## Facts

- Kubota Corporation (Japan) owned the U.S. “Kubota” trademark; its U.S. affiliate was the exclusive U.S. licensee under an agreement reserving the U.S. mark and goodwill to Kubota-Japan.
- Kubota-Japan manufactured sub-50-horsepower agricultural tractors for foreign markets, including models engineered for Japanese conditions (e.g., rice-paddy use).
- Kubota’s authorized U.S.-market tractors were designed and equipped for U.S. conditions and were supported through Kubota’s U.S. dealer, parts, service, and warranty network.
- Gamut acquired used Kubota tractors in Japan that bore an authentic “Kubota” mark, imported them into the United States, and resold them outside Kubota’s authorized U.S. distribution channels.
- The imported Japanese-market tractors differed from U.S.-market Kubota tractors in design/configuration, safety and regulatory-related features, and post-sale support expectations (including lack of U.S. warranty and service integration).
- Kubota filed a complaint at the International Trade Commission (ITC) under § 337 of the Tariff Act of 1930, alleging the gray-market imports infringed a valid U.S. trademark and harmed domestic goodwill.

## Issues

1. Whether importation and post-importation sale of authentic foreign-market goods can violate § 337 when the conduct constitutes trademark infringement under the Lanham Act.
2. Whether differences between Japanese-market used tractors and authorized U.S.-market tractors were “material differences” supporting likely consumer confusion and trademark infringement.
3. Whether substantial evidence supported the ITC’s findings of injury or threatened injury to the domestic industry and the goodwill symbolized by the “Kubota” mark.
4. Whether the ITC had authority to issue, and properly justified, a general exclusion order and cease-and-desist orders to remedy the violation.

## Decision

- The Federal Circuit affirmed the ITC’s determination that Gamut violated § 337.
- The court held that gray-market goods may infringe a U.S. trademark where they are materially different from the authorized domestic goods and likely to cause confusion regarding source, sponsorship, or quality.
- The court found substantial evidence supported the ITC’s determination that the Japanese-market used tractors were materially different from authorized U.S.-market tractors.
- The court upheld the ITC’s General Exclusion Order barring importation of used Japanese-market sub-50-horsepower “Kubota” tractors and the Cease and Desist Orders prohibiting domestic sale of already-imported tractors.

## Legal Principles

- Section 337 prohibits importation and post-importation sale of articles that infringe a valid and enforceable U.S. trademark; the ITC applies substantive Lanham Act infringement standards in this analysis.
- Authentic foreign-market goods may be treated as infringing in gray-market cases when material differences from the authorized domestic product are likely to affect consumer purchasing decisions or expectations.
- “Material differences” may include differences in design/configuration for market-specific uses, safety or regulatory-related features, and the availability of authorized post-sale service, parts, and warranty support.
- Likely harm to the trademark owner’s goodwill and loss of quality-control expectations may constitute cognizable injury supporting § 337 relief.
- The ITC may issue a general exclusion order where broader relief is needed to prevent circumvention and to effectively protect the domestic industry and trademark goodwill; cease-and-desist orders may also be used to stop ongoing domestic injury.

## Conclusion

The Federal Circuit sustained the ITC’s finding that importing and selling materially different, foreign-market “Kubota” tractors constituted trademark infringement actionable under § 337, and it affirmed broad exclusionary and domestic restraint remedies to prevent consumer confusion and protect trademark goodwill.


Gamut Trading Co. v. U.S. Int’l Trade Comm’n, 200 F.3d 775 (Fed. Cir. 1999)