My only luck was that they chose to be astute businessmen.

Yes, they didn't have to honor the warranty, but the facts indicate it was indeed a defective battery (and not a misused one):

I ordered two batteries, and the MS light and charger has had no adverse affect on the second battery. And those of us with MS chargers have measured its output as coinciding with the same voltage as the Gemini charger, which is designed for the same cell technology/model.

So, yes, they have a right to refuse, but we'd all still take away from it that the battery was defective and they chose not to honor the fact.

If you ran a start-up company, what would you have done?