HENRICO, Va. (CN) - The manufacturer of novelty gun-themed shot glasses breached an exclusive distribution contract and began selling the glasses on its own, the aggrieved distributor claims in a lawsuit.
In a complaint filed in the Henrico County, Va. circuit court, Beam Distributing Inc. says it has lost more than $750,000 in sales of the shot glass, which is "styled after the m16 flash suppressor."
It also claims that even before the contract breach was discovered, the defendant, Leitner-Wise Manufacturing, failed to produce the MuzzleShot glasses in the timely fashion required under the sale contract.
A flash suppressor is a device attached to the muzzle of a rifle that reduces the visibility of the flash that occurs when the gun is fired. Several different flash suppressors have been designed over the years for the M-16, one of the most widely used military rifles in the world.
Leitner-Wise obtained a patent on its novelty shot glass based on an M-16 flash suppressor in 2012. As described in its patent documents, the "glass" is actually crafted from anodized aluminum.
Beam claims Leitner-Wise began marketing the shot glass under the name "BattleShot," but met with only limited success. Five months later, the complaint says, the parties signed their distribution agreement.
"The Agreement gave Bean the 'exclusive right' to 'purchase, inventory, promote and resell the [rechristened] MuzzleShot product within the United States, its territories, and the countries of Canada and Mexico," the complaint says.
In order to distinguish their product from the failed "BattleShot" brand, the parties agreed to jointly register the "MuzzleShot trademark. Six months later the parties signed a revised worldwide distribution agreement, Beam said.
But the distributor says it was never entirely happy with its business partner. "LWM was habitually late in supplying the finished MuzzleShot glasses to Beam, and on many occasions failed to deliver sufficient quantities of MuzzleShot that it promised to deliver to Beam to fill orders Beam had," the complaint says.
Then, in the spring of 2014, Beam says, it discovered that Leitner-Wise had distributed some of the glasses on its own, and had developed a plan to continue to do so in violation of the standing distribution agreement.
After receiving 480 MuzzleShot glasses from the engraver on May 20, 2014, Leitner-Wise rejected the distributor's payment, demanded return of the items and announced it no longer would maintain a relationship with Beam.
The next day, the complaint alleges, representative Paul Andrew Leitner-Wise posted on his personal Facebook page, "480 MuzzleShots were stolen from our engravers by the former distributors. Anyone receiving one after today is handling stolen property. The Commonwealth's Attorney's [sic] are pursuing the matter and that is that."
In addition to the defamatory statements on social networks including Facebook, Twitter and LinkedIn, Beam says defendant Vanessa Troug assisted Leitner-Wise in creating the counterfeit website originalmuzzleshot.com, which stole copyrighted material directly from Beam's website.
The alleged defamation and threats continued throughout the course of several months, plaintiffs allege, including a complaint with the Better Business Bureau and a public grievance on the website "Ripoff Report" which urged consumers to "not do service with this company if you wish to not get ripped off."
Vuog and Leitner-Wise eventually accepted payment for the shot glasses, court documents say, and after Beam filed an interpleader suit against them, "legally abandoned" the claims and agreed that Beam was contractually allowed to sell the MuzzleShot glasses in question.
"The defendants' concerted actions were for the purpose of terminating and/or interfering with the contractual relationship in the Agreement between Beam and LWM, so the defendants could sell the MuzzleShot product and reap a greater profit than under the Agreement, resulting in substantial monetary damages to Beam," the plaintiffs maintain.
Beam is seeking compensatory and punitive damages and injunctive relief on claims of defamation, breach of contract, civil conspiracy, statutory conspiracy, and tortious interference with a business relationship.
The distributor is represented by S. Keith barker of Glen Allen, Va.
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