Red Chalk Group - John Koepke - Raymond Zenkich - James Sheridan - Red Handed Group - Chicago - Patents

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IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS COUNTY DEPARTMENT, CHANCERY DIVISION

ipIQ, INC.,

Plaintiff,

v.

JOHN KOEPKE, JAMES SHERIDAN, JR. and RAYMOND ZENKICH,

Defendants.

Case No.: 06 CH 16737

Judge Philip Bronstein

ORDER

This matter coming before the Court on Plaintiff ipIQ, Inc.’s (“Plaintiff” or “ipIQ”) Emergency Motion For the Entry of a Temporary Restraining Order, all parties represented by counsel, the Court being fully advised and having reviewed the verified complaint and accompanying exhibits and the supporting memorandum of law,

THE COURT HEREBY FINDS THAT:

1. Plaintiff has demonstrated a reasonable likelihood of success in establishing that Defendants John Koepke, James Sheridan, Jr. and Raymond Zenkich (hereinafter referred to collectively as “Defendants”) (a) breached their fiduciary duties to ipIQ; (b) breached their employment agreements with ipIQ; and/or (c) misappropriated ipIQ’s trade secrets.

2. Plaintiff has demonstrated that it would suffer irreparable injury if the injunction is not entered; and

3. Plaintiff has demonstrated that if the injunction is not entered, the harm to the Plaintiff would exceed the harm to the Defendants from granting the injunction.

BASED ON THE FINDINGS ABOVE, THE COURT HEREBY ENTERS A TEMPORARY RESTRAINING ORDER AGAINST DEFENDANTS AS FOLLOWS:

A. Temporarily enjoining Defendants from providing any services or knowledge in the area of intellectual property directly or indirectly to any entity or person as specifically identified in a mutually agreed upon list to be held by counsel for both parties, until further Order of Court;

B. Temporarily enjoining Defendants from performing any services, including data, software tools, consulting and investment management services or developing any software tool or data offering which incorporate, use, disclose or benefit from the information contained within the ipIQ Corporate Tree Unification Procedure


ipIQ, INC.,

Plaintiff, v.

JOHN KOEPKE, JAMES SHERIDAN, JR. and RAYMOND ZENKICH, individually and collectively d/b/a THE RED CHALK GROUP,

Defendants.

Case No. 06-CH-16737

Judge Philip Bronstein

ipIQ, INC.'S AMENDED VERIFIED COMPLAINT FOR INJUNCTIVE RELIEF AND PERSONAL JUDGMENT

Plaintiff, IpIQ, Inc., for its Verified Complaint against the Defendants, John Koepke,

James Sheridan, Jf. and Raymond Zenkich, individually and collectively d/b/a The Red Chalk

Group (collectively referred to herein as "Defendants"), alleges as follows:

PARTIES

1. PlaintifflpIQ, Inc. ("ipIQ") is a Nevada corporation with its principal place of

business at 1 North LaSalle Street, 5th Floor, Chicago, Illinois 60602.

2. Defendant John Koepke ("Koepke") is an individual residing at 519 Wisner

Street, Park Ridge, Illinois 60068. Defendant Koepke was Vice President, later Executive Vice

President, Consulting Services, of ipIQ until his employment was terminated on August 2, 2006.

3. Defendant James Sheridan, Jr., ("Sheridan") is an individual residing at 23 North

Green Street, Apt. #502, Chicago, Illinois 60607. Defendant Sheridan was Managing Director,

later Vice President, Consulting Services, at ipIQ until his employment was terminated on

August 2, 2006.

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4. Defendant Raymond Zenkich ("Zenkich") is an individual residing at 1215 Croft

Lane, Evanston, Illinois 60202. Defendant Zenkich was Managing Director, later Vice

President, Consulting Services, of ipIQ until he resigned from his employment on July 28, 2006.

FACTS

A. ipIQ's Intellectual Property Business.

5. ipIQ provides intellectual property services to numerous clients, including

Fortune 500 companies, investment banking and investment research firms, academic institutions

and government agencies. For customers seeking intellectual property services, ipIQ offers,

inter alia:

(a) competitive industry analyses at the industry, corporate, specific business unit, or even key inventor level;

(b) detailed technology assessments, including licensing and commercialization support;

(c) IP data, statistics, metrics and indicators that support corporate decisionmaking;

(d) Electronic toolsets that support corporate decision-making;

(e) Analysis, tools and metrics that connect corporate financial performance to a company's patent portfolio;

(f) Investment opportunity analysis for public equity investment, financial models and private equity strategies supported by various patent portfolio analyses;

(g) R&D area assessments that include trends in a given field, analyses of technological impact, identification of those companies making the most advances in the field, and those holding key patents in given areas;

(h) Portfolio/patent/application valuation;

(i) Merger and Acquisition/divesture due diligence support;

(j) Licensing and commercialization support;

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32. ipIQ takes numerous steps to protect the confidentiality of its information.

