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Policy

ACS Again Appeals Leadscope Case

Intellectual Property: Society and amicus partners will seek a decision from the Ohio Supreme Court

by William G. Schulz
August 9, 2010 | APPEARED IN VOLUME 88, ISSUE 32

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Credit: Supreme Court of Ohio
Chambers of the Ohio Supreme Court
8832notw8_chambers.jpg
Credit: Supreme Court of Ohio
Chambers of the Ohio Supreme Court

The American Chemical Society has filed an appeal with the Supreme Court of Ohio over the intellectual property dispute it has now lost twice—first in a 2008 jury trial and then in an appeals court decision handed down in June—against Leadscope, Inc., a Columbus, Ohio-based chemical informatics company (C&EN, June 17, Latest News ). Amicus briefs have been filed by the Ohio State Bar Association, the Ohio Chamber of Commerce, the Ohio Manufacturers' Association, and the Ohio Council of Retail Merchants.

The legal battle stretches back to 2002, when ACS brought suit against Leadscope and three former ACS employees who founded the company: Paul E. Blower Jr., Wayne P. Johnson, and Glenn J. Myatt. All three had worked in ACS's Chemical Abstracts Service Division.

In the original suit, ACS alleged that the defendants improperly used ACS's intellectual property to develop, patent, and market Leadscope software products. The jury found against ACS on these claims.

At the same time, the Leadscope defendants filed a counterclaim against ACS, charging malicious litigation in filing its suit, defamation, tortious interference with business relations, unfair competition, and deceptive trade practices. The lower court found in favor of Leadscope on all but the last of the counterclaims. An Ohio appeals court affirmed the jury's decision on all of these matters.

In its appeal to the high court, ACS is not seeking a reversal of the jury's decision on its original claim. Rather, it would like the court to consider constitutional questions the society says are raised by the jury's decision on the counterclaims by Leadscope.

It is uncertain whether the Ohio Supreme Court will now take the case or when it will make that decision. If the high court does not accept the case, ACS will immediately be on the hook to Leadscope and its three founders for some $40 million in compensatory and punitive damages, as well as attorneys' fees and court costs. The judgment is one of the largest for defamation ever handed down in the Ohio courts.

"Although ACS does not seek to prolong this litigation or its costs needlessly, ACS believes that further review by the Ohio Supreme Court of the substantial judgment that has been entered against ACS is warranted," the society said in a statement. "To the knowledge of ACS, there has never before been a case where an Ohio court has awarded damages based upon a theory of 'malicious litigation.'"

The Ohio state constitutional issues ACS and its amicus partners would like the high court to address on appeal, therefore, are: the standard under which a party may be found liable for bringing a lawsuit and whether ACS was properly found liable for defamation on the basis of two statements it made related to the litigation.

Attorneys for Leadscope at the Squire Sanders Law firm could not be reached for comment at C&EN's deadline.

           

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