Alexandria attorneys Bassam Ibrahim, Lloyd Smith and Bryce Maynard recently won a major victory in the United States Court of Appeals for the Federal Circuit for client Deere & Company in a long-running battle over the importation of gray market agricultural equipment.

The case dates back to 2003, when Deere filed a complaint with the International Trade Commission ("ITC") regarding the importation and sale of "European version" forage harvesters that were intended solely for sale in Europe and had different features than the features that consumers in the United States were accustomed to receiving on Deere forage harvesters. Deere alleged that these unauthorized sales infringed Deere's JOHN DEERE and leaping deer logo trademarks. The ITC originally ruled in favor of Deere in 2004, finding that the European version machines were "materially different" than Deere's North American machines, and issued an order barring the further importation and sale of the European version products.

However, the Federal Circuit reversed the ITC's decision in 2006, because the law changed while the case was on appeal. Under the new standard, a trademark owner such as Deere seeking to bar the importation of grey market products had to show that "all or substantially all" of the products it sold in the U.S. had the features lacking on the grey market machines. The case went back to the ITC, where the Administrative Law Judge found that Deere had met the "all or substantially all" test. However, the full ITC applied an erroneous version of the test and ruled against Deere.

Deere then appealed to the Federal Circuit, which ruled in favor of Deere in 2010 and reversed the ITC's decision. The court remanded to the ITC once again, and gave very specific instructions as to what Deere needed to show in order to prevail on the remand. Specifically, the only issue before the ITC on remand was whether the percentage of Deere's forage harvester sales in the United States that were of the "North American version"- 96.6 to 96.9 percent - was "all or substantially all" of Deere's total U.S. forage harvester sales.

On the second remand, the Commission correctly applied the "all or substantially all" test and concluded that "substantially all" of Deere's forage harvester sales had been of the North American version, and that Deere was thus entitled to seek relief against the importation and sale of the materially different grey market products. The Commission therefore re-instated the general exclusion order that had originally been granted.

However, the respondents in the case once again appealed to the Federal Circuit in early 2012. This time, the respondents argued that in addition to meeting the "all or substantially all" test, Deere was also required to show that its marks had been "diminished in value" as a result of the grey market sales. Deere argued that there was no such separate "diminishment in value" requirement, and that even if there was such a requirement, it had been satisfied.

The Federal Circuit held oral arguments in early February 2013, and issued its decision affirming the Commission's decision on February 20, 2013. This decision represents a major victory for Deere in its efforts to protect U.S. consumers, since consumers who buy a Deere forage harvester can now be assured that the product will have all of the features and options that consumers in the United States have come to expect from Deere's agricultural equipment.