Compuserve, Inc. v. Vigny International Finance Ltd.

760 F. Supp. 1273, 1990 WL 277461
CourtDistrict Court, S.D. Ohio
DecidedAugust 16, 1990
DocketC2-90-341
StatusPublished
Cited by27 cases

This text of 760 F. Supp. 1273 (Compuserve, Inc. v. Vigny International Finance Ltd.) is published on Counsel Stack Legal Research, covering District Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Compuserve, Inc. v. Vigny International Finance Ltd., 760 F. Supp. 1273, 1990 WL 277461 (S.D. Ohio 1990).

Opinion

OPINION AND ORDER

GEORGE C. SMITH, District Judge.

This matter is before the Court upon defendant’s, Vigny International Finance, Ltd. (hereinafter “Vigny”), motion for temporary restraining order filed May 29, 1990. In response to this motion, this Court on May 30, 1990 held a preliminary conference pursuant to Rule 3.7.1 of the *1275 Rules of the United States District Court, Southern District of Ohio. Following said conference, on May 31, 1990, a stipulation and order was entered whereby this matter was set for an oral hearing on June 13, 1990. It was further ordered that each party was to file a memorandum of law with respect to the arbitration issue. The parties were instructed that simultaneous briefs were to be filed no later than 5:00 p.m. on June 8, 1990. Further, the parties were allowed to file a reply, which was due no later than Monday, June 11, 1990. The plaintiff, CompuServe, Inc. (hereinafter “CompuServe”) voluntarily agreed not to discontinue the provision of the on-line computer services in dispute to Vigny’s South American subscribers prior to July 31, 1990. In consideration of that, Vigny voluntarily agreed to deposit the sum of $6,000.00 with the Court on or before the June 8, 1990 date. Vigny likewise was ordered to promptly initiate proceedings for arbitration of the claims asserted in their counterclaim in order to expedite the arbitration process, should this Court ultimately rule arbitration was mandated. It must be noted, that CompuServe on May 11, 1990, filed a complaint for injunctive relief within this court which initiated this case. Therefore, while this Court was moved into action with the filing by Vigny of the temporary restraining order, this Court will also address the filing of the complaint for injunctive relief.

FACTS

On October 26, 1987, CompuServe and Vigny entered into a written agreement, entitled “License and Distributorship Agreement”. In the Agreement, Vigny was authorized as a distributor and licensee for the purposes of selling, marketing and distributing the CompuServe product, specifically called the CompuServe Business Service, to residents of South America and Mexico. After the date of the original agreement, on or about May 11, 1989, a document entitled “Addendum to License and Distributorship Agreement” allowed Vigny to sell and market CompuServe Consumer Information Service throughout the same geographic territory. These two documents incorporate the agreements between the parties. The agreement licensed Vigny to use many of CompuServe’s trademarks, trade names, and other proprietary marks, including the trademark and trade name “CompuServe”. Vigny proceeded to market and sell the CompuServe service lines.

According to Vigny, they have used their expertise, business contacts and knowledge of international finance and business to market the products of CompuServe. Said marketing has resulted in the formation of three written contracts in Venezuela, Chile and Argentina. A fourth contract was negotiated and agreed to by all the parties, but not signed, within another region. Vig-ny alleges that each of these agreement was entered into with the knowledge, approval, and consent of CompuServe. Further, the employees of CompuServe took part in the negotiations and technical coordination and each was subsequently ratified in its written form by CompuServe.

Vigny, in the latter part of 1989, entered into negotiations with a company in Mexico called Banamex. These negotiations had the objective of providing services to subscribers in Mexico. Thereafter, in late October, 1989, the representatives of Bana-mex, CompuServe and Vigny met. As a result of that meeting, Vigny and Banamex signed an agreement on October 31, 1989 which contemplated further negotiation and agreements between the parties. These negotiations continued into early January, 1990, where all three parties again met in Mexico City to finalize the contractual arrangements. CompuServe, as alleged by Vigny, was represented at these meetings. Thereafter, a draft agreement was completed by the attorneys for Banamex and Vigny on January 10, 1990. According to Vigny, as of the January 10, 1990 date, there was no indication from CompuServe that there was any intent to terminate its agreement with Vigny or that it did not intend to execute the agreement with Banamex and Vigny. However, instead of signing the written agreement which had been negotiated by the parties and Banamex, on January 16,1990, Compu- *1276 serve’s President, Charles McCall, sent two letters to Raul Buenaventura, President of Vigny. These letters stated that they constituted notice of CompuServe’s intent to terminate the agreement. Thereafter, as of the January 16, 1990 date, CompuServe exercised its contractual right to terminate the agreement effective 30 days later.

CompuServe would take issue with many of the factual statements raised by Vigny. According to CompuServe, they provided Vigny with the license, services, products and the necessary support services, including the needed information to successfully tap the South American and Mexico markets. Vigny, however, simply failed to perform the agreed duties as the distributor and licensee. Therefore, according to CompuServe, more than two years after the execution of the agreement, Vigny has failed to generate the first dollar of the business service revenue and has produced a relatively small amount in consumer service fees. CompuServe alleges that Vigny as the distributor and licensee in South America and Mexico has distributed very little. CompuServe relies upon their complaint for injunctive relief to specifically address the breaches of the agreement by Vigny; however, some of the alleged breaches included: licensee defaults, the failure to generate revenues equal to the agreed minimums, the failure to pay amounts due, the unauthorized transfer of rights to CompuServe services, the disclosure of CompuServe confidential information, the failure to properly register CompuServe’s proprietary marks, and the improper representation of Vigny as a CompuServe agent. Vigny refutes the aforementioned.

LAW AND ANALYSIS

Before this Court are two separate sets of motions, one filed by the plaintiff and one by the defendant, both asking for equitable relief. CompuServe, on May 11, 1990, filed a complaint for injunctive relief. Within that complaint, CompuServe prays for an order permanently enjoining Vigny from engaging in operating as the distributor of CompuServe; representing or communicating with any person that Vigny is the licensee and distributor of CompuServe services and products; displaying or using in any way the trademark and trade name “CompuServe”; infringing upon any of CompuServe’s other proprietary marks; and any other equitable relief which this Court deems appropriate.

Vigny on May 29, 1990, filed a motion for a temporary restraining order and asked this Court to restrain CompuServe from terminating its on-line services to the subscribers in Argentina and Chile. Before the Court also stands two simultaneous motions which were filed as directed by the Order of this Court on May 31, 1990. These motions within this matter are paramount, because the language specifically contained within the License and Distributor Agreement and the Amendment thereto specifically makes reference to injunctive relief and mandatory arbitration provisions.

A. CONTRACT PROVISIONS

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Bluebook (online)
760 F. Supp. 1273, 1990 WL 277461, Counsel Stack Legal Research, https://law.counselstack.com/opinion/compuserve-inc-v-vigny-international-finance-ltd-ohsd-1990.