Canon USA Inc, Suing Get It Digital LLC & Others Over Grey Market Sales

[Canon Rumors]

<p>Canon USA Inc. has filed suit against Get It Digital LLC/AllNewShop on claims of trademark violation from the sale of grey market items over ebay.</p>
<p><a href="http://www.photographybay.com/2015/11/22/canon-is-suing-get-it-digital-and-others-to-stop-gray-market-dslr-sales/" target="_blank">Photography Bay</a> was the first to post the suit, which you <a href="https://dockets.justia.com/docket/new-york/nyedce/2:2015cv06019/376749" target="_blank">can find various places online</a>.</p>
<p>Canon USA Inc. has files two lawsuits, one against Get It Digital LLC & All New Shop LLC, which Canon claims (and we know) are the same company.</p>
<p>The second suit is against F&E Trading LLC, which is the company behind Big Value, Inc., Electronics Valley, Electronics Basket, DavisMax, 6th Ave & Netsales.</p>
<p>The complaints against these companies are as follows as broken down by Photography Bay:</p>
<ul>
<li>Using counterfeit serial numbers on grey market Canon products</li>
<li>Lack of enforceable warranties or inferior warranty coverage</li>
<li>Packaging that does not accurately describe the products contained therein</li>
<li>The inclusion of cheap photocopies of product operating manuals, as opposed to genuine manuals that accompany genuine Canon cameras</li>
<li>Power supplies and accessories that are counterfeit, manufactured by third parties and/or not compliant with applicable laws, regulations and certifications</li>
</ul>
<p>We’re not sure what to make of all of this, as we’ve been advertising these grey market deals since Canon USA instituted MMAP pricing to all the major authorized retailers in the United States. We’ve had very few complaints over the years, most of which were about slow shipping and poor customer service. We stopped advertising for Big Value Inc a while ago, after they botched a big EOS 5D Mark III sale and a lot of people had to get refunds and it was a giant pain for customers. We’ve had less than 5 complaints about Get It Digital and All New Shop over the years and we’ll continue to advertise their deals if there are any this week.</p>
<p>We don’t support MAP pricing and hope Canon USA changes their policy and lets retailers sell products the way they want to. It’s better for consumers in the end.</p>
<p>It’s also going to be interesting to see what happens this week as far as Black Friday sales go, we’re seeing some evidence of authorized dealers getting instant rebates from Canon USA and lowering prices.</p>
<p>You can read more over at <a href="http://www.photographybay.com/2015/11/22/canon-is-suing-get-it-digital-and-others-to-stop-gray-market-dslr-sales/" target="_blank">Photography Bay</a>.</p>

 

[AvTvM]

Re: Canon USA Inc, Suing Get It Digital LLC & Others Over Grey Market Sales

Canon may have legal claims to sue but no moralic right whatsoever. MMAP is unethical corporate behaviour. I hope their law suits will backfire in the worst possible way .. Canon not only losing the suits, but being ordered to end their unethical practices against purchasers of Canon products. Same goes for Nikon, of course. In my country Nikon was just recently fined by the anti-cartel court for illegal price rigging behaviour, ripping off consumers. Would not be surprised if Canon comes under scrutiny next.

 

[Canon Rumors]

Re: Canon USA Inc, Suing Get It Digital LLC & Others Over Grey Market Sales

Canon may have legal claims to sue but no moralic right whatsoever. MMAP is unethical corporate behaviour. I hope their law suits will backfire in the worst possible way .. Canon not only losing the suits, but being ordered to end their unethical practices against purchasers of Canon products. Same goes for Nikon, of course. In my country Nikon was just recently fined by the anti-cartel court for illegal price rigging behaviour, ripping off consumers. Would not be surprised if Canon comes under scrutiny next.

You're absolutely correct. Canon USA created this problem.

 

[Big_Ant_TV_Media]

Re: Canon USA Inc, Suing Get It Digital LLC & Others Over Grey Market Sales

HOW DO U KNOW IF U HAVE FAKE SERIAL # IF NOT CAMERA UNIT?
do they have a site that tell u when ya camera was made or etc

 

[tolusina]

Re: Canon USA Inc, Suing Get It Digital LLC & Others Over Grey Market Sales

Item 1;
Re-read that as a seller assigned serial number.
So what?
How is that Canon's concern?


Item 2;
Buyer beware, or, purchase an extended warrant from a reputable underwriter.
Again, how is that Canon's concern?


Item 3;
Really Canon?
Irrelevant, petty.


