blazoned across the hoods of all those used imported tractors, and furthermore, these imported tractors were materially different that the models sold by their authorized dealers in the US.
General Exclusion Order
Kubota and Wallace argued back and forth on the merits of the trademarks, but by February 1997 Kubota handily won the infringement case. On the heels of that victory they asked for and were granted a General Exclusion Order by the United States International Trade Commission (UCITC). We have saved a copy of the full general exclusion order labeled “Certain Agricultural Tractors Under 50 Power Take-Off Horsepower” for your reading pleasure here.
There is a lot of legalese in the commission’s order but the portion that would eventually lead to the blockade of further importation of the kind Wallace International was performing would be in this excerpt:
The commission had excluded any Kubota-manufactured tractors, under 50 PTO horsepower, from ever entering the United States without Kubota’s express permission or under license agreement. This big hammer legal move would not only prevent Wallace International Trading from importing any used Kubota tractors with their trademark name on it, but any future entity from ever importing a Kubota trademark branded tractor.
The United States Customs and Border Services were notified and advised that if a shipping manifest contained the words USED KUBOTA TRACTORS anywhere on the documents the shipment was blacklisted and quarantined. Shipments held in this manner by Border Services would either be turned around at the port or seized and destroyed.
Cease and Desist Order
Kubota’s legal team was not through with Mike Wallace. They asked for and received a Cease and Desist Order against Wallace and his loose knit band of dealers preventing them from selling any unsold Kubota trademark-branded tractors still in their inventories. The distributors in Wallace’s network were not allowed to sell the equipment they had imported and had sitting on their lots! Under the terms of the cease and desist order these tractors had to be either destroyed, exported, dismantled for parts or sold as scrap metal.
It was a three-pack of legal resolve that included a trademark infringement case and subsequent general exclusion and cease and desist orders. Kubota’s legal team had effectively put the brakes on Wallace International Trading and their days of importing used Kubota tractors. Or so they thought.
A Loophole is Found
Some will say nothing ruins a friendship faster than dragging everyone into a court room! 10 days in legal hell put the strain on the once profitable and successful Wallace/Gamut business relationship, splitting them up at least for a while. You will remember Gamut Trading as one of the original distributors in the distribution network Wallace organized.
Returning to Apple Valley California, the then directors of Gamut had to comply with a section of the cease and desist order by listing and indicating any unsold Kubota tractors still in their yard. It can be speculated that at this time they took renewed interest in a few orange tractors bearing the ZEN-NOH name on the sides of the hoods instead of the usual Kubota trademark name.
They had seen that ZEN-NOH name plenty of times before as they had taken delivery of many ZEN-NOH labeled Yanmar and Kubota tractors in the past. Noticing this detail would take on a life of its own.
The ZEN-NOH name was not part of the trademark infringement suit Kubota had brought and won against them. ZEN-NOH trademark name was not mentioned in either the general expulsion or cease and desist orders! Gamut Trading had stumbled upon a loop hole in Kubota’s trademark infringement suit – they could not distribute Kubota equipment but, ZEN-NOH tractors were fair game! If they could continue to get their hands on ZEN-NOH equipment maybe it would be business as usual…
Up Next, Back in Business!
Up next we look at how Gamut Trading, one of the original distributors of imported Kubota equipment, discovered and used a legal loophole to revive its importation business with… interesting results. Click here to read part 4.
Service Department Vic