Sunday, August 3, 2008

Insignia Systems Dismisses Lawsuit Against Albertson’s; Trial Against News America Rescheduled

Albertson’s Dismissed -

In Insignia Systems’ ongoing against Albertson’s and News America Marketing (discussed in previous posts here, here, and here), Insignia has agreed to dismiss its claims against Albertsons, a grocery chain owned by SuperValu, Inc. The stipulation for dismissal (download as .pdf) was signed July 31, 2008.

While the reason for the dismissal is not clear from the stipulation, the dismissal was with prejudice (meaning it cannot be re-filed), and without costs or attorneys’ fees, which might indicate that Insignia did not believe that it had sufficient evidence against Albertsons to proceed.

New Trial Date for Insignia v. News – On July 15, 2008, the court issued a new Pretrial Scheduling Order (.pdf), pushing back the trial date to March 20, 2009. The court also set the deadline for expert discovery on October 31, 2008, and for dispositive motions on December 2, 2008.

Update on Proceedings from Insignia CEO – In Insignia’s July 23 earnings release, CEO Scott Drill commented: “On the legal front, it has been extremely busy the past few months. Document production is essentially complete and numerous depositions have been taken. We remain optimistic about our case, which is scheduled to be trial ready by March 20, 2009.”

Business Update and Earnings – In its July 23 release, Insignia reported that it had signed a number of agreements with grocery stores, granting them access to over 1,000 new stores. Insignia also stated that its relationship with Valassis “continues to go well.”

For the Second quarter of 2008, Insignia reported that sales increased by 8.7% and POPS revenue was up 11.1% compared to the year ago quarter. Scott Drill added that “The third quarter will be our all time record POPS revenue quarter.” Legal expenses for the second quarter, however, amounted to $849,000, resulting in net income of $410,000.

Commentary - One blog reader commented to me in an e-mail, “It is a shame that they are spending something like 70% of their net earnings on legal costs in the suit against News America, but it looks like they have done the right thing since they were almost dead a couple of years ago.”

While the legal expenses are costly in the short-term, there is the possibility of a substantial payoff for Insignia in the long run. Moreover, the existence of Insignia’s lawsuit, even if it is ultimately unsuccessful, has forced News America to think twice before engaging in some of the aggressive tactics that it has allegedly employed against Insignia, Valassis, FLOORgraphics, and others.


The Law Firm of Kotchen & Low LLP - Civil Litigation, Counseling, and Representation Before Government Agencies

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