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Brazilian Licensee's Claim Against LoJack Dismissed

May 16, 2014

LoJack Corporation announced that an arbitration panel has dismissed all claims filed against the company by Tracker do Brasil LTDA (Tracker), the exclusive licensee of the LoJack Stolen Vehicle Recovery technology in Brazil.

In its binding decision, arbitrators from the International Centre for Dispute Resolution of the American Arbitration Association also upheld several of LoJack's counterclaims against Tracker for violating the terms of its license agreement, breaching the implied duty of good faith and fair dealing, and engaging in unfair competition. The panel now will conduct a further hearing to determine the amount of an award of damages owed to LoJack.

The arbitration case stemmed from a contractual dispute between the parties that began in March 2011. In its 81-page decision, the arbitration panel dismissed all eight of Tracker's claims, including those for intentional misrepresentation, negligent misrepresentation and breach of contract. Tracker had sought $55 million in actual damages, which could have been tripled by the arbitration panel, plus legal fees.

LoJack's counterclaims for breach of contract and breach of implied duty of good faith and fair dealing were upheld in part. The panel ruled that Tracker has been making unauthorized use of LoJack's trademarks, copyrights, technology and other confidential information to advertise, lease, sell or market non-LoJack products, representing them to the public as LoJack products.

The panel found that the unauthorized use of LoJack's intellectual property and confidential information caused LoJack to suffer damages to its reputation, in addition to other damages.

The panel also upheld LoJack's counterclaim that Tracker engaged in unfair competition, ruling that in addition to its use of LoJack's trademarks/trade names and copyrights to sell non-LoJack products, Tracker passed off non-LoJack products as LoJack products. The arbitrators found that this conduct did deceive or likely could deceive customers into believing that they were buying a LoJack product when they were not.

Because Tracker failed to meet its minimum unit purchase requirements for vehicle location units under the license agreement, the panel further concluded that LoJack has the right, based on such failure, to terminate the License Agreement upon the giving of 60 days written notice to Tracker.

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