Jury awards $39,000 to Airius, Avedon
Last Updated: 11:22 August 21, 2013
The verdict rendered in Denver U.S. District Court concerned several allegations against Zoo Fans, including fraud, misappropriation of trade secrets and design patent infringement. The jury ruled in favor of Avedon and Airius on just two claims, that Zoo Fans competed unfairly against them and benefitted from unjust enrichment.
The unfair competition claim means that Zoo Fans "copied Avedon's and Airius' products or services or misappropriated Avedon's and Airius' operations in some regard" and that "this conduct is likely to deceive or confuse the public because of the difficulties in distinguishing" between the competing companies' products.
The unjust enrichment means that the jury believed Zoo Fans was able to use knowledge and experience developed by Avedon and Airius to develop and market its own products without providing compensation to Avedon and Airius.
The damages of $39,075 were awarded on the unjust enrichment claim, while nominal damages of $1 were awarded on the unfair competition claim.
"It wasn't really the damages number that was important," said Mike Davis, attorney for Avedon and Airius. "It was that Avedon and Airius prevailed on the case theory."
Zoo Fans founder Jeff Benton saw the result differently, noting that he and his company were exonerated of most of the charges and were ordered to pay far less than what Airius and Avedon had been seeking.
"These guys were seeking over $11 million and they got $39,000," Benton said. "It's not exactly what I would term a three-year victory. I think it was a waste of resources and time. I'm glad that it's over, and now we can get back to competing in the marketplace. We consider this a victory."
Avedon and Airius are owned by Ray Avedon. Avedon is a contract manufacturer now in its 50th year. Airius is about 10 years old and is the maker of the Air Pear Thermal Equalizer System, an energy-saving circulation system used to equalize temperatures in any heated or cooled facility.
At issue in the case was the assertion that Avedon believed Benton stole proprietary information on his Air Pear fans to start his own company.
Avedon said Benton had been trying to purchase Airius beginning in 2006 and later, after negotiations to purchase the company failed, was working with Avedon to try and land third-party investors in the company. Through that process, Avedon said Benton gained confidential and sensitive business information that he used to start Zoo Fans rather than create a business plan for Airius to pitch to investors.
Zoo Fans was created in 2010, and Avedon has been battling the company ever since.
"That's what Avedon and Airius have argued for three years, and they feel vindicated by this jury verdict," Davis said.
Avedon and Airius put out a press release on the verdict Tuesday.
"It has been our contention that Zoo Fans founder Jeff Benton likely deceived or confused the public by copying our products or services or misappropriating our operations when he was considering a potential investment with us," Ray Avedon, who declined to disclose his companies' revenue, said in the release. "The jury's verdict proves that we were right."
Benton said Zoo Fans customers like Walmart, Kroger and Ford have stuck with the company's products through the litigation process.
"All the local businesses have looked at our products and determined they prefer ours," Benton said. "That's what free enterprise is about, not trying to squash competition in the courts. ... Our customers haven't walked away from us."
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