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Impax Media Inc. v. Northeast Advertising Corp.

United States District Court, S.D. New York

January 10, 2018

IMPAX MEDIA INC., Plaintiff,
v.
NORTHEAST ADVERTISING CORP. D/B/A ADCORP MEDIA GROUP, ADCORP360 INC. AND PETER BROCCOLE, Defendants.

          Attorneys for Plaintiff TRACHTENBERG RODES & FRIEDBERG LLP By: David G. Trachtenberg, Esq. Stephen Arena, Esq.

          Attorney tor Defendants ABRAMS, FENSTERMAN, FENSTERMAN, EISMAN, FORMATO, FERRARA, WOLF & CARONE, LLP

          OPINION

          ROBERT W. SWEET U.S.D.J.

         Plaintiff Impax Media Inc. ("Impax" or the "Plaintiff") has moved by order to show cause for a preliminary injunction to prohibit Defendants Northeast Advertising Corp. d/b/a AdCorp Media Group ("AdCorp"), AdCorp360 Inc., and Peter Broccole ("Broccole" and, collectively, the "Defendants") from competing with Impax by installing or contracting to install new digital signage platforms at supermarket checkout counters during the term of the Impax-AdCorp Commission Sales Agreement in the territory of the northeastern United States and Washington D.C.

         For the reasons set forth below, Plaintiff's motion is denied.

         Prior Proceedings

         On October 26, 2017, Plaintiff filed their Complaint against Defendants alleging breaches of contract and fiduciary duty, tortious interference with contract and prospective business advantage, false advertising, misappropriation of trade secrets, and unfair competition. See Compl. ¶¶ 107-91, Dkt. No. 1. That same day, Plaintiff moved for the instant preliminary injunction. Dkt. No. 4. On December 13, 2017, the motion was heard and marked fully submitted.

         Facts

         The following facts are taken from the briefs, affidavits, and exhibits submitted by the parties for the instant motion.

         Impax is a Canadian corporation that provides a digital advertising and communications platform compromised of digital video screens that advertise customer-focused context and advertising (the "Impax Digital Signage Platform"). Declaration of Shmuel Gniwisch dated October 25, 2017 ("Gniwisch Decl.") ¶¶ 2-4. Impax installs its digital signage largely in supermarkets and generates revenue through the sale of advertising spots that run in continuous loops on the display screens. Id. ¶¶ 3, 8.

         Adcorp and AdCorp360 Inc. are New York corporations that pay supermarkets and other venues to permit the installation of digital and print advertising platforms. Declaration of Peter Broccole dated December 1, 2017 ("Broccole Decl.") ¶¶ 7-8.[1] Broccole is the president and Chief Executive Officer of Adcorp. Gniwisch Decl. ¶ 11.

         In mid-2015, Impax and AdCorp began discussing the possibility of Impax engaging AdCorp to provide advertising sales services for Impax in the northeastern part of the United States, including Washington D.C. Gniwisch Decl. ¶ 16; id. Ex. C. Impax was interested in working with AdCorp to acquire introductions to retail supermarkets in the United States with which AdCorp had relationships. Gniwisch Decl. ¶¶ 17-19.

         One such supermarket retailer was Wakefern Food Corporation ("Wakefern"), the largest owned grocery store cooperative in the United States. Gniwisch Decl. ¶ 19. Around August 2015, AdCorp informed Impax that AdCorp would prepare and deliver a presentation to Wakefern to market the Impax Digital Signage Platform. Gniwisch Decl. ¶ 23; see id. Ex. E. While Impax and ACorp negotiated the terms of their written agreement, negotiations between AdCorp and Wakefern also continued. Around mid-2016, however, Wakefern terminated its discussions with Impax. Declaration of Dominick Porco dated October 25, 2017 ("Porco Decl.") ¶¶ 3-4, 8. In August 2016, Impax learned that Wakefern had entered into an agreement to have AdCorp install AdCorp's own digital signage. Porco Decl. ¶ 4. Upon inquiry, AdCorp represented to Impax that AdCorp only sold its own signage to Wakefern because Wakefern was not interested in contracting for Impax's signage technology, which used facial recognition software, termed "Tru-Reach" technology.[2] Porco Decl. ¶ 6, Broccole Decl. ¶¶ 35-40. When confronted about the Wakefern contract, Broccole informed Impax that AdCorp would limit their digital media screen sales going forward, focus on print advertising, and would continue to serve as Impax's exclusive agent for the sale of local advertising. Porco Decl. ¶ 7.

         On August 15, 2016, Impax executed the Commission Sales Agreement (the "Agreement"), which was executed by AdCorp on September 8, 2016. See Gniwisch Decl. Ex. G. ...


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