ZEN-NOH and Kubota Part 4: Loopholes
An amaturish looking ZEN-NOH label on this Kubota tractor. Work of replacing Kubota hood decals at the export dock in Japan to satisfy US import requirements? We can only speculate of course.
This is the fourth of five installments that examine the history of ZEN-NOH equipment in North America and how these tractors came to be found in such great numbers. If you are just jumping into this series now, please review Part 1, Part 2 and Part 3 to give yourself some background information.
We last left off with Gamut Trading heading back to Apple Valley California in an effort to comply with the cease and desist order as a result of losing a trademark infringement case brought by Kubota. Part of the cease and desist order’s conditions were that existing Kubota equipment on the lots of the distribution network had to be 1) exported out of the country 2) parted out or 3) sold for scrap metal.
It was about this time, pondering these three alternatives for the equipment they had paid for, that Gamut realized that the trademark case only covered the Kubota name, not ZEN-NOH that they had seen all over the hoods and grille of ZEN-NOH branded Kubotas they had imported. This made them realize that they might be able to import and distribute ZEN-NOH equipment instead! A loophole around the court orders!
Back in Business
What a break! Ronald DePue and his brother Darrel were Chairman of the Board and CFO of Gamut Trading at the time. They performed a check at the United States Trademark Office and found that the trademark ZEN-NOH was available. The name was previously registered and owned in the United States by ZEN-NOH of Japan themselves. In 1988 in a weird twist of fate, ZEN-NOH failed to renew the trademark name leaving it available for adoption by Gamut Trading!
The original trademark registration filed by ZEN-NOH in the early 1980s. They let it expire in 1988 which left it open for Gamut Trading to pick up nearly 10 years later.
In March 1997 less than three weeks after Kubota’s legal dropped the hammer on them, Gamut Trading bought the ZEN-NOH trademark and name. They became the new owners of the brand for $245. They indicated on their trademark application that they were users of the ZEN-NOH trademark since 1986, long before they had probably even seen a ZEN-NOH tractor. We have a copy of Gamut’s full trademark application which you can see here.
A cover letter dated March 11th from Gamut's lawyer sent to the United States Trademark Office.
A copy of Gamut Trading's awarded trademark for ZEN-NOH, dated March 14, 1997 - about 3 weeks after losing the trademark infrindgement case to Kubota.
In a legal move that now sounds strangely familiar – Gamut Trading also registered the name ZEN-NOH with United States Customs and Border Security to prevent any other entity from importing a used tractor from Japan bearing their trademark, ZEN-NOH. Kubota’s lawyers had schooled them in court and they were obviously paying attention to the lessons!
Even as Gamut was proceeding with an appeal against the USITC general exclusion order they had become the registered legal owners of the ZEN-NOH trademark. This would allow them to import all the ZEN-NOH branded tractors they could get their hands on, regardless of whether they were made by Yanmar or Kubota. Plus, as the new owner of the trademark, they could for a fee, sell a licensing agreement to future tractor importers or resellers wanting in on this still emerging market. Brilliant!
Kubota Strikes Back – Again
It is not known whether Gamut Trading actually instructed their export suppliers to remove the offending Kubota hood decals, but, as the new owners of the ZEN-NOH trademark and name brand, Gamut resumed importing used Kubota Tractors almost immediately after being served with the original cease and desist.
Between February 1997 and October 1998 Gamut continued to import used Kubota tractors. On 56 different shipments the tractors were identified as ZEN-NOH L and B Series Tractors on the customs declarations paperwork. The Border Services could not turn them away because there was no violation here – ZEN-NOH tractors were free to enter the United States.
When these ZEN-NOH tractors finally cleared customs, Gamut knew that their resellers would not want a no-name unheard of tractor brand. Gamut routinely advertised their tractors as Kubota/Zennoh tractors, stressing that the tractors are the same thing. They went as far as to supply new Kubota hood decals including instructions on how and where to install them!
Little did brothers Ron and Darrel of Gamut know, but, Kubota coporate was already onto their operation. Kubota hired private investigators posing as prospective tractor resellers, recording phone conversations and obtaining wire taps. The end was near.
A ZEN-NOH L1501 in decent shape.
Sued Into the Stone Age
When the dust settled on round two of the legal battle, Gamut was fined in excess of $2.3 million USD and found in violation of the original cease and desist order placed upon them by the USITC in February 1997. Kubota was seeking a penalty in the $6.9 million range, but since the directors of Gamut had willingly destroyed so many boxes of files and records pertaining to the importation of these tractors, the deciding Judge could only base the penalty amount on the information the investigators could find. We have a copy of the formal proceedings of Kubota Corp V. Gamut Trading et al available here.
Up Next, Fallout
After the lawsuits flew where did the chips fall? What did these players do afterward and what are they doing today? What impact did importing these tractors have? We answer these questions and provide a handy timeline of the whole puzzle in our upcoming and final segment of this series.
Service Department Vic
Related Articles
Gamut Trading ZEN-NOH Trademark Application
USITC Kubota Exclusion Order
Kubota Corp V. Gamut Trading et al
ZEN-NOH and Kubota Part 1: A Partnership
ZEN-NOH and Kubota Part 2: Importation
ZEN-NOH and Kubota Part 3: Lawsuits
ZEN-NOH and Kubota Part 5: Fallout
