United States District Court, E.D. Pennsylvania
RONALD L. BUCKWALTER, District Judge.
Pending before the Court is Plaintiff Red Online Marketing Group, LP, d/b/a/ 50onRed ("50onRed")'s Motion for a Temporary Restraining Order and a Preliminary Injunction. The Court has reviewed Plaintiff's Motion, Defendants' Response in Opposition, and counsel's arguments at a hearing before this Court on April 1, 2014. For the following reasons, Plaintiff's Motion for a Temporary Restraining Order is denied and the Court will hold a hearing on Plaintiff's Motion for a Preliminary Injunction.
I. FACTUAL AND PROCEDURAL HISTORY
Plaintiff 50onRed is a Pennsylvania limited partnership with its principal place of business in Pennsylvania. (Am. Compl. ¶ 5.) Defendants Revizer Limited and Revizer Technologies (collectively "Revizer") are Israeli limited liability companies with their principal places of business in Israel. (Id. ¶¶ 6-11.)
50onRed is an Internet marketing company "whose proprietary technology enables its customers to conduct, manage and optimize their digital advertising campaigns across its exclusive distribution network[.]" (Id. ¶ 15.) 50onRed's software "automatically detects available space on websites or other digital content where advertising units may be displayed[, ]" "displays ad units to an Internet user for sponsored articles[, ]" "provide[s] an Internet user with coupons or discounts relevant to content currently being accessed[, ]" displays "full-page advertisement[s] that appea[r] based on certain triggers or conditions[, ]" and "shows an Internet user multiple sources for a product for which she has been searching and compares the prices from these various sources." (Id. ¶ 18.) Revizer is a "software and technology company" that "provides tools... that allow developers of software applications... to generate revenue from their freely-distributed software by displaying advertising." (Defs.' Resp. to Pl.'s Mot. for TRO, Decl. of Daniel Sagis ¶ 2.)
On June 11, 2012, 50onRed and Revizer entered into an Agreement in which Revizer obtained a "limited non-exclusive license to use 50onRed's proprietary Monetization Services' solely in connection with its own downloadable software, " and permitted Revizer to "distribute 50onRed's advertising products... only on its own downloadable software applications" and then collect "a share of the revenue generated" from such distribution. (Am. Compl. ¶¶ 20, 27, 29.) In exchange, Revizer agreed not to "develop, market, sell, license or provide any software, technology or services that are similar to, or competitive with, the monetization services provided under the Agreement or [50onRed's] proprietary optimization and behavioral advertisement targeting technology, methodology, or algorithms." (Id. ¶ 21) (quoting Agreement § 5.2).) The Agreement also contained a provision stating that "any breach... would result in irreparable injury" and that the complaining party would be entitled to injunctive relief. (Pl.'s Mot. for TRO, Decl. of Stephen Gill ("Gill Decl.") ¶ 30 (quoting Agreement § 5.3).)
Plaintiff 50onRed alleges that, in or around January 2013, Revizer began "marketing and illegally brokering 50onRed's software to distributors, including those it learned of only through 50onRed, and other third parties" and eventually "reverse engineered 50onRed's proprietary software, developed competing software, and began marketing its own version[.]" (Am. Compl. ¶¶ 37, 38.)
In or around August 2013, 50onRed discovered Revizer's alleged activities and, on August 20, 2013, advised Revizer's CEO that it had "reason to believe Revizer was illegally competing with 50onRed in violation of the Agreement." (Id. ¶ 46.) On August 26, 2013, Revizer sent 50onRed an e-mail indicating that it "decided to stop syndicating" its own software. (Id. ¶ 47.) Weeks later, on September 13, 2013, Revizer informed 50onRed via e-mail that a "severe issue has been brought to our attention" causing it to "pause" distributing 50onRed's services pursuant to the Agreement. (Id. ¶ 50.)
In January 2014, following Revizer's receipt of a substantial investment from a third party, 50onRed and Revizer engaged in negotiations to draft a new agreement to replace the existing one. (Id. ¶¶ 58-59.) Those negotiations did not result in a new agreement. (Id. ¶ 59.)
On March 6, 2014, 50onRed initiated the present litigation and, on March 19, 2014, filed the pending Motion for a Temporary Restraining Order and a Preliminary Injunction. Revizer filed its Response in Opposition to the Motion on April 1, 2014. On that same date, this Court conducted a hearing on the pending Motion on the issue of the temporary restraining order only. That issue is now ripe for review.
Plaintiff 50onRed seeks a temporary restraining order pursuant to Federal Rule of Civil Procedure 65. Fed.R.Civ.P. 65. To be entitled to a temporary restraining order or a preliminary injunction, a movant must show, "(1) a likelihood of success on the merits; (2) he or she will suffer irreparable harm if the injunction is denied; (3) granting relief will not result in even greater harm to the nonmoving party; and (4) the public interest favors such relief." Bimbo Bakeries USA, Inc. v. Botticella , 613 F.3d 102, 109 (3d Cir. 2010) (quoting Miller v. Mitchell , 598 F.3d 139, 147 (3d Cir. 2009)).
After reviewing the parties' briefs and hearing counsel's arguments, the Court is not convinced of the likelihood of 50onRed's success on the merits of its claim. Even assuming- for the purposes of the pending Motion only- that 50onRed has satisfied the "likelihood of success on the merits" prong, it has failed to meet its burden to show that it will suffer "irreparable harm if the injunction is denied" at this early stage.
In support of the argument that 50onRed will suffer "irreparable harm" if it is not granted a temporary restraining order, 50onRed cites section 5.3 of the Agreement, which states that "any breach... would result in irreparable injury." (Gill Decl. ¶ 30.) While courts have previously found these types of provisions "instructive, " these provisions are not "dispositive to [the court's] irreparable harm analysis." USA Techs., Inc. v. Tirpak, No. Civ.A. 12-2399, 2012 WL 1889157 at *5 (E.D. Pa. May 24, 2012). Indeed, "[p]arties ...