Everything was going well for TerraCycle, the small eco-friendly start-up that makes plant food and fertilizer out of worm waste and packages it in recycled pop bottles. Until it got slapped with a lawsuit by competitor Scotts Co. in March, that is. "We were shocked and worried," says TerraCycle's spokesman, Albe Zakes. "When the largest company in your industry sues you, you've made a very powerful enemy." Scotts had complained that TerraCycle's green and yellow packaging looked too similar to their own Miracle-Gro brand, and that TerraCycle was making false claims about the superiority of their products over synthetic brands -- claims that Zakes says were based on research conducted at Rutgers University for the New Jersey-based company. When TerraCycle refused to hand over the research findings to their rival, Scotts took the matter to the courts.

Positioning itself as the underdog in a classic David and Goliath battle, TerraCycle fought back with a website, suedbyscotts.com, which compared the two companies' numbers of employees, sales and CEO benefits ("unlimited use of corporate jet versus free unlimited worm poop"). But after racking up legal costs of $30,000 a month, TerraCycle, which is headed by Tom Szaky, was happy to reach a settlement with Scotts. They've agreed to change their packaging, something they were planning to do before the litigation, Zakes claims. And though the settlement stipulates that they can't make any comparative claims based on the Rutgers research, they can make claims based on future, independent studies. "I think the Sued by Scotts website was a huge success," says Zakes, who adds that the company's sales spiked during the lawsuit. "I don't think we ever wanted to get sued, but the publicity we got out of it was simply priceless."