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Forget
a thousand words, this picture was worth $116 million
You
know what they say about assumptions. And if that's
enough to discourage you from making them, consider
this: an assumption about a photograph proved very costly
for a North Carolina company last year, amounting to
what could be Virginia's largest civil verdict ever.
The company, Walter Kidde Portable Equipment of Mebane,
N.C., began marketing a portable escape ladder. Its
display showed a mother and her young son frantically
climbing down a ladder to escape from a burning house.
The
problem? The ladder was actually designed by a Chesapeake
company, X-IT products. Co-founders Aldo DiBelardino
and Andrew Ive first developed the ladder in a 1996
Harvard Business School product development class. By
1998, they had filed a patent and had entered into a
confidentiality agreement with Kidde to possibly purchase
the product. Although nothing came of those talks, DiBelardino
later discovered Kidde marketing a ladder remarkably
similar to X-IT's at a trade show in Chicago. The litigation
soon began, with Bob Tata of the Norfolk firm of Hunton
& Williams, representing X-IT.
Adding
fuel to the fire: Kidde used the same photo on its package
as X-IT's, assuming it was generic stock art. "We
went to their president and said, 'You can't use that,
that's our photo,'" DiBelardino says. "He
said, 'Oh, that's probably just some stock photo.'"
Not so. Remember that mother and son on the package?
They're actually DiBelardino's sister-in-law and nephew.
The U.S. District Court for the Eastern District of
Virginia in Norfolk sided with DiBelardino and Ive,
awarding the inventors $21 million in compensatory damages
and a $95 million punitive sum in August. Judge Robert
G. Doumar ordered Kidde - a subsidiary of Kidde P.L.C.,
a billion-dollar English company - to remove the boxes
from every store in the nation by March 30.
But
Kidde has used its own escape devices to keep X-IT from
seeing a penny so far. Doumar found the offending company
in contempt of court in March for not removing thousands
of the ladder boxes from the nation's shelves, and ordered
the company to pay X-IT's legal fees.
"We
got our day in court which (Kidde) never thought would
happen, and we got our jury verdict which they never
thought would happen," says DiBelardino. "We've
won a lot of little battles, and you hope in the long
run, you win the war."
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Mike Ashley
Return to Virginia Business - June
2002
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