The opinion of the court was delivered by: Thomas J. McAVOY, Senior United States District Judge
Plaintiffs Enjoy the City, Inc. (ETC) and Enjoy the City North, Inc. (ETC North) bring this action to recover for trademark infringement and violations of New York State unfair competition laws and to enforce non-compete agreements signed by Defendants Jeff Stranger and J.L.S. Enterprises. Presently before the Court are Plaintiffs' motion for a preliminary injunction and Defendants' cross-motion to change venue.
ETC is a New York corporation with its principal place of business in Birmingham, Alabama. It is the owner of the registered trademark "Enjoy the City" and the accompanying logos. ETC has used the trademark "Enjoy the City" and accompanying logos since October 2001 and has used the trademark in commerce since March 2002.
ETC North is a New York corporation with its principle place of business in New York but which operates its business in several states. ETC North creates, manufactures and distributes a merchant discount coupon book (the ETC Book) under the ETC mark which it uses by permission of ETC. ETC North obtains the merchants for the book, creates the book, and signs distributors to distribute the book to non-profit groups who resell the books as fundraisers for their groups. Distributors pay ETC North for the books and keep a percentage of the profit when the books are sold by the non-profit groups.*fn1
ETC North's Books are Designed in New York and India, and are Printed in New York
In February 2006, a representative of ETC North met Defendant Stranger at a fund raising industry trade show in Atlantic City, New Jersey. Stranger, a California resident, began negotiating the terms of a Distribution Agreement that would allow him and his business, J.L.S. Enterprises, to be the exclusive distributor of the ETC North book in the San Diego, Stockton, and Sacramento, California territories for a one year period. Stranger continued the negotiations from his office in California, and signed the initial Distribution Agreement in his office on April 5, 2006.*fn2
Stranger contends that there were problems with the ETC North books supplied under the Distribution Agreement because certain merchants in San Diego advised him that they had not authorized the coupons used in the ETC North book. Stranger asserts that because of these problems, he was forced to close down his San Diego market and to make "manual adjustments" to the books offered in Sacramento and Stockton. When Stranger requested a refund of money he paid to ETC North for the books, he was instead offered an exclusive distributorship in Fresno, California. He agreed and, in October 2006, executed an exclusive Distribution Agreement covering Fresno.*fn3 Subsequently, Stranger executed similar Distribution Agreements for Sacramento (April 3, 2007) and Stockton, California (June 11, 2007).*fn4
All of the Distribution Agreements contain identical provisions prohibiting Stranger from engaging in any activity that directly competes with the ETC Book while operating under the distributorship and for one year after its termination in any area where ETC North distributes the ETC Book. The Distribution Agreements also contain identical provisions selecting New York law to be applied to any dispute arising under the agreements, and selecting Broome County, New York as the exclusive venue to litigate any such disputes.
Plaintiffs assert that Stranger and J.L.S. Enterprises breached the Fresno Dsitribution Agreement by failing to pay for copies of the Fresno ETC Book. Based upon this purported breach, and other alleged activity by Stranger that Plaintiffs contend was in violation of the Distribution Agreement, ETC North sent a letter to Stranger giving him 30 days to cure the breaches or advising that the distributorship would terminate. Stranger did not respond. Plaintiffs assert:
Subsequently, ETC North learned that Stranger had set up a competing business, Z Best, and was representing that Z Best was the "West Coast Division of ETC" in order to promote Z Best's merchant discount coupon book. Z Best's book is virtually identical to the ETC Book. Thereafter, ETC North began receiving complaints about Stranger's and Z Best's conduct.
ETC North was also threatened with a lawsuit as a result of Stranger's and Z Best's representations. ETC North also learned that Stranger and Z Best were using the ETC name, and the ...