33. These steps include, but are not limited to execution of employment agreements,

use of licenses to limit distribution and use of the information, identifying customers by

customer number or project pseudoname and not by name, limiting access to the information via

password protection on the company computer systems, limiting access to specific data on a job

by job basis, tracking who logs on to the computer systems, archiving email histories of

employees, labeling appropriate information as confidential and tracking which jobs are run on

the computer systems.

34. All employees are required to return all ipIQ data and third party data upon their

departure from ipIQ.

B. ipIQ's Employment Agreement with Defendants.

35. Defendant Koepke was hired on April 25, 2005 as Vice President, Consulting

Services to assist in expanding ipIQ's consulting division. Prior to his hire, Koepke worked at

Maxiam, an intellectual asset management consulting company, for two years but had no

previous experience in the intellectual property field, or intellectual property consulting.

36. ipIQ also hired Defendant Sheridan on March 28, 2005 and Defendant Zenkich on

September 12, 2005, each as Managing Director, Consulting Services. Both gentlemen had no

previous experience in the intellectual property field, or intellectual property consulting.

37. Defendants all executed Employment Agreements upon their hire. True and

accurate copies of the three Employment Agreements are attached to this Complaint as Exhibits

"A" (Koepke), "B" (Sheridan) and "c" (Zenkich).

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were taught the particular details of the ipIQ business by existing ipIQ employees and officers.

Prior to their employment, Defendants had no knowledge of how to use and manipulate patent

data to provide value to customers through consulting or otherwise, nor did they know how to

build a "clean" database or how to manipUlate that data to create patent indicators and patent

statistics.

C. Defendants Form Competing Intellectual Property Business.

47. In late July 2006, ipIQ discovered that Defendants had formed a competing

business and had been planning these efforts as early as April, while all were still employed with

ipIQ.

48. After learning the ipIQ business and recognizing the strength of the ipIQ business

model and ipIQ's future business plans, Defendants chose to take all that they learned while

employed by ipIQ and replicate it in the formation of a competing business.

49. Defendants' competing business is not a traditional consulting business, which

was Defendants' experience prior to ipIQ but an exact copy ofipIQ's business.

50. Defendants' competing business, which is named either "Patents 360", "Venture

IP ," "IP Decision Group," or "The Red Chalk Group" offers competing intellectual property

consulting services, investment services, data and online tools identical to those offered by and

currently under development by ipIQ. Defendants have also begun to develop an investment

fund to compete with ipIQ's own investment fund offering.

51. Defendants, through their competing business, replicate every aspect of the ipIQ

business.

52. In a detailed letter prepared by Defendant Sheridan and retrieved from Defendant

Sheridan's ipIQ laptop, Defendants outlined their plans for their competing venture. The letter is

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dated July 18, 2006 and a true and accurate copy is attached hereto as Exhibit "D, "but will be

filed under seal.

53. The "unique" opportunity Defendants describe in the letter - providing premium

patent related information and services in the areas of consulting, data services and investing - IS

ipIQ's business. In doing so, they intend to "continue to serve corporate clients with their

intellectual property related needs." They also plan on continuing to serve investment

community clients and plan on ultimately partnering with a financial partner to raise an

investment fund. Finally, they plan to sell their "data, metadata (calculated statistics), and

proprietary data (e.g., unified view of a patent portfolio considering mergers and acquisitions)"

with their ultimate goal to be considered the "Morningstar of Patent Data." They consider this

the "real wealth creation opportunity." Indeed, the aspiration to become the "Morningstar of

Patent Data" is ipIQ's future strategy, was discussed and analyzed on a regular basis by all ipIQ

executives and was simply stolen by Defendants.

54. The letter goes on to cite future partners, many of whom are ipIQ partners,

including but not limited to Pipal Research, Wall Street Journal and Financial Times.

55. The letter concludes by acknowledging that the field ofIP related professional

service providers is large and fragmented. Defendants identify various companies that are

competitors in some of the segments identified by Defendants but concludes by noting that none

offer the strategic plan to offer the wide range of intellectual property services that Defendants

propose. Remarkably, they fail to disclose in this letter that one company does offer the services

outlined - their employer at the time, ipIQ.

56. All ofthe above ideas and future plans were spawned directly from their

employment with ipIQ, including ipIQ's high level strategic planning. A true and accurate copy

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of ipIQ's March 20, 2006 confidential presentation to a potential investor is attached hereto as

Exhibit "E," but will be filed under seal. The sum and substance of the presentation is identical

to Defendants' outline of its future business, including the identification of a highly confidential

future relationship with an ipIQ partner.