Item 4;
Canon does have copyrights on their manuals, the only item on the list with legs.


The gray marketers are dunderheads to leave themselves open here when genuine Canon manuals are readily available for legitimate and legal download.


Item 5;
So what?
- - -
Canon, if you want to close the gray market, eliminate price discrepancies across various worldwide market places.
Canon, stop whining when you sell cheaper in one place and enterprising individuals buy at that price for re-sale elsewhere.
Establish your wholesale prices and leave the retail market alone.
Or, retail exclusively through a corporate outlet.

 

[Loswr]

Re: Canon USA Inc, Suing Get It Digital LLC & Others Over Grey Market Sales

Lack of enforceable warranties or inferior warranty coverage

This is true only if Canon USA chooses to make it true by denying warranty service to gray market items. I wonder if they'll start doing so as part of this? I'd be a bit concerned if I'd bought gray market recently.

 

[HighLowISO]

Re: Canon USA Inc, Suing Get It Digital LLC & Others Over Grey Market Sales

I may have missed a chance to get that 5Ds at a more reasonable price.

Why would they choose to replace the serial numbers? Is that just to hide the origin of these cameras? Someone is suppling the cameras to these sellers. I presume they get the kits complete also, so I find it strange they would replace pieces. I guess they or others could sell sell the originals separately at a higher price?

It would be interesting to know where all these Grey market cameras are coming from. Seems like the heart of the problem is in Japan?

I'm also against MMAP, so I don't have too much sympothy for Canon in this case. I'm guessing Canon USA though must have got as lot of pressure from the big US dealers to address this issue especially since they were so effective at undercutting the price of the top selling items, not to mention the new launch of the 5Ds.

Yes as stated this all stems from Canon USA and their policy changes from years back as the Internet started to become a force in retail sales.

 

[Mt Spokane Photography]

Re: Canon USA Inc, Suing Get It Digital LLC & Others Over Grey Market Sales

A few sellers have received cameras with labels placed over the original Canon label which have a fake serial number. They have been pretty obvious to anyone looking at them. You can check the serial number by looking at EXIF data and compare it with the label. They should match, if not, something is wrong.

Canon or some purchasers have to show damages. I'd expect that Canon has spent a lot of $$ repairing the Cameras, so that could be damage. The non compliant chargers and cords that do not meet safety laws should be dealt with by the FTC. I doubt if the complaint about copies of the manual would stand up, they are not selling manuals, just replacing them with one in English.

It sounds like the gray market sales is hurting Canon. As noted, its Canon's fault for selling cameras for such a low price overseas (or high price in North America). Graymarket sellers can buy them, import them, pay ebay and paypal fees, shipping and losses from defective cameras, and still make a decent profit.

Those who are my age may remember when the US customs seized graymarket cameras or other expensive products that could be bought by mail order from Hong Kong for 25% less. The Hong Kong sellers removed the logos or painted them out, and shipped just the bare camera (and lenses). Customs had no problem with that, since you could not identify the brand. The sellers also mailed any removed logos, owners manuals, etc separately. That was ok with customs since there was no product involved. I still remember the dealer in Hong Kong named T K Wood. I find nothing online, so the business is gone or changed names.

 

[Eagle Eye]

Re: Canon USA Inc, Suing Get It Digital LLC & Others Over Grey Market Sales

Item 1;
Re-read that as a seller assigned serial number.
So what?
How is that Canon's concern?


Item 2;
Buyer beware, or, purchase an extended warrant from a reputable underwriter.
Again, how is that Canon's concern?


Item 3;
Really Canon?
Irrelevant, petty.


Item 4;
Canon does have copyrights on their manuals, the only item on the list with legs.


The gray marketers are dunderheads to leave themselves open here when genuine Canon manuals are readily available for legitimate and legal download.


Item 5;
So what?
- - -
Canon, if you want to close the gray market, eliminate price discrepancies across various worldwide market places.
Canon, stop whining when you sell cheaper in one place and enterprising individuals buy at that price for re-sale elsewhere.
Establish your wholesale prices and leave the retail market alone.
Or, retail exclusively through a corporate outlet.

Not sure where you went to law school, but you must have slept through Property. All five claims have merit in a trademark suit. The proximity to the holiday shopping season is not a surprise; I suspect this will be followed up this week with a Rule 65 motion for a temporary restraining order, immediately barring the defendants from selling Canon products related to the lawsuit.

