District Judge Brian M. Cogan

 

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Geleshmall Enters.’s 2014 agreement with FUJIFILM N. Am. Corp. (FUJI) to distribute “Genuine U.S. FUJI Products” required arbitration of disputes arising under the agreement. FUJI breached the agreement by failing to fill $1.8 million of Geleshmall’s orders. Geleshmall was among the defendants FUJI sued in 2016 for violating the Lanham Act by allegedly selling “gray market” products. FUJI sought dismissal of Geleshmall’s counterclaims for breaches of contract and the covenant of good faith and fair dealing, arguing they were subject to arbitration. The court found Geleshmall’s counterclaims fell within the 2014 Agreement’s arbitration clause, and that their stay was mandatory under 9 USC §3. The counterclaims would be dismissed if arbitration was not commenced within 30 days. However, the court denied Geleshmall’s motion to compel arbitration on FUJI’s gray markets claim. Under the 2014 Agreement, the parties did not agree to arbitrate the gray market claims, which existed separately from conduct that was the subject of the 2014 Agreement. The 2014 Agreement’s provision barring Geleshmall’s sale or promotion of Genuine U.S. FUJI Products abroad, was the reverse of FUJI’s instant gray market claim.

District Judge Brian M. Cogan

 

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Geleshmall Enters.’s 2014 agreement with FUJIFILM N. Am. Corp. (FUJI) to distribute “Genuine U.S. FUJI Products” required arbitration of disputes arising under the agreement. FUJI breached the agreement by failing to fill $1.8 million of Geleshmall’s orders. Geleshmall was among the defendants FUJI sued in 2016 for violating the Lanham Act by allegedly selling “gray market” products. FUJI sought dismissal of Geleshmall’s counterclaims for breaches of contract and the covenant of good faith and fair dealing, arguing they were subject to arbitration. The court found Geleshmall’s counterclaims fell within the 2014 Agreement’s arbitration clause, and that their stay was mandatory under 9 USC §3. The counterclaims would be dismissed if arbitration was not commenced within 30 days. However, the court denied Geleshmall’s motion to compel arbitration on FUJI’s gray markets claim. Under the 2014 Agreement, the parties did not agree to arbitrate the gray market claims, which existed separately from conduct that was the subject of the 2014 Agreement. The 2014 Agreement’s provision barring Geleshmall’s sale or promotion of Genuine U.S. FUJI Products abroad, was the reverse of FUJI’s instant gray market claim.