Case: 1:12-cv-08450 Document #: 84 Filed: 01/13/15 Page 1 of 32 PageID #:1188
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
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`No. 12 C 8450
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`Hon. Joan B. Gottschall
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`OCEAN TOMO, LLC,
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`Plaintiff-Counterdefendant,
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`vs.
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`JONATHAN BARNEY and
`PATENTRATINGS, LLC,
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`Defendants-Counterplaintiffs.
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`AMENDED COUNTERCLAIM OF
`JONATHAN BARNEY AND PATENTRATINGS, LLC
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`Jonathan Barney (“Mr. Barney”) and PatentRatings, LLC (“PatentRatings”), for their
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`Amended Counterclaim against Ocean Tomo, LLC (“Ocean Tomo”), allege as follows:
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`NATURE OF THE ACTION
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`1.
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`This amended counterclaim arises from Ocean Tomo’s malicious, underhanded
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`campaign to wrongfully oppress and freeze out one of its minority owners, Jonathan Barney; to
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`cheat Mr. Barney out of the substantial benefits that Ocean Tomo promised to Mr. Barney in
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`2004 when Ocean Tomo induced him to exchange an ownership interest in his company,
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`PatentRatings, LLC, for a minority ownership interest in Ocean Tomo; and to attempt to steal,
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`though a variety of means, the very valuable PatentRatings System and the underlying patents,
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`data, algorithms, and other valuable intellectual property owned by PatentRatings. Mr. Barney
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`and PatentRatings bring this counterclaim to recover the significant damages they have suffered
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`because of Ocean Tomo’s fraud, breaches of contract, tortious interference with prospective
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`economic advantage, and violations of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030
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`(the “CFAA”), to recover punitive damages to punish Ocean Tomo for its willful and malicious
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`conduct, and to compel Ocean Tomo to provide access to the books and records of the company.
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`Ocean Tomo Ex. 1005-001
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`

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`Case: 1:12-cv-08450 Document #: 84 Filed: 01/13/15 Page 2 of 32 PageID #:1189
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`PARTIES
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`2.
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`Counterplaintiff Jonathan Barney (“Mr. Barney”) lives in Newport Beach,
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`California. He is a member of Ocean Tomo, owning a minority interest in the company. On
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`information and belief, Mr. Barney currently owns 136.9 units in Ocean Tomo, which represents
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`8.12% of the outstanding units issued by Ocean Tomo. Mr. Barney also owns 23.1 units
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`purportedly forfeited by Mr. Barney when Ocean Tomo wrongfully forced him to resign, which
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`represents an additional 1.37% of the outstanding units in the company.
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`3.
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`Counterplaintiff PatentRatings, LLC (“PatentRatings”) is a California limited
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`liability company, with its principal place of business in Irvine, California.
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`4.
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`Counterdefendant Ocean Tomo, LLC (“Ocean Tomo”) is an Illinois limited
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`liability company, with its principal place of business in Chicago, Illinois. Ocean Tomo is a
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`member of PatentRatings, and currently owns 25% of the outstanding units in PatentRatings.
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`JURISDICTION
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`5.
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`This Court has jurisdiction over this amended counterclaim under 28 U.S.C.
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`§1331 and 28 U.S.C. §1367.
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`ALLEGATIONS COMMON TO ALL COUNTS
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`Mr. Barney Invents The PatentRatings System, And Forms PatentRatings, LLC
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`6.
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`Mr. Barney is an accomplished engineer, inventor, entrepreneur, and patent
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`lawyer. One of Mr. Barney’s inventions is the PatentRatings® patent analysis system (the
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`“PatentRatings System”), which is among the most advanced statistical patent data, rating, and
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`analysis systems in the world. The statistical rating algorithm underlying the PatentRatings
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`System has been awarded multiple patents by the United States Patent and Trademark Office and
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`is used by, among others, major global corporations to assess the quality and relative value of
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`2
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`Ocean Tomo Ex. 1005-002
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`

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`Case: 1:12-cv-08450 Document #: 84 Filed: 01/13/15 Page 3 of 32 PageID #:1190
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`their patent portfolios (and the portfolios of competitors and potential acquisition targets),
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`relevant patents and technologies, competition, and relevant trends.
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`7.
