Sued!! (For No Good Reason)
How I won and you can too!
The call came in about 10:00 am, two weeks before Christmas in 1996. A new customer, who added some of our products to their mail order catalogue was on the line.
“Steve, you better sit down” she said. “A Federal Marshall will be there in a few minutes with a truck to take your inventory of dog figurines”
As it turned out, they had used our figurines on a rustic lamp, bur their copywriter used information from a much larger competitor selling a similar product.
The owner was not happy. So she sued the direct mail company and us. To make matters worse, her company was based in California and the suit would be handled in the courts there.
When the marshall walked in my office and told me who he was, I surprised him by saying “I heard you were coming”. He was not real impressed with my being tipped off.
Thats how four months of hell and sleeplessness started. The $100,000 lawsuit could put us out of business with legal and travel costs added on top.
We called our attorney, a very experienced and well known lawyer locally. The suit was for copywrite infringement–not his area of expertise. But he knew a firm in Minneapolis, about an hour from our business.
The attorney recommended by the firm was good. And ruthless. He knew copywrite law. He also knew my company was innocent. The designs were ours. The mail order company was not so lucky. They made the mistake and ended up paying for it.
However, our story turned out much better. There were two separate products and the judge threw out the first one right away. The second one was a little trickier.
But after a couple of court appearances, he threw out the suit against us. Now it was our turn. We counter sued and ended up settling for $14,000. Not a lot, but better than the alternative.
But even better than that, our local attorney went after our commercial insurance company, who did not want to pay our legal fees. Eventually they coughed up almost $50,000 covering most of the expenses.
I learned two valuable lessons.
1.Hire the best. (whether its an attorney, accountant, or any other professional)
2.Keep a cool head.
Smart advice for many business situations.