Big news for Arctic Cat fans, and especially Cat snowmobilers in Canada: The sleds are available for sale again after Cat reached an agreement with BRP, parent company of Ski-Doo snowmobiles.
In a dealer communication letter sent to Arctic Cat dealers on October 30, Textron’s VP in charge of Arctic Cat Craig Kennedy wrote, “We are excited to report that Arctic Cat and BRP have reached settlement of ongoing intellectual property disputes between the businesses. Among the matters resolved is the dispute related to BRP’s rider-forward patents and Arctic Cat’s full-size snowmobiles with pyramidal frame designs.
“As a result,” Kennedy’s letter continued, “Arctic Cat and its Canadian dealers will be allowed to immediately resume the sale and delivery of its full lineup of snowmobiles in Canada. This includes delivery of Model Year 2021 snowmobile pre-orders.”
The announcement should be a relief not just to folks who had an Arctic Cat on order in Canada that had a dubious chance of delivery, but really for anybody who is interested in the future of the Arctic Cat line or snowmobiling in general. Peace in snowmobiling is a good thing for the market.
At this early date, there’s no indication of how the settlement between the brands was reached and whether patent rights were traded on two separate legal situations between the two brands.
UPDATE: The Formal Announcement
The following announcement was sent out at 8 a.m. central time on Monday, November 2:
Bombardier Recreational Products Inc. (“BRP”) (TSX: DOO; NASDAQ: DOOO) and Arctic Cat Inc. (“Arctic Cat”), a Textron Inc. (NYSE:TXT) company, have reached a global settlement of the ongoing intellectual property disputes between them. Under the terms of the confidential settlement agreement, the two court cases still active between the parties in the US and in Canada will be dismissed.
Among the matters resolved is the dispute related to BRP’s rider-forward patents and Arctic Cat’s full-size snowmobiles with pyramidal frame designs. As a result, Arctic Cat and its Canadian dealers will be allowed to immediately resume the sale and delivery of its full lineup of snowmobiles in Canada.
Arctic Cat and BRP have pledged to continue to work together for the betterment and expansion of the snowmobile industry for all riders and associations.
How We Got Here
The legal situation between the two brands came to a head this summer, when a Canadian Federal Court ruling found in June that Arctic Cat’s ProCross/ProClimb chassis’ pyramidal subframe (and Cat’s race chassis before it) had violated the patents that BRP owned on a similar design for its subframe on its original REV chassis that was launched in model year 2003.
That ruling imposed a $2.83 million fine that Arctic Cat had to pay BRP for 21,000 sleds sold between 2008 and 2014 that the court said violated the patent. Perhaps more notable, though, was that it (1) called for an injunction starting in July on the sale in Canada of any Cat sleds that violated the patent, and (2) left to another court to decide the level of fine Cat should pay BRP for sleds built and/or sold after 2014 that violated the patent. All full-sized Cats are still on the chassis platform that was found to be in violation. For that matter, most Yamaha snowmobiles are also built on that chassis by Arctic Cat.
Cat appealed the initial decision on several grounds, and, in conjunction with four Canadian dealers, also sought a stay on the injunction for 2021 sleds that were spring-ordered in Canada before the ruling came down. The Canadian court rejected the appeal with an October 1 ruling, though, saying that a down-payment does not constitute a sale.
In a tight market like snowmobiling, it’s not unusual for the brands to get into legal disputes, and historically such suits are often eventually settled between the parties with the trading of patent rights. One of the most famous such trades occurred in the late 1990s, when long-travel suspension lawsuits eventually led to push-button reverse working its way through the industry.
In this instance, observers have speculated for some time whether Arctic Cat and BRP/Ski-Doo might eventually tie together this snowmobile suit with a patent infringement case that Cat won against BRP’s Sea-Doo division for off-power steering that dates way back to when Arctic Cat had a Tigershark personal watercraft line.
UPDATE: Following the formal announcement on the morning of November 2, we reached out to Textron and BRP officials to see if the watercraft and snowmobiles suits were indeed tied in this agreement and are awaiting a response. The letter Kennedy sent to Cat dealers can be seen on ArcticInsider.com.