Court Jeopardizes 2021 Arctic Cat Canadian Sales

October 2020 Feature Web Exclusive

           Will there be a disruption or stoppage of the sale of Arctic Cat snowmobiles in Canada this season? According to a decision by a Canadian Federal Court justice, over 700 pre-season sales of full-sized Arctic Cat snowmobiles may not be exempt from a ruling earlier this summer and could be blocked.

            In a Public Judgment and Reasons document released by a Canadian federal court this past summer, Arctic Cat had been prohibited to sell certain snowmobile models in Canada until a patent infringement lawsuit was resolved with Bombardier Recreational Products.

            Although there is still much fog surrounding what models are being restricted, it likely affects the 2021 model line in a significant degree. There is certainly a lot of wiggle room within the courts that could stall the restriction in Canadian sales of Arctic Cat snowmobiles. And with the most recent decision, Cat has asked to pay a royalty similar to what was imposed on the sleds during a 2014 ruling.

            Up to now, neither Arctic Cat nor BRP are releasing much information about the court proceedings so it’s very unclear what if any impact there will be this season other than the 700-plus units sold this past spring.

            What we do know is this Public Judgment and Reasons document from June 2020 stems from a patent trial that was initially filed in late 2011. The patent dispute regarded several patents that pertained to the Ski-Doo REV chassis dealing with rider-forward design and frame assembly.

            Although the issues with rider-forward design didn’t hold water in the court, the issues with frame assembly offered a potential problem for Arctic Cat. Cat failed to prove that its design was either significantly different or would have been a natural result of the process of commonsense engineering. Thus it was in violation of the BRP patent on the “Pyramidal Frame assembly.”

            At the time the court assessed penalties and royalties for more than 20,000 units sold up to the 2014 year. The litigation then moved to another court to figure out what to do with Arctic Cat units sold after 2014. This gave both parties some wiggle room in negotiating a settlement. However, that never materialized. And like any complicated legal case, both parties sought resolution with penalties, interest and costs tied into the litigation.

            This latest action regarding the 2021 pre-season sales, Canadian Justice Yvon Roy ruled that a deposit on a snowmobile does not constitute a completion of sales, particularly when the unit hasn’t yet been manufactured. How that relates to in-season sales is still unclear.

            Cat has argued that any restriction to the Canadian snowmobile market could have irreparable harm for the company and its dealer network.


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