 

[HighLowISO]

Re: Canon USA Inc, Suing Get It Digital LLC & Others Over Grey Market Sales

This might also be timed to be sure that they halt or slow down these sales as they release the new 1DX and possibly some other bodies.

 

[YuengLinger]

Re: Canon USA Inc, Suing Get It Digital LLC & Others Over Grey Market Sales

I wish the US Supreme Court hadn't ruled in favor of MMAP enforcement. And I'm sure some of the big retailers feel the same.

 

[Mt Spokane Photography]

Re: Canon USA Inc, Suing Get It Digital LLC & Others Over Grey Market Sales

Item 1;
Re-read that as a seller assigned serial number.
So what?
How is that Canon's concern?


Item 2;
Buyer beware, or, purchase an extended warrant from a reputable underwriter.
Again, how is that Canon's concern?


Item 3;
Really Canon?
Irrelevant, petty.


Item 4;
Canon does have copyrights on their manuals, the only item on the list with legs.


The gray marketers are dunderheads to leave themselves open here when genuine Canon manuals are readily available for legitimate and legal download.


Item 5;
So what?
- - -
Canon, if you want to close the gray market, eliminate price discrepancies across various worldwide market places.
Canon, stop whining when you sell cheaper in one place and enterprising individuals buy at that price for re-sale elsewhere.
Establish your wholesale prices and leave the retail market alone.
Or, retail exclusively through a corporate outlet.

Not sure where you went to law school, but you must have slept through Property. All five claims have merit in a trademark suit. The proximity to the holiday shopping season is not a surprise; I suspect this will be followed up this week with a Rule 65 motion for a temporary restraining order, immediately barring the defendants from selling Canon products related to the lawsuit.

If you read the article, a request for restraining order is what was filed.

"Because Canon USA believes that the continued practice of selling gray market cameras and other products would continue to violate its trademark rights, Canon is asking the federal court to issue an injunction that orders each of these companies to cease all sales of gray market Canon products.

Additionally, Canon USA is going after all of their profits for gray market Canon products sold by these companies, as well as seeking damages incurred by Canon USA, which could include servicing gray market products and other measures Canon USA has taken in response dealing with the defendants’ gray market camera sales. Finally, is also seeking attorneys’ fees and costs associated with filing these lawsuits."



I doubt that it will be granted, the Supreme Court has ruled in favor of gray market importers a couple of times now, so its just trying to slow gray market sales during the holidays. The First Sale Doctrine will be argued, and since its not clear cut at all, I'm doubtful that Canon will get a injunction. They are trying to use their huge legal budget to overwhelm a smaller business.

Their example of a power cord that is not UL approved is another Red Herring. There is no law requiring UL approval of electrical products. OSHA requires certified products, so a non safety certified product can't be used legally in a workplace.

As to import of gray market, its legal. The product was made and trademark was used with permission of Canon. That is also a Red Herring, Canon can use their own trademarks on a product.

The counterfeited label is a trademark issue, it was likely applied in China by a wholesaler, and only a few of these got thru, but no one knows for sure. The reseller can likely screen for these more closely, but may have to pay up.

https://en.wikipedia.org/wiki/First-sale_doctrine

"The 2008 Omega v. Costco case involved this exact unresolved issue, where the defendant Costco obtained authentic Omega watches, which feature a copyrighted design on the back of the watches, through the gray market and resold them in its stores in the US. Omega manufactured these watches outside the US and did not authorize their importation into the US. Based on the Quality King case, the 9th Circuit held that "application of first-sale doctrine to foreign-made copies would impermissibly apply" the Copyright Act extraterritorially. However, the court stated that first-sale doctrine might still apply to a foreign manufactured copy if it was imported "with the authority of the U.S. copyright owner." The Supreme Court granted certiorari to Omega v. Costco, and affirmed 4-4. However, as an evenly split decision, it set precedent only in the 9th Circuit, not nationwide.[10]"

"However, in Kirtsaeng v. John Wiley & Sons, Inc.,[11] in 2013, the United States Supreme Court held in a 6-3 decision that the first-sale doctrine applies to goods manufactured abroad with the copyright owner's permission and then imported into the US. The case involved a plaintiff who imported Asian editions of textbooks that had been manufactured abroad with the publisher-plaintiff's permission. The defendant, without permission from the publisher, imported the textbooks and resold on eBay. The Supreme Court's holding severely limits the ability of copyright holders to charge vastly different prices in different markets due to ease of arbitrage.[citation needed] The decision does remove incentives to US manufacturers to shift the manufacturing abroad to attempt to circumvent the first-sale doctrine altogether.[citation needed]"

 

[chauncey]

Re: Canon USA Inc, Suing Get It Digital LLC & Others Over Grey Market Sales

I realize the word "addiction" is rather harsh but, due to the fact that I'm lens addicted to Canon and that jumping ship would be
financially futile, it does not preclude me from thinking that Canon business practices, from a consumer"s perspective, shall I say, suck.

