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DBL/Ingram Micro Punished for Internet Sales of Pinnacle Speakers

Pinnacle Speakers has won a legal arbitration decision and monetary award against DBL Distributing/Ingram Micro for alleged unauthorized Internet selling, unfair competition and other breaches of their distribution agreement.


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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.




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Article Topics

News · Audio · Speakers · Distributors · Legal · Legal · Pinnacle Speakers · All topics

About the Author

Jason Knott, Editor, CE Pro
Jason has covered low-voltage electronics as an editor since 1990. He joined EH Publishing in 2000, and before that served as publisher and editor of Security Sales, a leading magazine for the security industry. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He is currently a member of the CEDIA Education Action Team for Electronic Systems Business. Jason graduated from the University of Southern California.

5 Comments (displayed in order by date/time)

Posted by Whitevan Lifestyle  on  02/22  at  10:46 AM

And this is how you win dealers.
Kudos to Pinnacle.

Posted by Chris  on  02/22  at  11:19 AM

Nice!

I’m not familiar with their speakers but love their slogan:

“Speakers of the House Since 1976”

Posted by ray Windsor  on  02/22  at  11:41 AM

BRAVO !!!

To the many who claim, “it can’t be done, we have no control, our brand is too popular just lower your price and sell more, manufacturers don’t care, if consumers want it they will get it from the internet regardless of the manufacturer’s policies…” and all of the other fatalist observations, have a look at Pinnacle’s commitment to their policies and commitment to manage their brand according to those policies.

It can be done.  It is being done.  Specialty retailers who care should be paying attention. 

It shall be my sincere hope that this specific event and the topic in general receives lots of attention.

Ray Windsor
German Maestro

Posted by Chris dePaola  on  02/22  at  03:09 PM

I really dislike policies like these… I would like manufacturers to sell me their product at the margin they want and then let me decided how to sell them to consumers and at what margin I’d like to make.

I sell nothing on the internet, but its here to say as are internet sales. We all better learn to deal with it and find a way to be competitive.  Consumers I speak to tell me that if they can’t find at a minimum the MSRP of a product on the internet they will not purchase it.

Posted by Mike  on  02/22  at  07:04 PM

Its about time those sleeze bags at Ingram got what they deserve.  Their little buddy avad is a joke of a supplier.  Me and my company will not support them and this is the first step to break them down a little.

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