57. Not surprisingly, every step of the way Defendants attempted to hide their

activities from ipIQ.

58. To form this competing business, Defendants utilized ipIQ's trade secrets and

confidential information including but not limited to: (1) the manner which ipIQ cleans and

unifies patent data to create a valuable patent database; (2) the use of analytical tools and patent

indicators to manipulate the data; (3) ipIQ's future business plans; (4) ipIQ's customer

relationships; and (5) the use ofipIQ's proprietary databases to provide investment analysis and

to operate an investment fund.

59. It is not possible to offer the services offered by Defendants without knowledge

and use ofipIQ's trade secrets and confidential information gained by Defendants while

employed by ipIQ.

60. Defendants have misappropriated ipIQ's propriety business plans and processes,

to form their competing venture.

61. Without their knowledge ofipIQ's business and business plans, Defendants

would be in no position to start up a competing venture. Their attempts to replicate ipIQ's

business would be impossible without this knowledge. Based upon their employment with ipIQ,

they knew what to obtain in order to develop their business and where to get it.

62. Defendants sought to replicate the business ofipIQ by attempting to (1) purchase

and/or create a patent database, (2) purchase and/or create patent indicators and (3) build a patent

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analytics and financial analytics toolset with the help of at least two third party companies, Pipal

Research of Chicago, Illinois and SolutionWerx of Albuquerque, New Mexico.

63. Defendants sought to develop a brand position in the marketplace with the help of

at least two third party companies, Flow Creative of Chicago, Illinois and Source/Inc. of

Chicago, Illinois. Simultaneous with sending Flow Creative their business plan, Defendants

required Flow Creative to execute a nondisclosure agreement to protect their plans, which in

reality were those oftheir employer, ipIQ.

64. They engaged in these efforts during the course of their employment with ipIQ

and with full knowledge of their obligations contained within their Employment Agreements.

65. Defendants simultaneously started their competing business while still employed

by ipIQ.

D. Defendants Surreptitiously Started Their Competing Business While Still Employed By ipIQ.

66. In or around April 2006, Defendants created a web office using the software

application provided by the company WebEx and named it "ClosetPerfect" which allowed them

to share information among themselves and to discuss the logistics of their competing enterprise

without ipIQ's knowledge. Contained within that ClosetPerfect web platform was a Master Task

Framework which set forth all of the tasks necessary to form the competing business. ipIQ does

not have a copy of the Master Task Framework, but is aware of its existence.

67. To assist them in forming this competing business, Defendants engaged third

parties, including Pipal Research and Solution Werx, to contact data providers and other

intellectual property companies on their behalf while disguising the true source of the inquiries.

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68. Defendants also engaged some of the same third parties, including Pipal Research

and SolutionWerx, to replicate ipIQ's proprietary data processing operations and toolset.

69. As an initial step, Defendants hired SolutionWerx, Inc. to contact various vendors

on their behalf to investigate purchasing United States patent data.

70. On April 19, 2006, SolutionWerx contacted Thomson Scientific on behalf of

Defendants. Solution Werx successfully obtained a quote on behalf of Defendants from

Thomson. During this same time frame, Solution Werx also attempted to contact Delphion on

behalf of Defendants.

71. In their attempts to obtain a patent database to compete against ipIQ, Defendants

went so far as to attempt to probe ipIQ employees for information, specifically with regard to

how ipIQ cleans the data through its unification techniques. In an April 27, 2006 e-mail,

Defendant Koepke suggested that Defendants "probe Subi [ipIQ's Managing Director of Data

Architecture] re: clean-up." A true and accurate copy of that e-mail is attached hereto as Exhibit

"F."

72. Defendant Zenkich also suggested to Defendant Koepke that he reach out to

Francis N arin [an ipIQ consultant and former president and owner of ipIQ' s predecessor

company, CHI Research] to "see ifmaybe there is any responsibility on Delphion's side to

supply data to everyone." Defendants never disclosed to Francis Narin the reasons for these

inquiries. A true and accurate copy of the e-mail is attached hereto as Exhibit "G."

73. Defendant Koepke also confirmed in an e-mail that he would "ask Fran and/or

Subi (assuming I can find an appropriate way to ask) I suppose I can also ask Subi the amount of

effort in cleaning up the FTP data ... " A true and accurate copy of that e-mail is attached hereto

as Exhibit "H."

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74. On or about May 1,2006, Defendant Koepke drafted an e-mail to be sent by Pipal

Research directed to 1790 Analytics. In that e-mail, Pipal Research was to have requested on

behalf of Defendants a price quote for 1790 Analytics corporate thesaurus data as provided to

Delphion, including the hierarchy feature and original assignee feature. In asking Pipal to send

this e-mail, Defendant Zenkich advised Pipal that "we are starting development of the innovation

service offering, we are identifying sources for data which we then will enhance." A true and

accurate copy of that e-mail is attached hereto as Exhibit "I."

