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GIDATEX, S.R.L. v. CAMPANIELLO IMPORTS

June 2, 1998

GIDATEX, S.R.L., Plaintiff, against CAMPANIELLO IMPORTS, LTD., CAMPANIELLO IMPORTS OF FLORIDA, LTD., and CAMPANIELLO ENTERPRISES, INC., Defendants.


The opinion of the court was delivered by: SCHEINDLIN

OPINION AND ORDER

 SHIRA A. SCHEINDLIN, U.S.D.J.:

 Plaintiff Gidatex, S.r.L. ("Gidatex") filed a Complaint on December 30, 1997, alleging violations of the Lanham Act, 15 U.S.C. §§ 1114(1) and 1125(a), common law trademark infringement and common law unfair competition. Plaintiff now moves to enjoin defendants Campaniello Imports, Ltd., Campaniello Imports of Florida, Ltd., and Campaniello Enterprises, Inc. (hereinafter collectively referred to as "Campaniello" or "defendant") from using plaintiff's "Saporiti Italia" trademark in connection with the sale of furniture. Plaintiff is also moving for expedited discovery. For the following reasons, these motions are denied.

 I. Factual Background

 A. Campaniello's Prior Distribution Agreement

 In 1974, Campaniello agreed to become a distributor for two Italian furniture manufacturers, Fratelli Saporiti Industria Arredamenti, S.n.c., and Proposals, s.r.1. See Declaration of Thomas Campaniello, president and sole shareholder of each of the Campaniello businesses ("Campaniello Dec.") at P 3. Campaniello's sales territory grew to encompass the United States, Canada, Mexico, the Caribbean, Central America and South p America. See id. Sometime in the mid-1970's, the manufacturers began selling their furniture under the "Saporiti Italia" name. The manufacturers merged in 1982, adopting "Saporiti Italia" (hereinafter "Saporiti") as their new corporate name. See id. Largely as a result of its marketing efforts, according to Campaniello, Saporiti Italia became a well-known brand in the high-end furniture market. See id. at P 4.

 B. The Termination of the Distribution Agreement

 Under the supervision of an Italian bankruptcy court, Saporiti leased its assets to Gidatex in 1994. See id. at P 5. Gidatex and Campaniello entered into a distributorship agreement similar to the one between Saporiti and Campaniello, but they were unable to sustain an amicable relationship. See id. at PP 5-9. After a series of disputes, Gidatex terminated the agreement in December, 1995. See id. at 10. Its counsel warned Campaniello at that time that it considered Campaniello's use of the Saporiti Italia mark to constitute trademark infringement. See Declaration of Thomas G. Bailey, Jr., plaintiff's counsel ("Bailey Dec."), Ex. B.

 At the time of the termination, Campaniello had in stock approximately $ 1 million worth of Saporiti Italia furniture. See id. at P 11. In the intervening two and a half years, it has sold approximately two-thirds of that stock. See id. at P 14. It maintains signs bearing the Saporiti Italia name on its showrooms in New York City, Dania, Florida, and Dallas, Texas, as well as telephone listings under the Saporiti Italia name in those cities. See id. at P 15. It has not been able to sell its entire Saporiti Italia stock, it claims, largely because it now lacks access to the customized services that Saporiti and Gidatex formerly provided, and which high-end designer furniture customers demand. See id. at P 13.

 C. Prior Litigation

 On October 16, 1995, Campaniello sued Saporiti and Gidatex in this Court, asserting claims for unjust enrichment and fraud. See Campaniello Imports, Ltd. v. Saporiti Italia S.P.A., 1996 U.S. Dist. LEXIS 11064, No. 95 Civ. 7685, 1996 WL 437907, at *3 (S.D.N.Y. Aug. 2, 1996), aff'd, 117 F.3d 655 (2d Cir. 1997). The district court dismissed all of Campaniello's claims, see id. at *9, a decision that was affirmed by the Second Circuit on June 26, 1997.

 II. Discussion

 A. Plaintiff's Motion for a Preliminary Injunction

 Gidatex now requests an injunction requiring Campaniello to remove the Saporiti Italia signs currently on display at its showrooms and to cease listing its phone number under the Saporiti Italia name. To obtain preliminary injunctive relief, a party must demonstrate (1) that it is likely to suffer irreparable injury absent the injunction, and (2) that it is likely to succeed on the merits of its claim. The second requirement may also be satisfied by a showing that the claim raises serious legal questions, and that the balance of hardships tips decidedly in favor of the moving party. See Sal Tinnerello & Sons, Inc. v. Stonington, 1998 U.S. App. LEXIS 6695, 97-7919, 1998 WL 152981, at *5 (2d Cir. Apr. 3, ...


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