Silent Gliss Inc., Plaintiff v. Silent Gliss International Ltd., Silent Gliss Holding Ltd., Silent Gliss Limited, et al.,1 Defendants MEMORANDUM & ORDER This case arises out of a contract dispute between Silent Gliss International Ltd., a Swiss manufacturer of window treatments, and its (previously) authorized United States distributor, Silent Gliss Inc. Broadly speaking, the U.S. distributor says that after its relationship with the manufacturer broke down, the manufacturer interfered with the U.S. entity’s efforts to sell its remaining inventory, in violation of the parties’ contractual arrangements. The U.S. distributor filed suit in this Court and now moves for injunctive relief. See ECF No. 14. For the reasons set out below, Plaintiff’s motion is denied. I. Background A. Factual Background Silent Gliss International (the lead defendant, which I will call “SG International”) is based in Bern, Switzerland. It manufactures window shades, blinds, and the like.2 Compl. 17, ECF No. 1-1. In 2014, SG International entered a “License and Distribution Agreement” (“LDA”) with plaintiff Silent Gliss Inc. (“SG USA”) pursuant to which SG USA received the exclusive right to market and distribute SG International’s products in the United States. License & Distribution Agreement (“LDA”) §1.1, Ex. to Aff. of Ezra Bibi (“Bibi Aff.”), ECF No. 14-6. SG International does not own SG USA in whole or in part, and they are not part of a common corporate structure. See Rule 7.1 Statement, ECF No. 5. Instead, the relationship between the two is purely contractual. See LDA at 1-2. Approximately two years later, SG USA entered into another agreement with one of SG International’s affiliates — a Delaware company called Silent Gliss Corp. (“SG Corp.”). Compl. 98. This agreement, which the parties call the “SG Corp. Agreement,” set out certain ways in which SG Corp. would “provide assistance to” and “support” Plaintiff in the United States. Id. 6. SG Corp. had one employee, Michael Heath, who was tasked to “work with” SG USA to “assist with the development of SG USA.” Id. 98. Despite SG Corp.’s contractual obligation to assist SG USA, Heath was not employed by SG USA, and he had other obligations, see Decl. of Michael Heath (“Heath Decl.”) 4, ECF No. 17; the SG Corp. Agreement capped his efforts to assist SG USA at fifty percent of his time. SG Corp. Agreement §1.1, ECF No. 14-7. The LDA gave SG International the right to terminate its arrangement with SG USA on six months’ notice if SG USA failed to meet certain profitability thresholds. LDA §14.2(b). As it happened, SG USA did fail to meet those thresholds, and SG International terminated the agreement in February 2020. See Notice of Termination of LDA, ECF No. 14-10 (invoking LDA §14.2(b) (“Early Termination of Agreement”)). SG USA does not contest SG International’s right to terminate the agreement, butsays that after SG International did so, it (and its affiliates) breached certain contractual provisions — in both the LDA and the SG Corp. Agreement — that survived termination. SG USA’s complaint and motion for injunctive relief describe the basis for relief in fairly broad generalities. Plaintiff contends that post-termination, SG International was required to purchase SG USA’s remaining inventory (or cause a third party to make the purchase), see generally LDA §15.3, but that SG International did neither. Pl.’s Mem. in Support of Prelim. Inj. (“Pl. Br.”) 25. SG International declined to do so based on its determination that SG USA had failed to satisfy a condition precedent to SG International’s purchase obligation — namely, the obligation to “provide a written list of inventory” — because SG USA did not provide adequate and accurate information about its inventory. Def.’s Mem. in Opp. to Prelim. Inj. (“Def. Opp.”) 13, ECF No. 15. Regardless of its reasoning, SG International’s decision not to purchase SG USA’s remaining inventory upon termination implicated Section 15.4 of the LDA, which provides that if SG International does not purchase the inventory or cause the purchase thereof, SG USA will “have the right to sell off its remaining property in the ordinary course of business” during what the LDA terms the “Sell-Off Period.” This right to sell SG USA’s inventory forms the basis of the motion for injunctive relief. SG USA contends that SG International interfered with SG USA’s efforts to sell its inventory during the Sell-Off Period. Pl. Br.
25, 46. This interference consisted, according to SG USA, of “Mr. Heath continu[ing] to solicit former clients,” Compl. 101; disparaging SG USA and “convey[ing] lies to discredit [SG USA's] role within the SG organization,” id. 103; and advising clients that SG USA “no longer [was] permitted to sell…Silent Gliss products.” Id. In addition, SG USA alleges, the defendants “fail[ed] to take the necessary steps to protect SG USA’s exclusive Territory as required” under the LDA. Id. 104. B. Plaintiff’s Claims and Request for Injunctive Relief SG USA contends that SG International has committed a series of legal violations that entitle it to injunctive relief. These include, first, breach of contract. Among other provisions, SG USA says defendants violated Section 1.1 of the LDA, in which SG International granted SG USA an “exclusive license” to sell Silent Gliss products in the defined territory. SG USA also invokes the “confidentiality and restrictive covenants” in the SG Corp. Agreement, see Pl. Br. 12; this appears to be a reference to Mr. Heath’s alleged continued use of SG USA’s client lists. See id.
