Judge: Canon Doesn’t Have to Supply Consumables, Support to Dealer SymQuest Acquired by Competitor

SymQuest[1]Canon U.S.A. reports that the U.S. District Court for the Eastern District of New York has denied a request made by SymQuest Group, Inc., a former authorized Canon copier/MFP dealer, for an injunction requiring Canon U.S.A. to continue providing spare parts, consumable supplies, and technical support to SymQuest during a lawsuit filed by SymQuest against Canon U.S.A. in July 2015.

SymQuest, which markets business equipment in Northern New York, Vermont, New Hampshire, and Maine, was acquired in June 2015 by Canon U.S.A.’s competitor, Konica Minolta Business Solutions U.S.A. Consistent with its long-standing policy of terminating its business relationships with authorized retail dealers acquired by its competitors, Canon U.S.A. exercised its contractual right to terminate SymQuest’s authorized Canon retail dealership, and ceased all sales and service support to SymQuest.

SymQuest KM LogoSymQuest, now a wholly owned subsidiary of Konica Minolta Business Solutions U.S.A., responded by filing a lawsuit against Canon U.S.A. in federal court. SymQuest asserted that by ceasing its post-termination sales and service support to SymQuest, Canon U.S.A. violated the terms of the parties’ retail dealer agreement and wrongfully interfered with SymQuest’s ability to service its customers’ machines. SymQuest requested that the federal court grant injunctive relief compelling Canon U.S.A. to continue providing SymQuest with spare parts, consumable supplies, and technical support.

U.S. Magistrate Judge Stephen I. Locke, in a “thorough and extensive” opinion thereafter adopted by U.S. District Judge Leonard D. Wexler, found that the dealer agreement, in “clear and unambiguous” terms, justified Canon U.S.A.’s termination of its business relationship with SymQuest. The federal court held that SymQuest failed to “make a clear showing that it is likely to suffer irreparable harm” and that “[t]here is not a likelihood of success on any of [SymQuest’s] claims.” Accordingly, the court denied SymQuest’s request for a temporary restraining order and a preliminary injunction, validating Canon U.S.A.’s well-established policy of declining to provide spare parts, consumable supplies, and technical support to terminated retail dealers acquired by its competitors.

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