They should model their sales practices more like Honda/Sony/whoever.

 

[Mt Spokane Photography]

Re: Canon USA Inc, Suing Get It Digital LLC & Others Over Grey Market Sales

I realize the word "addiction" is rather harsh but, due to the fact that I'm lens addicted to Canon and that jumping ship would be
financially futile, it does not preclude me from thinking that Canon business practices, from a consumer"s perspective, shall I say, suck.

They should model their sales practices more like Honda/Sony/whoever.

But ... Canon is starting to model their practices after Sony and Nikon, in fact, both are much stricter than Canon about gray market. Nikon will not repair a gray market camera even if you pay, and will not sell parts to third party repair shops either. Sony is very strict about charging full MSRP, and clamps down hard on any gray market or discounts.

 

[unfocused]

Re: Canon USA Inc, Suing Get It Digital LLC & Others Over Grey Market Sales

Canon may have legal claims to sue but no moralic right whatsoever. MMAP is unethical corporate behaviour. I hope their law suits will backfire in the worst possible way .. Canon not only losing the suits, but being ordered to end their unethical practices against purchasers of Canon products. Same goes for Nikon, of course. In my country Nikon was just recently fined by the anti-cartel court for illegal price rigging behaviour, ripping off consumers. Would not be surprised if Canon comes under scrutiny next.

You're absolutely correct. Canon USA created this problem.

Oh please! Give me a break. How is MAP pricing unethical? It's not unique to either Canon nor the camera business. It's simply a way for manufacturers to protect their authorized dealer base. You may not like it, but don't pretend it is somehow unethical.

And, Canon Rumors Guy, it's a bit hypocritical for you, since you take money from these grey market advertisers, to pass judgment on this lawsuit.



I'll leave it for the courts to sort it out. I'd suggest all the other bar stool lawyers on this site do the same.

I am concerned about the allegation the sellers are replacing the serial number plates. If so, it seems like that might be a criminal matter (fraud).

I do find it interesting that Canon is claiming that the grey market dealers are costing them money because Canon voluntarily provides warranty and repair service on these products. The obvious solution there is simply not to offer repair for these products. That would probably shut down the grey market sellers rather quickly.

And, it also seems that if Canon Asia (or whatever they are called) simply refused to sell to any dealers in Asia caught shipping product overseas, it could also solve the problem.

I do wonder what the motivation is for seeking a court-ordered solution, when they have the ability to address the problem more effectively in other ways. I wonder if they simply want to get the rules regarding MAP better defined, so they can tell their dealers that they took it to court.

It will be interesting to watch.

 

[Orangutan]

Re: Canon USA Inc, Suing Get It Digital LLC & Others Over Grey Market Sales

Not sure where you went to law school, but you must have slept through Property. All five claims have merit in a trademark suit.

Eagle Eye: I won't question your knowledge of U.S. law, I just think you should be aware that when non-lawyers look at these cases we don't look for fact-patterns and precedent to support our position at trial. Rather, we often first consider whether the law itself seems appropriate, then judge (our very limited knowledge of) the facts by that standard, instead of the existing legal standard. In a court this would be laughable; outside the court it's entirely legitimate. Since I'm not a direct party to this case, the results of trial and appeal are more important to me for what they say about the existing law. In a more important case, this might prompt me to contact my legislators to urge them to change what I perceive to be a bad law.

From my perspective, your legal opinion is important and welcome here; however, remember that laws do change over time, and citizen dissatisfaction is an important motive for those changes.

 

[Canon Rumors]

Re: Canon USA Inc, Suing Get It Digital LLC & Others Over Grey Market Sales

Canon may have legal claims to sue but no moralic right whatsoever. MMAP is unethical corporate behaviour. I hope their law suits will backfire in the worst possible way .. Canon not only losing the suits, but being ordered to end their unethical practices against purchasers of Canon products. Same goes for Nikon, of course. In my country Nikon was just recently fined by the anti-cartel court for illegal price rigging behaviour, ripping off consumers. Would not be surprised if Canon comes under scrutiny next.

