BRP Wins Lawsuit; Injunction Halts Sale Of Cat Sleds In Canada

A ruling in a long-standing legal dispute between Ski-Doo’s parent company BRP and Arctic Cat over allegations of patent infringement was announced today in Canada — with some startling results.

According to the press release issued by BRP this afternoon, the Federal Court of Canada found that Arctic Cat did infringe on Ski-Doo’s frame patent when it came out with the ProCross/ProClimb chassis starting in 2012, as well as designs previous to that.

As a part of the ruling, according to the press release, the Court, “issued a permanent injunction ordering Arctic Cat and its Canadian dealers to stop the sale, use and distribution of any snowmobile which would infringe BRP’s frame patent.” Considering the ProCross subframe is found beneath pretty much every full-sized snowmobile that Arctic Cat builds, that’s pretty impactful.

Arctic Cat also builds the vast majority of Yamaha’s snowmobiles based on that same chassis. No word yet on if and how that will work into the equation.

The ruling also calls on Arctic Cat to pay BRP a royalty of $135 in Canadian dollars for every snowmobile built that infringes on the patent since model year 2008. The 2008 timing is picked because the earliest versions of what turned into the ProCross chassis were found on race sleds and the Sno Pro 500, which pre-dated the ProCross.

UPDATE: A story on CTV boiled down the payment due to BRP: It said that the judged ordered Arctic Cat to pay $2.83 million for the roughly 21,000 snowmobiles that infringed on the patent that were sold in Canada between 2008 and 2014, and referred damages suffered by BRP post 2014 to another judge.

Three years ago, the Federal Court of Canada ruled in Arctic Cat’s favor on a very similar lawsuit. Here’s a link to that story.

Arctic Cat’s parent company Textron replied moments ago with this statement: “Arctic Cat Inc. respectfully disagrees with the court’s ruling. We will continue to provide service and support to our Canadian dealers and customers as we pursue further legal recourse in this matter, including appeals of the court’s decision and of any injunctions issued against the continued sale of our products in Canada. The ruling has no impact on sales through our U.S. dealers, distributors or retail outlets.  We will have no further comment on this matter at this time.”

Lawsuits between the snowmobile factories is not uncommon — and often they are settled through negotiations where one piece of exclusive technology will be “traded” in exchange for the dismissal of a lawsuit based on a different piece of technology. A ruling this strong, though, is unusual. With appeals likely and negotiations still a possibility, it’s highly unlikely that the final chapter on this story has been written, but today’s ruling on its face is shocking.

This story just broke and we’re still trying to dig in for details, but for now here’s the full press release from BRP. Check back here for updates as we learn more.

BRP Wins Lawsuit Against Arctic Cat in Canada

• The Federal Court of Canada handed BRP an important victory against its competitor Arctic Cat regarding BRP’s frame patent, which was at the heart of the Ski-Doo REV revolution;
• The Federal Court of Canada issued a permanent injunction prohibiting the sale, use and distribution of all Arctic Cat snowmobiles in Canada that infringe BRP’s Canadian patent; The effective date of the permanent injunction is set for July 6, 2020;
• The Court also ordered Arctic Cat to pay BRP a royalty of CA$135 per unit that infringes the frame patent since MY2008.

VALCOURT, Quebec, June 15, 2020 (GLOBE NEWSWIRE) — BRP (TSX: DOO; NASDAQ: DOOO) announced today that the Federal Court of Canada has rendered a decision favorable to BRP in a lawsuit launched in December 2011 against Arctic Cat, where BRP argued that Arctic Cat infringed certain of its patents related to BRP’s revolutionary Ski-Doo REV snowmobiles.

Snowmobile enthusiasts will remember the launch of the Ski-Doo REV in 2002, which completely revolutionized the rider experience with its aggressive, sporty forward positioning of the driver and strong, lightweight frame.

“I couldn’t be more pleased with the decision of the Federal Court of Canada,” said Martin Langelier, Senior Vice President, General Counsel & Public Affairs at BRP. “Innovation is part of our DNA and today our ingenuity, which makes our company and products unique, is recognized and protected against intellectual property violation. The REV platform was and is still a game-changer in the snowmobiling industry and to have it protected in Canada is an important win,” concluded Langelier.

The Federal Court of Canada issued a permanent injunction ordering Arctic Cat and its Canadian dealers to stop the sale, use and distribution of any snowmobile which would infringe BRP’s frame patent. It also ordered Arctic Cat to pay BRP a royalty of CA$135 per unit that infringes the frame patent since MY2008.

The effective date of the permanent injunction is set for July 6, 2020.

About BRP
We are a global leader in the world of powersports vehicles, propulsion systems and boats, built on over 75 years of ingenuity and intensive consumer focus. Our portfolio of industry-leading and distinctive products includes Ski-Doo and Lynx snowmobiles, Sea-Doo watercraft, Can-Am on- and off-road vehicles, Alumacraft, Manitou, Quintrex, Stacer and Savage boats, Evinrude and Rotax marine propulsion systems as well as Rotax engines for karts, motorcycles and recreational aircraft. We complete our lines of products with a dedicated parts, accessories and apparel business to fully enhance the riding experience. With annual sales of CA$6.1 billion from over 120 countries, our global workforce is made up of approximately 12,600 driven, resourceful people.

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