Opinion ID: 2690702
Heading Depth: 3
Heading Rank: 1

Heading: ACS’s Evidence

Text: {¶ 44} ACS claimed that Leadscope misappropriated PathFinder. The jury was instructed that to constitute misappropriation, the information at issue must be a trade secret. The jury was also instructed that a trade secret is information that “is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” Although ACS never expressly argued to the jury what trade secret Leadscope allegedly took, the PathFinder source code was the only “secret” property. Indeed, the majority of the evidence adduced by ACS was focused on PathFinder’s source code. {¶ 45} CAS’s President Massie had testified at deposition that “the source code is    an extraordinarily important and central tangible item in the sense that it’s reduced to some medium.” He had also testified that he was most interested in the source code because “[t]hat is, after all, what this entire problem is about: Who created this product?” Michael Petras, a senior engineer at ACS and one of the code writers of PathFinder, testified that there was “no doubt” that the source code for PathFinder was confidential. {¶ 46} The source code was so important to ACS that it was part of its negotiations with Leadscope before this litigation. Michael Dennis, CAS’s legaldepartment manager, testified: A. We talked about the PathFinder source code and the entire PathFinder project, and we had conversations about how we believed, Pete [Roche] and I, that Leadscope had the enjoyment of the PathFinder software or source code and that as part of the settlement or resolution of this, that Leadscope should provide CAS with any enhancements that they had made to that software. Q. And when you pointed out that you thought they had the benefit of the PathFinder source code, what did these people say? 19 SUPREME COURT OF OHIO
Q. Did they ever deny having the PathFinder source code? A. No. Which left us with the impression that they had copied some form of the PathFinder software. {¶ 47} But the jury heard testimony from ACS’s own expert that the source codes for PathFinder and the Leadscope patent were not the same. Dr. Sudhakar Yalamanchili testified that “he did not find any” verbatim copying of any source code from PathFinder that was used in Leadscope. Dr. Martin Rinard, Leadscope’s expert, confirmed Dr. Yalamanchili’s conclusion that the source codes were not identical. He “looked at every line of source code and both source code bases” and concluded that Leadscope’s source code was not copied from the PathFinder source code. {¶ 48} The source code was the only part of PathFinder that was considered highly confidential. The functionality of PathFinder was not proprietary information. Petras conceded that other than the source code, documents were not subject to security procedures for the purpose of protecting confidentiality. In fact, Petras testified that the functionality of PathFinder was not secret and was described to the public in articles and in scientific presentations. The functionality of the PathFinder project was disclosed to customers through sales presentations, without the protection of nondisclosure agreements. And Lou O’Korn, head of ACS’s research department, testified that there were other products in the field that had the capabilities of the Leadscope patent and PathFinder. The functionality of PathFinder was unequivocally not a secret. {¶ 49} ACS did not provide sufficient evidence to the jury supporting its claim for misappropriation or that it had a patent on PathFinder. ACS’s only secret was the source code, and expert testimony revealed that the source codes 20 January Term, 2012 for PathFinder and Leadscope were not the same. The lack of sufficient evidence of misappropriation is astonishing, especially considering the length of this trial and the extensive nature of the discovery spanning nearly six years. {¶ 50} But the lack of evidence is even more problematic for ACS’s defense of Leadscope’s counterclaim alleging that ACS filed the lawsuit solely to injure Leadscope’s competitiveness. ACS never specified any information to support its basis for filing the lawsuit. President Massie testified that he formed a working group to investigate the patent. However, the jury never heard testimony about the results of the committee or how it reached its determination that Leadscope had misappropriated the PathFinder product. {¶ 51} Instead, there were extensive discussions out of the presence of the jury between counsel and the judge regarding Leadscope’s motion in limine seeking to introduce evidence of the conclusions of the working group. ACS successfully sought its exclusion on the basis that the information was protected by work-product and attorney-client privilege. Thus, the jury never heard testimony on the information ACS had when it filed its lawsuit to support its claims for misappropriation against Leadscope. This is relevant because in defending the counterclaim involving unfair competition predicated upon legal action, ACS was required to show that when the lawsuit was filed, it had an objective basis and was not filed simply to injure Leadscope’s ability to be competitive. {¶ 52} The evidence that ACS did present to the jury failed to establish that it possessed anything more than speculation at the time it filed its lawsuit that PathFinder had been misappropriated by Leadscope. ACS’s own experts and internal technical staff would not state that Leadscope had stolen ACS’s trade secrets. Although the experts and internal technical staff identified similarities in the patented information, no testimony established that Leadscope took ACS’s proprietary information. Instead, ACS focused its arguments on the similarities 21 SUPREME COURT OF OHIO between the source code and “operational flows.” ACS relied on those similarities as proof that Leadscope misappropriated PathFinder. {¶ 53} Dr. Yalamanchili’s testimony could not provide any insight as to what information ACS relied upon in filing its claims against Leadscope, given that he was not retained by ACS until 2007, five years after the lawsuit was filed. Dr. Yalamanchili testified that the “operational flow” of the two programs was “identical.” But Dr. Yalamanchili never clearly defined “operational flow” or why identical “operational flows” supported ACS’s claim of misappropriation. The jury never heard testimony from Dr. Yalamanchili or any other ACS expert that the operational flow constituted proprietary information. Dr. Yalamanchili even admitted he did not review any other software projects beyond PathFinder and Leadscope’s patent to determine whether other programs had the same operational flow. {¶ 54} But Dr. Yalamanchili also testified that the Leadscope patent and PathFinder were different in several ways. He testified that there was no evidence that the PathFinder source codes were the same as Leadscope’s. Additionally, the two programs were written in different programming languages. Dr. Yalamanchili also testified that the algorithms of PathFinder and Leadscope were not identical. Thus, ACS’s own expert failed to make a convincing case that Leadscope misappropriated ACS’s intellectual property. {¶ 55} Further damaging to its case, ACS’s own information technology employees, such as Robert Swann, could not equivocally state that Leadscope had misappropriated PathFinder: Q. And you were asked your opinion regarding whether Drs. Blower and Myatt and Mr. Johnson developed Leadscope on their own or whether it was Chemical Abstracts’ technology? A. On several occasions. 22 January Term, 2012 Q. And in, in fact—well, what was your response to such questions? A. Honestly don’t know. I could not tell you if they did or did not. {¶ 56} President Massie also testified that ACS did not bring a lawsuit before Leadscope filed a patent application because it could not tell what, if any, information had been misappropriated: Q. And if I understand correctly, your testimony earlier, it was, you were not—that [Robert Swann] advised you we couldn’t tell without seeing code or independent development, essentially; is that fair to say? A. I don’t know what you mean by “independent development.” But I would agree with you that I said to him not only my concerns, but there were a lot of concerns within CAS, a lot of management was talking about this product and worrying about whether anything was taken from us. So I did ask Mr. Swann, what do you think, what do you people in technology think. He said, we can’t tell from the outside whether this has our information in it.