75. In June 2006, Defendants, while still employed by ipIQ and under the guise of

working on behalf ofthe company, also contacted at least one ipIQ New Jersey employee and

inquired about unification techniques. That employee spent time with Defendant Sheridan

explaining the process and directed another employee to send ipIQ's unification instructions to

him.

76. As the above paragraph discusses, from their employment, Defendants knew that

patent data which was not cleaned had no value and, therefore, Defendants proceeded to contact

outside sources to cleanse the patent data.

77. On June 19,2006, approximately one week after Defendants probed ipIQ New

Jersey employees for detailed unification techniques under the guise of working for the

company, Defendants prepared a presentation for Pipal Research in which they advised Pipal that

their new company was "developing an intellectual property data business (named Patents 360),

IP consulting business and investment business." In the presentation, Defendants went on to

describe exactly ipIQ's business plan. In that presentation, Defendants agreed to provide the

"initial tools and processes" to Pipal Research. These are tools and processes which they were

wholly unfamiliar with before working for ipIQ approximately one year before this presentation.

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In that presentation, Defendants talked about how to take a patent database and conduct name

normalization, patent reassignment and company unification. This is the exact proprietary

process that ipIQ engages in to create its robust database and is a process that was unknown to

these Defendants prior to their employment with ipIQ. A true and accurate copy of the Pipal

presentation is attached hereto as Exhibit "J," but will be filed under seal.

78. In circulating the presentation among themselves, Defendant Koepke urged

Defendants to be "extremely discreet/careful as usual ... " A true and accurate copy ofthe June

18, 2006 email is attached hereto as Exhibit "K."

79. The most egregious part of the presentation, especially in light of Defendants'

previously discussed July letter attached hereto as Exhibit "D," was what was included on the

third to the last page of the Pipal presentation. That page is entitled Patents 360 Aspiration for IP

Module and below that is the following language: "insert copy of a page from the Morningstar

book on Jude's desk (if you can discretely get it)." Jude Reter is a Chicago-based ipIQ

employee.

80. Therefore, in addition to forming their competing venture without the knowledge

of ipIQ, Defendants also planned to take ipIQ data to assist them in forming this business.

81. Upon information and belief, Defendants ultimately chose Solution Werx and

Pipal Research as their partners in their scheme and proceeded to provide Solution Werx and

Pipal Research the confidential information Defendants gathered at ipIQ, so that SolutionWerx

and Pipal Research would know how to cleanse the patent data and create the database.

82. On or around July 23,2006, SolutionWerx created a project management portal

site on behalf of the Defendants in order to better organize their patent data efforts. This portal

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site provided everything required to manage their competing data and tool creation efforts

including calendars, discussion items, project tasks, and resources.

83. Simultaneous with the development of the patent database, Defendants reached

out to the investment community. On April 19, 2006, Defendant Sheridan reached out to a

colleague to assist him in approaches to package IP data for the investment community. A true

and accurate copy of the e-mail is attached hereto as Exhibit "L."

84. Approximately ten days later, on April 30, 2006, Defendant Sheridan contacted

another colleague, Chris Bell, to discuss the mechanics of setting up an investment fund. A true

and accurate copy of the Sheridan e-mail to Chris Bell is attached hereto as Exhibit "M."

85. A few months later while still employed by ipIQ, Defendants reached out to Steve

Salutric at Results One Financial to discuss their future business. In an email to Mr. Salutric,

Defendant Zenkich blatantly claims ownership and control of ipIQ's investment fund. Without

making any mention of ipIQ, Defendant Zenkich attaches a chart of "our IP fund performance,"

describes the six year performance of the fund and states "I'm pretty impressed with the

performance and am curious what you think. We're eager to get up in running as soon as

possible to begin selling through retail, wholesale, and institutional channels." A true and

accurate copy of the June 20, 2006 email is attached hereto as Exhibit "N," but will be filed

under seal.

86. Throughout this time, Defendants were also actively involved in replicating the

subscription piece ofthe ipIQ business strategy. Defendants' efforts were focused upon usurping

an ipIQ corporate opportunity presented to ipIQ by Pipal in December 2005.

87. Only six months before Defendants' presentation to Pipal, in December 2005,

Pipal made a presentation to ipIQ in which it proposed partnering with ipIQ to create an ipIQ-

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branded platform to create tear sheets for Fortune 100 companies. In this proposal, Pipal

recognized that ipIQ was a "thought leader in IP Research and analysis has very proficient

processes and know-how in unlocking the value of intellectual property." A true and accurate

copy of the Pipal proposal is attached hereto as Exhibit "0," but will be filed under seal.

