Thursday, April 26, 2012

Intellectual Property

The Illinois Administrator has filed a complaint that alleges, among other things, the following:

1. Prior to May 15, 2010, Respondent was a partner in the Ladas & Parry LLP ("Ladas") law firm. Ladas is an international intellectual property law firm with a Chicago office. Respondent began working at Ladas in 2002 and became a partner in 2008.

2. On at least five occasions from January 10, 2010 through May 14, 2010, Respondent downloaded at least 75,000 electronic files from Ladas’ computer network onto his own external memory devices. Those documents included Ladas’ client files, a client directory, the firm’s foreign associate directory, and other electronic files, such as forms and templates.

3. On April 19, 2010, Respondent incorporated William Park & Associates, Ltd. ("Park & Associates"), an Illinois law firm through which Respondent intended to engage in the practice of patent law. Between April 19, 2010 and May 15, 2010, while still a Ladas partner, Respondent undertook efforts to set up his own firm, including leasing office space and creating firm letterhead.

4. On May 14, 2010, three Ladas partners confronted Respondent about his intention to open his own firm in competition with Ladas, and requested that he immediately leave the Ladas firm’s office. Thereafter, the Ladas firm began the process of terminating Respondent’s employment. On May 25, 2010, Respondent, through counsel, sent Ladas a letter stating that he had resigned effective May 14, 2010.

5. On May 17, 2010, counsel for Ladas sent Respondent a litigation hold letter notifying Respondent that Ladas planned to file a lawsuit against him. Respondent received Ladas’ letter, sent via email and overnight delivery, shortly thereafter. The litigation hold letter stated that Respondent should not destroy, modify or discard any electronic or hard copy records or evidence relating to, among other things, his alleged misappropriation of trade secrets and his alleged solicitation of Ladas’ clients.

6. On May 21, 2010, Respondent began deleting from his external memory devices the files he had downloaded from Ladas’ computer network, as described in paragraph two, above. By deleting files on May 21, 2010, Respondent acted contrary to the provisions of the litigation hold letter described in paragraph five, above.

7. On May 24, 2010, Ladas filed a complaint against Respondent in the Circuit Court of Cook County, which the court received and docketed as Ladas & Parry, LLP v. W. William Park et al., 2010 CH 22152 (Circuit Court of Cook County). In that complaint, Ladas alleged that Respondent had breached his fiduciary duties to the firm and had misappropriated trade secrets by downloading Ladas’ documents and soliciting Ladas’ clients prior to leaving the firm. Ladas requested that the court enter a temporary restraining order ("TRO") against Respondent.

8. On May 25, 2010, Respondent’s counsel accepted service of Ladas’ Summons and Verified Complaint in case number 2010 CH 22152. Respondent learned of the summons and complaint shortly thereafter.

9. Also on May 25, 2010, Respondent continued to delete from his external memory devices additional files he had downloaded from Ladas’ computer network. By deleting files on May 25, 2010, Respondent acted contrary to the provisions of the litigation hold letter described in paragraph five, above.

10. On May 26, 2010, counsel for Ladas served a Motion for Expedited Discovery on Respondent’s counsel and attached proposed interrogatories and requests for production of documents. Respondent learned of that motion shortly thereafter.

11. Also on May 26, 2010, Respondent continued to delete from his external memory devices additional files he had downloaded from Ladas’ computer network. By deleting files on May 26, 2010, Respondent acted contrary to the provisions of the litigation hold letter described in paragraph five, above.

12. On May 27, 2010, the Hon. Daniel A. Riley entered an order granting Ladas’ motion for a TRO. Among other things, the TRO barred Respondent from accessing, copying, summarizing, forwarding, downloading, or using the electronic files that he had downloaded from Ladas; ordered Respondent to surrender all external memory devices to which he had downloaded Ladas files; and prohibited Respondent from soliciting Ladas clients. Respondent learned of that order shortly thereafter.

13. Also on May 27, 2010, Respondent continued to delete from his external memory devices additional files he had downloaded from Ladas’ computer network.

14. Between May 21, 2010 and May 27, 2010, Respondent deleted from his external memory devices a total of 90 files that he had previously downloaded from Ladas’ computer network.

15. Respondent deleted the 90 files from the external memory devices because he believed these files were damaging to his defense in case number 2010 CH 22152.

16. Respondent caused 88 of the 90 deleted files to be overwritten and irretrievable.

17. On May 28, 2010, pursuant to the May 27, 2010 TRO, Respondent surrendered seven memory devices to Reveal Data Corporation, a third party neutral approved by the court in case number 2010 CH 22152 to receive the devices.

18. Between May 28, 2010 and November 15, 2010, Jerry Saperstein ("Saperstein"), a computer forensic specialist, conducted a forensic examination of the external memory devices surrendered by Respondent.

19. During his examination of the external memory devices, Saperstein discovered Respondent’s deletion of the 90 files referred to in paragraph 14, above.

20. On November 15, 2010, Ladas filed a motion for sanctions in case number 2010 CH 22152 alleging that Respondent had deliberately destroyed evidence relevant to the litigation prior to surrendering his memory devices pursuant to the court’s TRO.

21. On July 15, 2011, the Hon. Mary J. Mikva entered an order sanctioning Respondent based on her finding that Respondent had deliberately destroyed documents contained on the memory devices prior to surrendering those devices pursuant to the TRO. The court issued a jury instruction adverse to Respondent, ordered Respondent to pay Ladas $58,819.74 for fees and costs, and entered a permanent injunction prohibiting Respondent from accessing, copying, summarizing, forwarding, downloading, or in any way using any files that he had downloaded from Ladas.

22. As of April 4, 2012, (the date Panel D of the Commission Inquiry Board voted that a complaint be filed in this matter), case number 2010 CH 22152 remained pending.

(Mike Frisch)

 

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