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12 November 2020AmericasMuireann Bolger

Allied BioScience sues ex-CEO for holding IP hostage

Allied BioScience (ABS) has accused its former CEO of holding the company's IP, including inventions relating to its COVID-19 antiviral disinfectant, to ransom so he can demand an unfair amount of compensation.

The company’s SurfaceWise 2 surface disinfectant was the first to be approved by the US Environmental Protection Agency in August to continuously protect against COVID-19 with a single application.

In the complaint, filed at the US District Court for the Western District of Washington on Monday, November 8, the company also held that Craig Grossman, who previously served as the founder, president, CEO and director of ABS from 2005 to 2018, misappropriated trade secrets.

According to ABS, Grossman has refused to sign an agreement declaring the company owns the inventions he created during his employment unless he is compensated for more than he deserves.

However, ABS has argued that Grossman “is obligated to assign...inventions to ABS” according to the terms of his employment and consulting agreements, and that he had “already received significant compensation”.

ABS claimed that its former CEO “redlined the confirmatory assignment agreement to include a baseless requirement that ABS pay Grossman significant, unearned additional compensation in exchange for Grossman’s execution of the document”.

It added that Grossman demanded that ABS compensate him commensurate with “other recently-resigned directors” and that ABS permit him to “sell up to 10% of... holdings” in ABS.

Grossman's demand for “unearned compensation” and attempts to somehow hold these inventions hostage is “unconscionable,” the company added.

The suit holds that Grossman “continues to hold himself out as an agent of ABS” despite ceasing any association with the company in 2018, and that he uses his "email signature block in a deceptive and misleading way” suggesting that he is still affiliated with the company.

It also accused him of “secretly and improperly” obtaining critical ABS trade secrets from an ABS insider, including information related to ABS’s patent and innovation strategies. “This technical information is highly confidential and relates to non-public ABS inventions and technologies,” the company said.

ABS claims that Grossman’s misappropriation of ABS’s trade secrets is even more concerning given that he founded his own consulting company, Gman BioTech Consulting, in 2018 while he was still a consultant at ABS. “In addition to apparently improperly competing with ABS in violation of his consulting agreement, Grossman may also benefit greatly from misappropriating ABS’s confidential information and trade secrets,” the company said.

ABS sent a cease and desist letter to Grossman in September, after which it claimed that its former CEO’s attorney confirmed in an email that ABS owns the technology that Grossman invented during his tenure at the company.

The company stated: “Grossman's repeated refusals to sign the confirmatory assignment agreement and demands for additional compensation and consideration regarding the Grossman inventions has created an ownership dispute...”

Furthermore, ABS has accused Grossman of learning about the compensation granted to other ABS directors through “improper means”, and that he “surreptitiously acquir[ed] confidential severance compensation terms”.

ABS has requested a declaratory judgment that it is the sole owner of all of the Grossman inventions and a court order preventing Grossman from claiming ownership over the inventions.

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More on this story

Americas
31 March 2020   Numerous associations and individuals have come together to ask the World Health Organization to build a global pool for IP rights related to the COVID-19 pandemic.
Big Pharma
24 March 2020   Counterfeit face masks and unauthorised antiviral medication have been seized under Interpol’s annual Operation Pangea, as criminals seek to take advantage of the COVID-19 pandemic by exploiting demand.

More on this story

Americas
31 March 2020   Numerous associations and individuals have come together to ask the World Health Organization to build a global pool for IP rights related to the COVID-19 pandemic.
Big Pharma
24 March 2020   Counterfeit face masks and unauthorised antiviral medication have been seized under Interpol’s annual Operation Pangea, as criminals seek to take advantage of the COVID-19 pandemic by exploiting demand.