88. As early as April 29, 2006, Defendant Zenkich wrote to the other Defendants:

"Guys - July 1 is also the date that Pipal wants to go live with their product. We may need some

type of internal beta to prepare a set of data/analysis. I'll also post my mock-up ofthe tear sheet

today." These tear sheets were the type of offering proposed by Pipal to ipIQ in December

2005. A true and accurate copy of the e-mail is attached hereto as Exhibit "P."

89. As part of this proposal and/or related to other projects between ipIQ and Pipal,

ipIQ and Pipal signed a non-disclosure agreement to protect the exchange of confidential

information.

90. In addition to possibly aiding Pipal to breach its non-disclosure agreement with

ipIQ, Defendants sought to usurp a corporate opportunity of ipIQ and to create and assisted in

creating a competitor, Pipal, to challenge their current employer at the time, ipIQ.

91. ipIQ has reason to believe that Defendants have provided detailed trade secrets

and confidential information with regard to ipIQ's business to Pipal Research, SolutionWerx and

others.

92. Throughout this four-month period beginning in April 2006, Defendants

continued to be paid as employees and officers of ipIQ and continued to receive and have

unfettered access to ipIQ's confidential and proprietary databases, know-how and information.

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.'

93. The revenues and productivity ofipIQ's consulting division dropped dramatically

during this four-month period. This drop can now be explained - Defendants were preoccupied

planning their new business and lining up prospects for that future business.

E. Defendants are Soliciting ipIQ's Clients.

94. ipIQ has had approximately sixty-eight clients over the past three years. Of the

approximately thirty current ipIQ clients, five have been continuous clients for the last three

years, eight have been continuous clients for the last five years and one has been a continuous

client since 1968. As a result ofthe longevity ofipIQ's client relationships and through the

services that it provides to its clients, ipIQ has developed an extensive knowledge of the needs of

its clients.

95. ipIQ also has over one thousand active prospects.

96. Absent a lapse in the quality of the services, ipIQ clients remain clients for an

indefinite period of time.

97. ipIQ has developed those clients over a long period of time and at great time and

expense. They have been developed through significant investments in business development

including travel expenses, industry event sponsorship expenses, sales and client support staff

expenses; significant investments in marketing including visual design and collateral

development expenses, printing and publishing expenses, company web site development;

significant efforts to establish a thought leadership position in the marketplace by way of

developing and writing papers, and distributing them through coordinated public relations

campaigns; significant investments in "loss-leader" client projects designed to establish an initial

relationship on which future projects could be based; significant investments in project and

engagement management to ensure a high quality final product; significant investments in

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prospect and lead generation sources and tools, including over a year of effort developing ipIQ's

Salesforce.com site.

98. Upon information and belief, Defendants, while still employed by ipIQ, have

solicited ipIQ's clients.

99. Defendants have taken these actions to compete directly against ipIQ in both

intellectual property and investment consulting.

100. Prior to their efforts to form this competing enterprise, Defendants regularly kept

upper management apprised of their consulting activities and client development activities. Over

the past four months, Defendants attempted to meet with and contact ipIQ clients and prospects

without the knowledge of upper management. During this period, Defendants have contacted

and solicited ipIQ clients, including Motorola, Inc., Alcatel and Hewlett-Packard in an apparent

attempt to market Defendants' competing business.

101. Defendants are in a position to solicit ipIQ's clients and prospects due to their

breaches of fiduciary duty, breaches of their Employment Agreements and misappropriation of

trade secrets.

102. Defendants have replicated ipIQ's business and now are trying to take ipIQ's

customers that have been developed at a substantial commitment of time and expense.

F. Defendants' Breaches Continued Despite Being Placed On Notice By ipIQ.

103. As soon as ipIQ became aware of Defendants' breaches of loyalty and of their

Employment Agreements, letters dated August 2, 2006 were sent to each of the Defendants to

terminate them from their continued employment with ipIQ and to have them cease and desist

from any further violations of their duties and agreements.

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104. Upon information and belief, despite notice, Defendants have contacted and

solicited ipIQ partners, prospects and prospective investment partners, including Citadel

Investment Group in an attempt to market Defendants' investment services. On or around

August 10, 2006, Defendants met with Citadel Investment Group and presented a document that

describes their business as having a "unique set of patent-level data" and "extensive experience

addressing IF related issues for Fortune 500 corporations and the investment community."

Defendants did not even bother to change the template label on this document and it still reads

"ipIQ template 02," further indicating their direct misappropriation of ipIQ proprietary material.

The properties of this document indicate it was authored by Elias Zenkich, father of Defendant

Raymond Zenkich, and a key investor in Pipal Research. A true and accurate copy of this

document is attached hereto as Exhibit "Q," but will be filed under seal.

