General Patent Corporation Sues Wi-Lan in the Wake of a Failed Acquisition

New York patent firm General Patent Corporation (“GPC”) is suing the Canadian Ottawa-based patent and licensing company Wi-Lan for fraud and misappropriation of confidential information. The claims allege that Wi-Lan faked an interest in acquiring GPC in order to gain access to its private trade secrets. It is further alleged that at the time a term sheet was signed in April 2011, Wi-Lan deliberately concealed facts that it knew or should have known would make a completion of the transaction impossible. Thus, after signing the term sheet, Wi-Lan became privy to a number of confidential documents for the sole purpose of finalizing an acquisition it allegedly knew would never happen. 

Furthermore, GPC highlights that Wi-Lan hired Paul Lerner, its general counsel of General Patent who had allegedly told GPC that he was leaving the company due to his desire for retirement. However, Lerner is allegedly currently setting up shop in Stamford Connecticut at Wi-Lan’s new office where he holds the title of senior general counsel. GPC notes that accepting this job with one of their competitors is a breach of Lerner’s non-compete agreement, which should have prevented him from working for any competing entity for one year following the termination of his employment. Ironically, Wi-Lan announced the appointment of Lerner at their new office to promote the growth of the company’s partnership-licensing business.

The suit is scheduled to be heard on October 11 this year. A U.S. District Court Judge will rule on whether or not Wi-Lan will be able to use or disclose any of the confidential information it has discovered as well as Mr. Lerner’s fate at his new place of employment.

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