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Representative Work
Appliance Recycling Centers of America, Inc., et al. v. JACO Environmental, Inc., et al.
No. 04-1371 AHS (VBKx) (C.D. Cal. filed November 24, 2004)

Attorneys

O. Yale Lewis, Jr.

Related Practices

Litigation and Alternative Dispute Resolution

Intellectual Property

Contracts, Unfair Competition and Other Business Disputes

Advertising, Marketing,
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Recycling, Hazardous Waste Management and Carbon Offsets

Business Transactions and Organizations

JACO Environmental, Inc., of Everett, Washington, is dedicated to recycling household appliances in an environmentally-safe manner.  Working in partnership with major utility companies, JACO collects used freezers and refrigerators from consumers’ residences; separates and recycles 95% of the materials, including the metal, glass and plastic parts; and removes and disposes of PCBs and other hazardous chemicals in a safe and environmentally responsible manner, all of which is coupled with a commercially successful process for high-temperature incineration of polyurethane foam insulation contaminated with ozone-depleting chlorofluorocarbons (CFC-11).

In November 2004, a competitor filed a complaint in the U.S. District Court for the Central District of California for declaratory judgment of invalidity and unenforceability of JACO’s patent on its incineration process, and alleging violations of state and federal false advertising law; state unfair competition law; intentional interference with prospective economic relations; and negligent interference with prospective economic relations.

At the outset, JACO successfully moved to dismiss both of the interference with prospective economic relations claims as well as the state unfair competition claim, and successfully negotiated a dismissal with prejudice of the claim for unenforceability and invalidity of the patent.  See Appliance Recycling Centers of America, Inc., et al. v. JACO Environmental, Inc., et al., No. 04-1371 AHS (VBKx) (C.D. Cal., June 24, 2005); Appliance Recycling Centers of America, Inc., et al. v. JACO Environmental, Inc., et al., No. 04-1371 AHS (VBKx) (C.D. Cal., October 7, 2005).

The false advertising claims involved an unsettled and developing area of the law in the Ninth Circuit regarding the interface between patent law and state and federal false advertising laws.  Specifically, because patent law protects a patent holder’s right to publicize its patent, JACO successfully argued that a patent holder could not be held liable for allegedly false statements in the marketplace about its patent unless the party challenging the statements proved that the statements were made in bad faith.

After four years of litigation, the Court entered judgment in favor of JACO on January 6, 2009, summarily dismissing the competitor’s two remaining claims.  See Appliance Recycling Centers of America, Inc., et al. v. JACO Environmental, Inc., et al., No. 04-1371 AHS (VBKx) (C.D. Cal., January 6, 2009). The competitor appealed the Court’s decision in favor of JACO to the Ninth Circuit but that Court affirmed the decision on May 4, 2010.  See Appliance Recycling Centers of America, Inc., et al. v. JACO Environmental Inc., et al., No. 09-55168 (9th Cir. May 4, 2010).

Hendricks & Lewis also represents JACO with respect to corporate and other general business matters.


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