DBL/Ingram Micro Punished for Internet Sales of Pinnacle Speakers

In a modern day David vs. Goliath, Pinnacle Speakers, a family owned and operated 36-year-old loudspeaker manufacturer, was victorious in binding arbitration against DBL Distributing / Ingram Micro Inc. (NSYE: IM). A panel of three arbitrators found in favor of Pinnacle Speakers in its claims against DBL and Ingram Micro for damages resulting from alleged unauthorized selling of Pinnacle products on the Internet, unfair competition and other breaches of their distribution agreement, according to a press release. The binding arbitration decision also includes a monetary award against DBL Distributing / Ingram Micro Inc. for DBL’s alleged unauthorized Internet sales, unfair competition, copyright infringement, plus monies due but not paid.

The arbitration panel stated: "Pinnacle is entitled to recover as against DBL its lost business value due to deliberate acts of DBL in opening sales of Pinnacle products on the internet for the purpose and with the result of harming Pinnacle's business."

Pinnacle sought a judgment on the award in the Southern District Court of New York. Mickey Rothenberg, vice president of sales and marketing for Pinnacle Speakers, says, “We at Pinnacle Speakers, a family owned and operated company, were forced to protect our brand and our business against Ingram Micro, the 75th largest corporation in the United States, and we are proud that we won. Our monetary award includes damages, plus attorney fees, plus our costs and expenses of this legal action.

“We hope this victory signals our resolve that we will not tolerate our brand being sold and tarnished through unauthorized and uncontrolled online businesses. We have to protect the way we choose to go to market, along with our intellectual property and the high stature of the Pinnacle Speakers brand in the market; a stature and reputation we have proudly built over nearly four decades,” adds Rothenberg, who, along with Marc and Rich Rothenberg, own Pinnacle Speakers.

Pinnacle Speakers was represented by Greenberg Traurig and the legal team was led by Adam B. Landa, an intellectual property law litigator. Pinnacle Speakers had an authorized distributor agreement with DBL Distributing / Ingram Micro Inc. Pinnacle sought relief in arbitration for claims made against DBL Distributing / Ingram Micro Inc. for violations of that agreement. Pinnacle Speakers brought the action in New York City. After four days of hearings, a panel of three arbitrators appointed by the American Arbitration Association found in Pinnacle’s favor, and awarded damages AND attorney’s fees.

With the legal battle behind the company, Pinnacle’s engineers have been hard at work on re-engineering its flagship series Black Diamond Series II. Also coming are powered speaker bars, wireless powered subwoofers, and a new product category to be announced shortly.