105. Despite these letters, Defendants continued to unlawfully compete against ipIQ

and failed to offer any response to the letters as well as an additional proposal offered by ipIQ's

counsel in an e-mail dated August 5, 2006. ipIQ did not receive any written response until

receiving a letter dated August 11,2006 in which Defendants rejected all of the proposals in

ipIQ's previous letters.

106. Instead, Defendants, as late as August 9, 2006, were engaging in efforts to copy

their ipIQ e-mail accounts from their laptops for their future personal use. A true and accurate

copy of an e-mail among Defendants is attached hereto as Exhibit "R."

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H. Awarding ipIQ its costs and attorneys' fees; and

I. Granting ipIQ such other and further relief as is just and equitable.

COUNT II

BREACH OF EMPLOYMENT AGREEMENT AGAINST DEFENDANTS

115. Plaintiffrealleges each of the paragraphs above and incorporates same by

reference.

116. All of the Defendants executed Employee Agreements.

117. Defendants' conduct is in breach of their Employment Agreements.

118. These breaches have allowed Defendants and/or entities owned, in whole or in

part, by Defendants to unlawfully compete against ipIQ.

119. These breaches have caused, are causing and will cause ipIQ to lose the

competitive advantages afforded by its trade secrets and confidential information.

120. By breaching their agreements with ipIQ, Defendants have caused, are causing,

and will continue to cause damage to ipIQ.

121. By breaching their agreements with ipIQ, Defendants have caused, are causing,

and will continue to cause ipIQ irreparable harm.

WHEREFORE, Plaintiff demands judgment be entered in its favor and requesting that

this Court award it damages and equitable relief against Defendants as follows:

A. Awarding compensatory damages, including but not limited to, all wages and benefits received by Defendants while they were unlawfully competing against ipIQ and all damages suffered by ipIQ arising out of The Carlyle Group's refusal to invest in ipIQ;

B. Awarding interest, costs and attorneys' fees;

C. Preliminarily and permanently enjoining Defendants from providing any services or knowledge in the area of intellectual property directly or indirectly to any ipIQ

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COUNT III

BREACH OF DUTY OF LOYALTY AGAINST THE INDIVIDUAL DEFENDANTS AS EMPLOYEES OF ipIQ


reference.

123. By taking the above-described actions, the Defendants breached their fiduciary

duty of loyalty and their fiduciary duty as employees of ipIQ not to (1) form a competing

business while still employed, (2) reveal ipIQ data and/or trade secrets to third parties to allow

them to compete against ipIQ, (3) reveal, disclose or otherwise utilize ipIQ data, confidential

information and/or other trade secrets ofipIQ, and (4) usurp corporate opportunities ofipIQ for

their own personal benefit.

124. Defendants' breaches were knowing, intentional, wanton, reckless, willful and

oppressIve.

125. By breaching their fiduciary duties to ipIQ, Defendants have caused, are causing

and will cause ipIQ to lose the competitive advantages afforded by its trade secrets and

confidential information.

126. By breaching their fiduciary duties to ipIQ, Defendants have caused, are causing,

and will continue to cause damage to ipIQ.

127. . By breaching their fiduciary duties to ipIQ, Defendants have caused, are causing,

and will continue to cause ipIQ irreparable harm.

WHEREFORE, Plaintiff demands judgment be entered in its favor and against

Defendants requesting that this Court award it damages and equitable relief as follows:

A. Awarding compensatory damages, including but not limited to, all wages and benefits received by Defendants while they were unlawfully competing against

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L. Granting ipIQ such other and further relief as is just and equitable.

COUNT IV

BREACH OF IMPLIED COVENANT OF GOOD FAITH

AND FAIR DEALING AGAINST DEFENDANTS


reference.

129. Defendants owe ipIQ a duty of good faith and fair dealing pursuant to the

Employment Agreements.

130. For the reasons set forth above, Defendants have breached the implied covenant

of good faith and fair dealing.

131. By breaching the implied covenant of good faith and fair dealing, Defendants

have caused, are causing and will cause ipIQ to lose the competitive advantages afforded by its

trade secrets and confidential information.


have caused, are causing, and will continue to cause damage to ipIQ.


have caused, are causing, and will continue to cause ipIQ irreparable harm.

WHEREFORE, Plaintiff demands judgment be entered in its favor and against the

Defendants requesting that this Court award it damages and equitable relief as follows:


B. Awarding interest, costs and attorneys' fees;

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COUNT V

MISAPPROPRIATION OF TRADE SECRETS AND/OR CONFIDENTIAL INFORMATION UNDER THE ILLINOIS TRADE SECRETS ACT

AND UNFAIR COMPETITION AGAINST DEFENDANTS

134. Plaintiff realleges each of the paragraphs above and incorporates same by

reference.

