The American Chemical Society vs. Leadscope, Inc. et al

Posted: July 30, 2010

ACS has filed today a memorandum of law seeking further review of the above-referenced case by the Ohio Supreme Court. Several prominent Ohio organizations, including the Ohio Chamber of Commerce (which has more than 100 nonprofit members) and the Ohio State Bar Association, are supporting ACS’s request for review by the Ohio Supreme Court.

Because questions about this case − and its potential impact on ACS employees, members, and customers − have been raised, ACS provides the following information concerning this case and the filing made by ACS today.

The case was authorized by the ACS Board of Directors and filed with the Franklin County Court of Common Pleas in May 2002. ACS concluded, after careful review and consistent with the recommendation of attorneys from two law firms, that it had legal claims against Leadscope and its founders, who were former employees of ACS’s Chemical Abstracts Service division. ACS sought in the case to protect its intellectual property. ACS supported its claims with significant evidence – including the testimony of two respected experts – at a trial that commenced in February 2008 in the Franklin County Court of Common Pleas. Defendants moved for judgment on ACS's claims at trial, claiming that ACS's evidence was insufficient. The trial judge denied that motion and ruled that ACS had presented sufficient evidence in support of its claims for the claims to be presented to the jury. Following an eight week trial, the jury ultimately ruled against ACS on its claims. ACS accepts the decision of the jury and is not seeking further review of the jury's decision ruling against ACS on the claims it had brought.

In response to ACS’s 2002 complaint, defendants brought counterclaims against ACS based upon Ohio state law and claimed that ACS had brought its claims in bad faith, had engaged in "malicious litigation," and had defamed the defendants. These counterclaims were tried together with the claims ACS had brought. Besides ruling against ACS on the claims it had brought, the jury awarded over $26 million on the counterclaims defendants had brought against ACS. Together with attorneys' fees awarded by the court and interest, the judgment against ACS now totals approximately $40 million.

In November 2008, ACS filed an appeal in the Ohio Tenth District Court of Appeals. That court rendered its decision on June 15, 2010, and affirmed the 2008 judgment.

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. 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 right of a party to petition the courts and to bring claims supported by substantial evidence is a central feature of our American system of justice, even if those claims ultimately are not successful. ACS also believes that the statements it made about its claims were not defamatory and that defendants failed to prove any damages resulting from the statements alleged to be defamatory. These are important legal issues that ACS today has asked the Ohio Supreme Court to consider.

ACS believes that the uniqueness and importance of the legal issues in this case warrant a request for further review by the Ohio Supreme Court.

Whether or not the Ohio Supreme Court grants ACS’s application for further review, the judgment in this case against ACS will not impact ACS staffing or employees, ACS member dues, ACS programs, or the mission and vision of the ACS.

The American Chemical Society is a nonprofit organization chartered by the U.S. Congress. With more than 161,000 members, ACS is the world's largest scientific society and a global leader in providing access to chemistry-related research through its multiple databases, peer-reviewed journals and scientific conferences. Its main offices are in Washington, D.C., and Columbus, Ohio.

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