Banner ordered to stop selling Web program for retailers
Court says it may breach confidentiality agreements with Home Line Inds.
Heath Combs -- Furniture Today, June 22, 2009
PHILADELPHIA — A district court here has issued a preliminary injunction against Banner Retail Marketing to stop selling a Web site program for retailers that may breach confidentiality agreements it had with manufacturer and distributor Home Line Inds.
Banner officials declined to comment for this story. Home Line officials said they will continue offering the program to retailers.
According to court documents, Home Line marketing officials began developing a Web partner program in late 2007. The idea was to allow retailers access to a Web site developed and maintained by Home Line, but customizable by the retailer, at a fraction of the cost a retailer would pay to develop its own site.
Home Line was prepared to start selling the service in 2008 and hired Banner for marketing services. Banner officials signed confidentiality agreements covering Home Line's Web program.
Early this year, the court documents said, Home Line officials learned that Ashley Furniture was developing a similar Web-based program with Banner. Ashley officials declined to comment for this story.
Banner officials said the company had started developing its Web partner program in early 2008, and outsourced work to a company that created a program similar to Home Line's. But Home Line officials told the court they believed it was essentially a copy of their program.
In granting the injunction, the court agreed with Home Line and said Banner — at the very least — should have told Home Line about it and sought approval.
The court said Banner's program "seriously affected the financial viability of the (Home Line program) as it was sold to Home Line's same retail customers, and was destroying the competitive edge Home Line achieved by being the first to offer such a program."
The injunction forbids Banner from selling, marketing or further developing the Web-based program in question.
Banner officials argued in court that the concept of Web sites provided by suppliers to retailers is not new in marketing.
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