Mitsubishi Corporation and Mitsubishi Motors Corporation (MMC) have settled their dispute with 11 UK businesses regarding activities involving the importation of vehicles from outside the European Economic Area (EEA) (commonly referred to as ‘grey imports’) into the UK for sale.

The action was taken on the basis that those trade-marked vehicles have been or will be placed on the market in the UK without the consent of the trade mark owner, Mitsubishi Corporation or its licensee, MMC.

After extensive negotiations, the 11 defendants have signed a legally binding agreement to cease all dealings in the EEA of any Mitsubishi vehicles which infringe Mitsubishi’s trade mark rights, Mitsubishi’s independent UK importer, The Colt Car Company said in a statement late on Monday.

Mitsubishi has allowed one exception as part of the agreement which permits the defendants to continue to import or deal in Mitsubishi vehicles imported from outside the EEA which are more than three years old measured from the date of first registration.

The relevant trade mark law used in this case does not distinguish between new and used goods, however, Mitsubishi has decided to enforce its rights only in respect of non-EEA vehicles which are less than three years old allowing the defendants to trade in older non-EEA vehicles without facing enforcement action.

The settlement does not in any way affect the defendants’ ability to continue to trade in vehicles which have been put on the market in the EEA with Mitsubishi’s consent. Such vehicles can be traded in freely and Mitsubishi has never sought to restrict this trade by the defendants or any other businesses, the automaker said.

“Since litigation began we have been working hard to understand how these individual businesses operate and we have investigated market statistics for the import of vehicles other than by ourselves,” said Colt managing director Jim Tyrrell in the statement. “We concluded that the market for non-EEA vehicles over three years old does not have a negative effect on our operation or that of our dealer network.”

Statistics show that, at present, 75% of all used Mitsubishi vehicles imported into the UK from outside the EEA are at least 10 years old, 20% are between five and 10 years old and only 5% are less than five years old.

Tyrrell added: “We are very pleased with the result of this action. The importation of new and nearly-new Mitsubishi vehicles from outside the EEA into the UK needs to stop as there are a number of issues which are damaging the Mitsubishi brand and causing customer dissatisfaction, the most significant of which is the fact that these vehicles do not have a manufacturer’s warranty.

“Once a non-EEA vehicle is over three years old there can be no confusion for the customer in terms of warranty expectations.”

The settlement, which will now be endorsed by the UK high court, concludes the litigation proceedings between Mitsubishi and 11 of the 15 defendants.  Two have ceased trading since the proceedings began and two others declined to be a party to the settlement agreement.

This latest lawsuit follows on from the successful action taken by Mitsubishi against PFK Trading Company in July 2005. PFK settled out of court and agreed to cease trading in non-EEA Mitsubishi vehicles and also to pay an undisclosed sum as a contribution to Mitsubishi’s costs and damages.

Mitsubishi said it would continue to police infringement of its intellectual property rights vigorously and any organisations found to be importing non-EEA vehicles of less than three years old into the UK market would face enforcement action.