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COSMOCOM, INC. v. MARCONI COMMUNICATIONS INTERNATIONAL

May 13, 2003

COSMOCOM, INC., PLAINTIFF, AGAINST MARCONI COMMUNICATIONS INTERNATIONAL LIMITED, DEFENDANT


The opinion of the court was delivered by: Thomas C. Platt, United States District Judge

MEMORANDUM AND ORDER

Before this Court are: (1) plaintiff CosmoCom, Inc.'s ("Plaintiff" or "CosmoCom") motion for summary judgment brought pursuant to Fed.R.Civ.P. 56 and (2) defendant Marconi Communications International Ltd.'s ("Defendant" or "Marconi") cross-motion for partial summary judgment on Defendant's counterclaim for declaratory judgment and to dismiss Plaintiff's claim for unjust enrichment. Both parties have submitted statements pursuant to Local Rule 56.1

Plaintiff's motion for summary judgment is hereby DENIED in full. Defendant's cross-motion for summary judgment on its counterclaim for declaratory judgment and for a dismissal of CosmoCom's unjust enrichment claim is likewise DENIED.

BACKGROUND

The following facts are derived from the parties' Local Rule 56.1

Statements and are not in dispute except as noted.

A. The Parties

Plaintiff CosmoCom is a Delaware corporation with its principal place of business in Melville, New York. Plaintiff is a software products company that develops and licenses software for multimedia contact center platforms. Defendant Marconi, headquartered in London, is a provider of communications and information technology.

B. The Value Added Reseller Agreement & Amendment No. 1

This action involves a contract dispute. On or about March 3, 2000, CosmoCom and Marconi entered into the Value Added Reseller Agreement (the "Agreement"). Pursuant to the Agreement, CosmoCom agreed to deliver its software products to Marconi, and Marconi agreed to purchase and distribute CosmoCom's software products. In September 2000, the parties amended the Agreement with "Amendment No. 1." (Am. Compl., Ex. B.) Pursuant to Amendment No. 1, Marconi agreed to purchase a specific amount of product from CosmoCom during a defined period of time.

Section 14.2 of the Agreement states: "CosmoCom and [Marconi] agree that renewal of the Agreement will be assumed and automatically effective at the end of the first, second, third and fourth years, provided that neither party issues a notice of its intention to terminate." (Am. Compl., Ex. A, § 14.2.) Likewise, Section 14.3 of the Agreement sets forth the mechanism by which either party could terminate the Agreement if it chose not to renew the contract at the end of a given contract year.

In the event that a party wishes to terminate at the end of the first, second, third or forth year, Notice of such termination shall be issued at least three months before, to be effective at the end of. the then current year. Following such termination each party shall fulfill its obligations pursuant to any outstanding Purchase Orders and any rights and obligation of either party that may have accrued prior to the date of such termination shall not be affected.
(Id. § 14.3) (emphasis added).

CosmoCom alleges that under § 14.2, the Agreement was automatically renewed for additional one-year terms on March 3, 2001 and March 3, 2002. Marconi disputes this contention and claims that it notified CosmoCom of its intention to withdraw from the Agreement in October 2001, therefore, contrary to Plaintiff's allegations, the Agreement was not automatically renewed. Specifically, Marconi alleges that during a telephone conference between the parties on October 29, 2001, Marconi officials advised CosmoCom representatives that Marconi did not intend to renew the Agreement after completion of the first one-year period of performance. However, CosmoCom contends that during the course of the October 29th telephone conference, Marconi only "indicated that it was considering terminating the Agreement because it was `moving in a different direction.'" (Polani Reply Aff. ¶ 8) (emphasis added). Plaintiff allegedly did not consider the statements of the Marconi representatives to amount to an official termination of the Agreement.

In support of its position, Plaintiff points to Section 18.5 of the Agreement, which states that all notices of termination must be in writing. Section 18.5 of the Agreement mandates, in relevant part: "Any notice required or permitted by this Agreement shall be in writing and shall be deemed given if sent by prepaid registered or certified Air Mail (if available), or sent by telex or facsimile or similar communication and confirmed by such Air Mail. . . ." (Am. Compl., Ex. A, § 18.5.) Therefore, Plaintiff claims that since such written notice was not provided on October 29, 2001, the Agreement was not terminated by Defendant on that date.

Contrary to Plaintiff's contentions, Marconi claims that CosmoCom was aware of Marconi's termination of the Agreement. Marconi contends that subsequent to October 29, 2001, the parties entered into discussions to resolve any outstanding issues that may have arisen prior to termination of the Agreement. Furthermore, Marconi states that prior to commencing this litigation in January 2002, ...


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