Will Farmers or 3rd Party Repair Shops Sue John Deere for Allegedly Contractually Prohibiting Unlicensed Tractor Repairs?

In the last couple years, tractor manufacturer John Deere (formally Deere and Co.) has allegedly been limiting the ability of purchasers of its tractors to independently work on these tractors or from having any third party parts & repair providers work on said tractors unless they are licensed by John Deere to do so. As reported by various media organizations, it is alleged that John Deere might be using the Digital Millennium Copyright Act (“DMCA”) provisions to make such claims – an act which is typically applied to digital hardware and software companies and which arguably was created for only such purposes rather than for what Deere might be hoping. Also Deere’s alleged actions would seem to be a questionable extension of the 9th Circuit’s holding in Vernor vs. Autodesk, which essentially holds that when software companies sell their software they are actually selling the purchaser a limited license to use the software rather than selling all rights to the software itself. That holding makes perfect sense in the context of digital products such as online software downloads and even in the DMCA’s extension of this holding to hardware whose primary purpose is to run software, such as computers, smartphones, and digital music players.

Deere’s alleged extension of such laws to its tractors has apparently much upset the farmers who have purchased these products because not only can these farmers allegedly not repair these tractors themselves but they can’t even allegedly take them to their local 3rd party repair shop to have them fixed when they break down. Instead they allegedly have to take them to licensed Deere repair providers who might cost significantly more.

Farmers responded in various ways to Deere’s alleged limitations. Most importantly, the US Copyright Office was petitioned to create an exemption in the DMCA for land vehicles, including tractors; and the Copyright Office did just that thanks to the Electronic Frontier Foundation. Since tinkering on your own tractor is potentially no longer a violation of US Copyright law, in an ugly response to this new exemption Deere allegedly created a new purchase agreement to close this door via contractual limitations whereby tractor purchasers would allegedly promise to not work on the tractors themselves or hire non-licensed parties to do so.

As reported by boingboing.net on 3/22/17: “Deere responded immediately to the Copyright Office ruling by amending the EULA for its tractors to prohibit any such modification, third party repairs, etc, and made farmers click through the EULA and “agree” to it in order to start up their tractors. Now, farmers find themselves in desperate straits. Not only does Deere gouge them on repairs (“$230, plus $130 an hour for a technician to drive out and plug a connector into their USB port to authorize [a user-swapped] part”), but the repair shops can be far away or busy, and thus a half-million dollar tractor can sit immobilized while a farmer frets about getting his crops in. To add insult to injury, the new Deere EULA makes farmers indemnify the company against “crop loss, lost profits, loss of goodwill, loss of use of equipment … arising from the performance or non-performance of any aspect of the software.””

Another response has been far more edgy: Deere tractor purchasers have been allegedly resorting to questionable 3rd party software to hack into and repair the Deere equipment. Some farmers of course are no longer buying Deere products and instead choosing companies without such alleged restrictions. State legislators in a few states like Nebraska have introduced “fair repair bills” to counteract such allegedly restrictive purchase agreements like Deere’s.

The bigger question is whether any new litigation will challenge Deere’s actions in court for possible violations of antitrust law, consumer law, and/or contract law. Such allegedly restrictive provisions that might be in the Deere purchase agreements might arguably be considered monopolistic, limiting of free trade, an unfair business practice, and/or an unconscionable contract term.

I would love the opportunity to speak with farmers who have purchased Deere tractors to review their purchase agreements with Deere and to determine whether Deere has claimed any breach and sought damages from any tractor purchasers who allegedly violated the purchase agreement. It would also be interesting to review whether Deere’s alleged restrictions might have impacted 3rd party tractor repair shops who presumably might have lost business as a result. It certainly sounds like a possible class action lawsuit might be facing Deere and Co. in the short term to rein in such alleged actions.

–  Ali Ebrahimzadeh

 

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