Cherry Optical Inc. Sues Zeiss in Contract Dispute

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GREEN BAY, Wisc.—Independent wholesale lab Cherry Optical, Inc., located here, is suing Carl Zeiss Vision over an alleged breach of contract. The basis of the suit, filed June 6 in U.S. District Court, Eastern District of Wisconsin, Green Bay Division, is Cherry Optical’s claims that Zeiss violated Wisconsin’s Fair Dealership Law when it terminated a contract with the lab, a longtime Zeiss distributor. Cherry Optical claims that Zeiss violated the Wisconsin statue by failing to give the lab at least 90 days’ prior written notice of “termination, cancellation, nonrenewal or substantial change in competitive circumstances.” According to the suit, Zeiss only gave Cherry Optical 11 days’ notice that it was terminating its “distributor and enablement agreement” on January 1, 2019.

Additionally, Cherry Optical claims that Zeiss violated the Fair Dealership Law because it “did not provide a reason for the termination of the Distributor and Enablement Agreement that had been in place for nearly 20 years.” Under the Wisconsin statute, companies who rely on dealers to distribute their products “may not terminate, cancel, fail to renew or substantially change the competitive circumstances of a Dealership Agreement without good cause.”

Cherry Optical is seeking a jury trial in order to recover what it claims is $5.2 million in lost profits from Zeiss, plus attorneys’ fees. According to court documents, the lab has invested approximately $65,000 to manufacture and promote Zeiss lenses, and generated approximately $728,315.28 in revenue from the sale of Zeiss products in 2018, an amount it expects to exceed in 2019.

The lawsuit follows Zeiss’ recent decision to manufacture Zeiss-branded freeform lenses and Zeiss-branded AR coatings exclusively through Zeiss labs, eliminating independent labs, effective January 1, 2019.