Partnership disputes involving intellectual property can develop between separate companies or legal entities.  Questions of who owns a trademark, patent, copyright or other intellectual property can also develop when a business is breaking apart or coming to an end.  How are these partnership disputes resolved?  A recent case out of Chicago illustrates the complex business relationships that exist in today’s competitive business environment.

The Chicago case involves two separate companies who partnered to work on a $1 million contract with the Chicago Transit Authority or CTA.  Central issues in the case involve former business associates who used to work together, and an employee leaving “Company A” to go to work for the other partner (Company “B”) in the CTA contract, and allegedly transferring trade secrets from their company email account to a personal (private) email address.

The two companies who partnered on the CTA contract made agreements by email, as they had worked together on several projects since for almost 15 years. Company “A” is cut out of the CTA deal, which is based upon a business niche and proprietary strategy developed by and “claimed” by Company “A”.

Company “A” files a lawsuit against Company “B” and the former employee alleging conspiracy, breach of contract and tortious interference, tortious interference with prospective economic advantage, violation of the Consumer Fraud and Deceptive Trade Practices Act, breach of fiduciary duties, unjust enrichment and conversion.

Managing partnership disputes involving intellectual property are quite legally complex, and this case involves many twists.  However, after more than four decades of service to the San Diego business community, I can tell you that these types of disputes are unfortunately not uncommon.

At the Watkins Firm, we work with our clients to protect them from developments such as the example above.  The minimum investment required to create business contracts between the two companies, and to secure proprietary information and intellectual property pales in comparison to the actual losses alleged in the lawsuit, and the time and expense of pursuing justice in Court.

Pro-Tip: “Well, because we start with a thorough, well documented chronology of events, a mastery of the damages, and all of our philosophies on how to prepare a case, we’re ready to go to trial. And we’ve tried lots of cases.

Knowing the facts, the damages, the law of the damages is key, because that gives you the ability to predict what would happen if you went to trial tomorrow and you won, what would you win?  That’s it, that’s the number.  In civil court, we’re only looking at the dollar amounts, and understanding human nature. Preparation for my clients has to a lot to do with damages, the law and damages and the facts. We cannot just go in there and say, ‘here’s the right number. Here’s what I’ll settle for. I’m done talking.’ That doesn’t work. It should. We believe we’re all intelligent people. And if we all are intelligent people, we should be able to look at the facts. If we agree on the facts, apply law and come up with the exact same number, like it’s an accounting problem. but it doesn’t work that way. People are not wired that way.

If it’s a trial, we really enjoy jury trials. If it’s an arbitration, we’ve been around so long, we’re comfortable with the arbitrators. They don’t always rule in our favor. Just because you’ve had arbitrations in front of a judge or an arbitrator doesn’t mean you’re going to get a good ruling.  If they know you, they’re going to put you to a higher level and a higher standard.

And then jury trials, we’ve tried so many jury trials that we really feel comfortable picking a jury going through the jury selection process. Our whole team knows how to get all the exhibits ready, comply with all the court, local rules, having everything professional and laid out, having your expert witnesses, ready to go. You put on a show, we enjoy doing it. We don’t think we should have to do it that much. We’d rather settle. But when we go to trial, we like getting that big jury verdict. It’s just wonderful.” – Dan Watkins, Founding Partner

Partnership disputes can often be prevented through the development of sound corporate documents, employment agreements and business contracts. We invite you to review our podcast Episode 10 – The Importance of a Strong Corporate Attorney as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.  We work to resolve partnership disputes involving intellectual property, and will review existing corporate agreements and contracts and strategies to prevent partnership disputes before they arise in the future.