Biocomposites GmbH v. Artoss, Inc., 2023-1189-NAC

In 2015, Biocomposites GmbH (formerly ARTOSS GmbH) and Artoss, Inc. entered into a Distributor Agreement for Artoss to distribute GmbH’s products in North America, giving GmbH the unilateral right to modify Artoss’s distribution territory with 90 days’ notice.
The agreement was later amended (Amendment 1) to add a new product (Putty 2.0) to Artoss’s distribution rights, but the amendment referenced that its terms were governed by the original Distributor Agreement.
In September 2023, GmbH exercised its contractual right to reduce the distribution territory from all of North America to only California, Arizona, and Nevada.
Both parties sought preliminary injunctions to prevent the other from selling GmbH’s products amidst the dispute.
The court previously denied both sides’ motions for preliminary injunction. Artoss then filed a motion for partial reargument, arguing the court misunderstood its position and the relevant law.
The court denied Artoss’s motion for reargument, finding no misapplication of law nor misunderstanding of material facts, and that Artoss’s arguments either rehashed old points or raised new ones inappropriately.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Right to modify territory	GmbH’s unilateral modification right in the Distributor Agreement applies, including for new products in Amendment 1.	Artoss argues Amendment 1 implicitly revoked GmbH’s right, especially for Putty 2.0, and such discretion must be exercised reasonably and in good faith.	Amendment 1 did not revoke nor alter GmbH’s modification right; plain text supports GmbH.
Breach of contract	No breach—rights retained by GmbH per Distributor Agreement and amendments.	Artoss interprets Amendment 1 to grant independent distribution rights and revoke modification right.	Artoss’s contract interpretation is inconsistent with agreements’ text and evidence; no probable success for Artoss.
Implied covenant of good faith and fair dealing	Discretion exercised for business reasons (low performance); no bad faith.	GmbH’s reduction of territory was arbitrary/bad faith and violated implied covenant.	Record doesn’t support arbitrary/bad faith action; Artoss unlikely to succeed on this claim.
Introduction of new arguments post-ruling	Original arguments supported by contract and record.	Artoss raised new theory of independent rights under Amendment 1 in reargument.	New arguments not proper at reargument; motion denied.

No officially reported cases with reporter citations were referenced in the opinion—only cases with Westlaw citations and internal Chancery citations were listed. No bluebook-eligible cases to reference.