By Memorandum Order entered by The Honorable Leonard P. Stark in GN Netcom, Inc. v. Plantronics, Inc., Civil Action No. 12-1318-LPS (D.Del. September 29, 2017), the Court denied Defendant Plantronics, Inc.’s motion for summary judgment which contended that any foreclosure effect of Defendant’s exclusive dealing arrangement with its distributors was negated by Plaintiff GN Netcom, Inc.’s ability to circumvent the exclusive dealing arrangement by accessing the end-users directly. In other words, Plantronics argued that GN could not show substantial foreclosure of the market for the telephone headsets at issue because GN could make sales calls directly to the contact center and office end-users with delivery effected by any of the hundreds of resellers that GN uses, including some of the Plantronics Only Distributors (“PODs”) themselves. Id. at *5. As support for the proposition, Plantronics referred to GN’s recent, successful history of reaching out to end users in this manner (“solution selling”), which resulted in significant “wins” and growth in market share for GN. Id.
The Court, however, noted that “[t]he core question presented by the motion is whether, taking the evidence in the light most favorable to GN, Plantronics has demonstrated that a reasonable juror could find only that GN had adequate, ‘available,’ ‘viable,’ and/or ‘effective,’ alternative means of distribution, notwithstanding Plantronics’ POD program. The ‘mere existence of other avenues of distribution’ is not enough on its own. Instead, there must be an ‘assessment of [the alternative means’] overall significance to the market,’ and such alternative means must be ‘practical or feasible in the market as it exists and functions.” Id. at *6.
Ultimately, the Court found that Plantronics could not meet the summary judgment standard to show that the only reasonable conclusion to be drawn from the record is that distribution through PODs is an adequately available, viable and/or effective means of distribution for GN. Id. at *8-9. Although the Court noted the record contains substantial evidence from which a jury might reasonably find that GN could adequately compete for business, Plantronics failed to show that was the only conclusion a jury could reasonably reach. Id. at *9. Thus, summary judgment was denied.
A copy of the Memorandum Order is attached.
An interesting and notable take away from this case is that, due to certain discovery spoliation by Plantronics concerning the deletion of emails, the Court had previously imposed monetary and evidentiary sanctions on Plantronics, including a permissive adverse inference instruction to be given at trial and being required to seek leave of Court before filing any motion for summary judgment – given the impact that the spoliation and permissive adverse inference could have on the resolution of any motion for summary judgment. See id. at *2. It leaves one wondering whether this would have been a case appropriate for summary judgment but for the sanctions and adverse inferences against Plantronics due to its spoliation.