135. Through extensive research and development, and the expenditure of a

considerable amount oftime, effort and money, ipIQ developed commercially valuable,

confidential, scientific, technical and business information, including the Unified Database

which encompasses, among other things, the Thesaurus and the Science Linkage Database, and

software, processes for patent name normalization, reassignment tracking, and corporate name

unification, customer lists and customer specific data and business plans and strategy, hereinafter

collectively referred to as "ipIQ trade secrets."

136. ipIQ trade secrets fall within the definition of trade secrets in the Illinois Trade

Secrets Act ("ITSA"), 765 ILCS 1065/1 et seq.

137. Defendants knew that the ipIQ trade secrets constituted a valuable commercial

asset of ipIQ and that ipIQ had expended much time, effort and money in developing the ipIQ

trade secrets.

138. Defendants knew that the information was communicated in confidence by ipIQ

to its employees, including Defendants.

139. The ipIQ trade secrets gave ipIQ an opportunity to obtain a substantial advantage

over its competitors who did not know, or have access to or use, the ipIQ trade secrets.

140. The ipIQ trade secrets were not generally known and not readily ascertainable by

proper means by others who could or would obtain economic value from their disclosure or use.

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associated with the WebEx web office for Closet Perfect, and (4) financial records on Defendants' online QuickBooks archives.

1. Entering an order compelling Defendants to return all ipIQ data and/or all ipIQ's trade secrets and confidential information to ipIQ;

K. Awarding ipIQ its costs and attorneys' fees; and


COUNT VI

TORTIOUS INTERFERENCE WITH CONTRACT AND PROSPECTIVE ECONOMIC ADVANTAGE AGAINST DEFENDANTS

149. Plaintiffrealleges each of the Counts set forth above and incorporates same by

reference.

150. Plaintiff is currently under contract with clients, and has numerous prospective,

advantageous economic relationships.

151. Plaintiff also has a non-disclosure agreement with Pipal Research.

152. Defendants, by and through their employees, agents and servants have

intentionally and/or with malice, interfered with current contractual relations and prospective

economic relationships of Plaintiff without valid justification or excuse.

153. The interference by Defendants with the contracts and prospective economic

relationships has caused a loss of prospective gain as a result of the interference, which has

resulted in damage to Plaintiff.

WHEREFORE, Plaintiff demands judgment be entered in its favor against all Defendants

and requesting that this Court award it damages and equitable relief as follows:


32

399632.1050814-38556

COUNT VII

UNJUST ENRICHMENT AGAINST DEFENDANTS

154. Plaintiff realleges each of the Counts set forth above and incorporates same by

reference.

155. Defendants have been enriched through their breaches of contract, breaches of

fiduciary duty and duty of loyalty and their misappropriation of trade secrets.

156. By benefiting from the breaches of contract, breaches of fiduciary duty and duty

of loyalty and their misappropriation of trade secrets, Defendants have been unjustly enriched.




B. Awarding punitive damages;

C. Awarding interest, costs and attorneys' fees;

D. Preliminarily and permanently enjoining Defendants from providing any services or knowledge in the area of intellectual property directly or indirectly to any ipIQ customer or active prospect as defined in their Employment Agreements until December 1, 2007;

E. Preliminarily and permanently enjoining Defendants from performing any services, including data, software tools, consulting and investment management services or developing any software tool or data offering which incorporate, use, disclose or benefit from ipIQ's data and/or ipIQ trade secrets, which would include but not be limited to any work in conjunction with Pipal Research and Solution Werx (including all ipIQ corporate opportunities and database creation) and any and all sUbscription based research and analysis;

F. Preliminarily and permanently enjoining Defendants from soliciting those entities who were customers or active prospects of ipIQ as defined in the Employment Agreement until December 1, 2007;

34

399632.1050814-38556

G. Requiring Defendants to account for and disgorge to ipIQ all profits Defendants gained from the intellectual property services they rendered on behalf of themselves or any of their companies to any customer or active prospect of ipIQ;

H. Preliminarily and permanently enjoining Defendants from publishing any materials, in any media, that incorporate or are created through the use, disclosure or benefit ofipIQ data and/or ipIQ's trade secrets and/or confidential information;

I. Preliminarily and permanently enjoin Defendants from destroying and/or deleting any documents, electronic or otherwise, that relate to Defendants' efforts to form a competing business, including (1) all e-mails in and out of [email protected], sheridan [email protected], [email protected], and [email protected], and [email protected], (2) documents associated with domain names: www.IPDecisionGroup.com; www.Patent360.com; and www.ClosetPerfect.com, (3) documents and tasks associated with the WebEx web office for Closet Perfect, and (4) financial records on Defendants' online QuickBooks archives.

