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Connecticut businessmen Edward Pagano and Albert Prinz dreamed up the name for their Edal Industries in 1958 by simply combining the first syllables of their names. They didn’t spend much time reflecting how unique and valuable the name “Edal” might be — let alone “edal.com.” But in the ensuing decades, the two built an electrical equipment manufacturing business with a national reputation for high voltage rectifiers and problem-solving customer service. Grounded in the old economy, the firm is now at the center of a new economy battle, becoming the first litigant in Connecticut to use the federal 1999 Anticybersquatting Consumer Protection Act, as Pagano, Prinz and their lawyers work to stave off an alleged theft of the company’s name. In 1978, Prinz left to head up a spinoff East Haven, Conn., business, Current, Inc., which produced cast resin products. Pagano stayed until 1991, handing over the reins to junior management. But by the mid-1990s the East Haven factory was in financial decline. Creditors — who included the founders — opted for bankruptcy in October 1997. In 1999, in the process of taking stock of the company’s valuable assets, Chapter Eleven Trustee Roberta Napolitano hired a new general manager from Corporate Renewal Services, and the company was readied for inspection by potential purchasers. A New Jersey competitor, HV Components Associates, Inc., seemed interested. HVCA officers Dennis and Craig Dean signed confidentiality agreements with Edal in August 1999. They were permitted to tour the North Haven manufacturing facility and inspect its books and operating records. Napolitano and Edal did not know that on April 28, 1998 Dennis Dean had registered the domain name edal.com with Herndon, Va.-based Network Solutions, Inc., one of two companies authorized to license and catalog Internet domain names for the United States. Part of the “due diligence” procedure allowed the HVCA officers access to customer lists, supplier information, test results, specifications and other sensitive information. After the information-gathering process, EDAL says it never received an offer from HVCA. It now questions whether HVCA was acting in good faith, or attempting to leech data and customers from EDAL through unfair techniques. EDAL’s bankruptcy lawyers decided to strike back. New Haven, Conn., lawyer Timothy D. Miltenberger, the third in a series of trustees for EDAL’s reorganization, retained former assistant U.S. Attorney Deirdre A. Martini, of Ivey, Barnum & O’Mara in Greenwich, Conn. On May 5, she filed a seven-count federal complaint that invokes the Anticybersquatting Consumer Protection Act — apparently the first use of the act in a Connecticut complaint. It asserts that HVCA has “in bad faith willfully intended to profit from the ‘EDAL’ mark by registering and operating the edal.com domain name, which is identical to the distinctive and famous ‘EDAL’ mark.” The complaint, filed in U.S. District Court in Waterbury, Conn., before Judge Gerald L. Goettel, alleges traditional intellectual property violations — trademark infringement, “blurring” and dilution. It also charges the defendants with breach of contract, unjust enrichment and violation of the Connecticut Unfair Trade Practices Act. GETTING THE EDGE Internet accessibility may be more important than having a nationwide force of sales reps, Miltenberger says. “But Internet commerce only works if they end up at your site,” he notes. That’s where Martini’s anticybersquatting suit fits into the strategy. It’s based on an act passed in November 1999, largely in response to speculators buying up long lists of famous trademarks as domain names, with an eye to sell them at a steep markup. Edal, struggling with its bankruptcy problems, has yet to become a significant Internet presence. Its Edalindustries.com is occupied by a single screen ad from a domain name marketer. It has a black-and-white Web site at an unmemorable Internet address: www.mjlweb.com/edalind/. Edal.com, the name nabbed by HVCA, appears as a simple “under construction” placeholder. In Edal’s complaint, the company asserts that HVCA has used “metatags” or hidden signals to direct searches for Edal to bring viewers to the HVCA site. Under the Anticybersquatting Act, plaintiffs are not entitled to money damages unless the infringer registered the domain name after November 1999. But plaintiffs can win the equitable remedy of having the name transferred to its rightful owner. James Sicilian, of Hartford, Conn.’s Berry & Howard, is representing HV Components. He says his client has never engaged in any bad faith acts, or otherwise violated the Anticybersquatting law. Sicilian won the case of Sportsmens’ Inc. v. Sporty’s Tool Crib, at the 2nd U.S. Circuit Court of Appeals earlier this year. That case applied the Anticybersquatting law, which was passed during its appeal, to return the name “Sportys.com” to Sicilian’s mail order catalog client. ENERGIZED ENTREPRENEURS Pagano and Prinz are well past retirement age. Instead, they’re once again working together — and the company has taken on a new vitality. Over the past two years, Miltenberger says he’s seen the East Haven factory in three distinctly different conditions. Although the company never stopped making and shipping products, it was clearly in sluggish condition two years ago. “It looked dusty — it didn’t look like there was a lot of action,” he says. Later, after Pagano alone was working as general manger, the factory “looked like it was running out of money.” Lately, however, with both Prinz and Pagano working together under the reorganization, Miltenberger noticed a distinct change. The two founders are the company’s top creditors, and own the bulk of Edal stock between them. The company owes about $400,000 to lawyers, accountants and bankruptcy trustees. Now the company seems energized, he says. “The first thing I noticed was I couldn’t get a spot in their parking lot. That had never happened before,” he says. Inside, all of the equipment was manned, and the factory was “buzzing.”

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