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June 17, 2010

ACS Loses Appeal of Leadscope Case

Intellectual Property: Ohio court of appeals affirms Leadscope's counterclaims against society

William G. Schulz

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The American Chemical Society has lost round two of its intellectual property dispute with Leadscope Inc., a Columbus, Ohio, based chemical informatics company. An Ohio appeals court, in a strongly worded decision released on June 15, upheld all counts against ACS that were determined by a jury in a 2008 lower court ruling (C&EN Online Latest News, March 28, 2008).

"We're very pleased for our clients, as this decision ends years of battling claims that cost our clients time and resources they would have spent investigating innovative ways to improve the drug development process," said Alan L. Briggs, lead attorney on the case for Leadscope and who is with the Squire Sanders law firm.

The appeals court decision could deal ACS a severe financial blow. The society may now have to pay Leadscope and three of its employees some $40 million in compensatory and punitive damages as well as attorney fees and court costs.

"ACS has not yet had an opportunity to carefully assess the details of the decision of the Court of Appeals," the society said in a statement. "Once it has done so, ACS will determine whether it is appropriate for ACS to seek further review of this matter by the Ohio Supreme Court."

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 Leadscope defendants filed a counterclaim against ACS, charging 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.

Chemical & Engineering News
ISSN 0009-2347
Copyright © 2011 American Chemical Society
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