J. Entering an order compelling Defendants to return all ipIQ data and/or all ipIQ's trade secrets and confidential information to ipIQ;

K. Awarding ipIQ its costs and attorneys' fees; and


COUNT VIII

CONVERSION AGAINST DEFENDANTS

157. Plaintiffrealleges each of the Counts set forth above and incorporates same by

reference.

158. Defendants' conduct constitutes the wrongful exercise of dominion and control

over the property of Plaintiff in a manner inconsistent with Plaintiffs rights.

159. As a result of the conversion of the property over which Plaintiff retained an

ownership interest, Plaintiff has been damaged.



35

399632.1 050814-38556

K. Granting ipIQ such other and further relief as is just and equitable.

Dated: December 7, 2006

Of Counsel:

STEPHEN M. ORLOFSKY JONATHAN M. KORN New Jersey Resident Partners J. LLEWELLYN MATHEWS New Jersey Resident Counsel BLANK ROME LLP A Pennsylvania LLP Woodland Falls Corporate Park 210 Lake Drive East Suite 200 Cherry Hill, NJ 08002 (856) 779-3600 [email protected] [email protected] Attorneys for Plaintiff, ipIQ, Inc.

399632.1 050814-38556

RTZ COOPER CHARTERED

orth LaSalle Street Suite 2700 Chicago, IL 60601 (312) 346-1300 Firm ID No.: 31395 Attorneys for Plaintiff, ipIQ, Inc.

37

DEMAND FOR JURY TRIAL

Plaintiff hereby demands a trial by jury on all issues triable of right by a jury.

Dated: December 7, 2006

Of Counsel:

STEPHEN M. ORLOFSKY JONATHAN M. KORN New Jersey Resident Partners J. LLEWELLYN MATHEWS New Jersey Resident Counsel BLANK ROME LLP A Pennsylvania LLP Woodland Falls Corporate Park 210 Lake Drive East Suite 200 Cherry Hill, NJ 08002 (856) 779-3600 [email protected] [email protected] Attorneys for Plaintiff, ipIQ, Inc.

399632.1 050814-38556

38

WARDS. WElL i\TRICK T. STANTON

HEATHER L. KRAMER SCHWARTZ COOPER CHARTERED

180 North LaSalle Street Suite 2700 Chicago, IL 60601 (312) 346-1300 Firm ID No.: 31395 Attorneys for Plaintiff, ipIQ, Inc.

ipIQ, INC.,

v.


Case No. 06-CH-16737

Plaintiff,

Judge Philip Bronstein JOHN KOEPKE, JAMES SHERIDAN, JR. and RAYMOND ZENKICH,

Defendants.

AGREED PROTECTIVE ORDER

Pursuant to the Illinois Code of Civil Procedure and Rule 201 of the Illinois Supreme

Court Rules, this matter is before the Court pursuant to the stipulation and agreement of ipIQ,

Inc. ("Plaintiff') and John Koepke, James Sheridan, Jr. and Raymond Zenkich ("Defendants").

The terms of this Agreed Protective Order are designed to protect confidential business

information which may be the subject of discovery in the above-captioned action, currently

pending in the Circuit Court of Cook County, Illinois.

By agreement of the parties, and for good cause shown, IT IS THEREFORE ORDERED,

as follows:

1. For purposes of this Order, "Confidential Information" and/or "Attorney

Confidential Information" shall include all discovery information designated in

good faith by any party as confidential pursuant to paragraph 2 below, as well as

extracts or summaries of the same, memoranda or briefs which contain the same,

and any non-privileged communications which address the substantive contents of

the same.

122534.00602/30298951 v.3

control of persons not authorized to received Confidential or Attorney

Confidential Information.

16. Nothing herein waives any party's attorney-client communication privilege or

work product protection.

17. All copies of signed acknowledgment forms (Exhibit A) shall be maintained by

counsel for the parties and produced to counsel for the opposing party upon

request, except for any consulting experts or other individuals whose identity

would not be subject to disclosure under applicable rules.

18. This Order is subject to the rights of any party or non-party (which rights are I

expressly reserved) to petition this Court to protect all confidential information by I

seeking additional protective orders, and to seek relief with respect to any !

objection raised by party or non-party concerning the productio~ or dissemination i

of confidential information.

AGREED:

ARTZ COOPER CHARTERED

18 N. LaSalle Street, Suite 2700 Chicago, Illinois 60601 (312) 346-1300 Firm ID No.: 31395 Attorneys for Plaintiff ipIQ, Inc. Dated: Set'tcmber ',2006

~~

122534.00602/30298951 v.3 7

ENTER:

Attorneys for Defendants John Koepke, James Sheridan, Jr. and Raymond Zenkich

Dated: ~~t~~;2006

Documents

Red Chalk Group - John Koepke - Raymond Zenkich - James Sheridan - Red Handed Group - Chicago - Patents