You're absolutely correct. Canon USA created this problem.

Oh please! Give me a break. How is MAP pricing unethical? It's not unique to either Canon nor the camera business. It's simply a way for manufacturers to protect their authorized dealer base. You may not like it, but don't pretend it is somehow unethical.

And, Canon Rumors Guy, it's a bit hypocritical for you, since you take money from these grey market advertisers, to pass judgment on this lawsuit.

How is it hypocritical?

I live in the marketplace, it doesn't mean I have to agree with it. I want the end of MMAP pricing, which will lead to the end of the grey market economy as it currently operates.

 

[Orangutan]

Re: Canon USA Inc, Suing Get It Digital LLC & Others Over Grey Market Sales

Oh please! Give me a break. How is MAP pricing unethical? ... It's simply a way for manufacturers to protect their authorized dealer base.

You just answered your own question: it interferes with a free market in camera equipment. If I buy a camera at any price it's now mine, and I should be able to resell it at any price. Coercive contracts that limit a buyer's sales options are...um...certainly in the gray of market economics.

And, Canon Rumors Guy, it's a bit hypocritical for you, since you take money from these grey market advertisers, to pass judgment on this lawsuit.

He's been open about his position, what's the problem?

I am concerned about the allegation the sellers are replacing the serial number plates. If so, it seems like that might be a criminal matter (fraud).

This is a legitimate problem, if true. It's both defrauding the customer and possibly also hurting Canon's reputation.

I do wonder what the motivation is for seeking a court-ordered solution, when they have the ability to address the problem more effectively in other ways.

Leverage. Not all lawsuits are filed with the expectation of reaching a verdict.

 

[Taylorpilot]

Re: Canon USA Inc, Suing Get It Digital LLC & Others Over Grey Market Sales

I don't really have a problem with MAP pricing. It keeps somebody from giving away cameras at $10 profit just for the fun of it, putting all the other real businesses under. I think as a contract between two private companies, they should be able to create basic terms for selling their products. Almost all retail outlets have guidelines that they have to sale their products through. Most legit stores can't sale them for the price that the ebay stores do, and stay in business, so they suffer.

 

[unfocused]

Re: Canon USA Inc, Suing Get It Digital LLC & Others Over Grey Market Sales

Canon may have legal claims to sue but no moralic right whatsoever. MMAP is unethical corporate behaviour. I hope their law suits will backfire in the worst possible way .. Canon not only losing the suits, but being ordered to end their unethical practices against purchasers of Canon products. Same goes for Nikon, of course. In my country Nikon was just recently fined by the anti-cartel court for illegal price rigging behaviour, ripping off consumers. Would not be surprised if Canon comes under scrutiny next.

You're absolutely correct. Canon USA created this problem.

Oh please! Give me a break. How is MAP pricing unethical? It's not unique to either Canon nor the camera business. It's simply a way for manufacturers to protect their authorized dealer base. You may not like it, but don't pretend it is somehow unethical.

And, Canon Rumors Guy, it's a bit hypocritical for you, since you take money from these grey market advertisers, to pass judgment on this lawsuit.

How is it hypocritical?

I live in the marketplace, it doesn't mean I have to agree with it. I want the end of MMAP pricing, which will lead to the end of the grey market economy as it currently operates.

I prefer the more transparent, thoughtful and straightforward approach of CanonPriceWatch http://www.canonpricewatch.com/blog/2015/11/getitdigital-bigvalueinc-sued-by-canon-usa-inc-over-grey-market/ which clearly labeled their position and explained it, as opposed to simply making a drive by comment in the thread.

I'm all for ending MAP pricing. I think authorized dealers should be able to sell a product at the price the market sets. In fact, it's become painfully obvious over the last few years that MAP pricing doesn't work. Authorized dealers want MAP pricing and then employ countless strategies to game the system (bundles and "place the item in the cart for the final price" gimmicks). In the end, prices tend to settle in at what the market sets as the best price, despite efforts by manufacturers and dealers to keep that from happening.

The problem with grey market sales is that they are benefiting from an infrastructure that they aren't paying for. It's crazy to pretend that having a North American distribution, marketing and repair network comes at no cost. Given the tiny price difference between gray market and authorized dealers (for example, the current street price of a 5DIII from an authorized dealer is a grand total of $57 higher than the gray market price), I'm more than willing to pay that small difference for the security of having a product that was properly imported.

Now, as I said, Canon has other options to address the problem and I expect that if they are not successful in the court, they may takes those actions.