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`In 2000, Mr. Barney formed a company, PatentRatings, LLC, to implement the
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`PatentRatings System, and bring it to the marketplace. Mr. Barney invested enormous amounts
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`of his time, energy, skill, and creativity ─ and significant amounts of his own funds ─ in
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`PatentRatings, LLC.
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`Mr. Barney Agrees To Sell Ocean Tomo An Interest In
`PatentRatings, LLC In Exchange For A Minority Interest In Ocean Tomo
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`8.
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`Word of Mr. Barney’s innovative PatentRatings System quickly spread in the
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`industry. A number of people and entities who were interested in the system reached out to Mr.
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`Barney. One of them was Ocean Tomo, LLC, a Chicago-based firm.
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`9.
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`Ocean Tomo wanted to be able to take advantage of the PatentRatings System for
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`the benefit of Ocean Tomo, and claimed that, in exchange, it was willing to provide Mr. Barney
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`with a number of significant benefits, including the right to share in Ocean Tomo’s profits (and
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`losses), and the right to receive a portion of the revenues generated by Ocean Tomo using the
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`PatentRatings System. Mr. Barney and Ocean Tomo ultimately negotiated a transaction that
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`involved a September 1, 2004 license agreement (as amended by an amendment dated May 2,
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`2005, the “License Agreement”; a copy of the License Agreement is attached as Exhibit 1), a
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`December 31, 2004 equity exchange agreement (the “Equity Exchange Agreement”; a copy of
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`the Equity Exchange Agreement is attached as Exhibit 2), a December 31, 2004 letter agreement
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`(the “Letter Agreement”; a copy of the Letter Agreement is attached as Exhibit 3), and an
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`employment agreement dated January 1, 2005 (as amended by an amendment dated July 28,
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`2008, the “Employment Agreement”; a copy of the Employment Agreement is attached as
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`Exhibit 4). All of these agreements were entered into by and between the same parties, were
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`3
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`Ocean Tomo Ex. 1005-003
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`Case: 1:12-cv-08450 Document #: 84 Filed: 01/13/15 Page 4 of 32 PageID #:1191
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`executed at the same time, and were each a necessary condition and required part of the overall
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`transaction contemplated by the parties. The License Agreement granted Ocean Tomo a royalty-
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`free license to use the PatentRatings System for its own internal use in exchange for a promise to
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`pay PatentRatings 100% of any revenues collected by Ocean Tomo from the sale of
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`PatentRatings products and services to its clients. In the Letter Agreement, the parties agreed
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`that “[PatentRatings] products will not be utilized by [Ocean Tomo’s] expert services practice.”
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`Under the Equity Exchange Agreement, Ocean Tomo acquired 25% of the equity in
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`PatentRatings from Mr. Barney, and Mr. Barney acquired 100 units (representing approximately
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`6.8% of the then-outstanding equity in Ocean Tomo) from Ocean Tomo. PatentRatings and
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`Ocean Tomo later entered into a Supplemental License Agreement dated May 18, 2006 (the
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`“Supplemental License Agreement”; a copy of the Supplemental License Agreement is attached
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`as Exhibit 5).
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`10.
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`In order to induce Mr. Barney to enter into the License Agreement and the Equity
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`Exchange Agreement, Ocean Tomo promised Mr. Barney, among other things, that: (a) Mr.
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`Barney would have employment as a high-level executive at Ocean Tomo; (b) Mr. Barney would
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`receive additional earned equity in Ocean Tomo; and (c) there were no outstanding contracts or
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`promises relating to the issuance, sale, or transfer of any equity securities of Ocean Tomo, which
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`was important to Mr. Barney, because any existing, undisclosed agreements to give Ocean Tomo
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`shares to anyone else would dilute the value of the Ocean Tomo shares Mr. Barney was to
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`receive.
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`The Operating Agreement
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`11.
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`As a member of Ocean Tomo, Mr. Barney is a party to the operating agreement
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`for the company, which has been amended from time to time. On information and belief, the
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`current version of the operating agreement is the Second Amended and Restated Operating
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`4
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`Ocean Tomo Ex. 1005-004
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`Case: 1:12-cv-08450 Document #: 84 Filed: 01/13/15 Page 5 of 32 PageID #:1192
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`Agreement of Ocean Tomo, LLC dated as of January 1, 2008 (the “Operating Agreement”; a
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`copy of the Operating Agreement is attached as Exhibit 6).
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`12.
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`The Operating Agreement includes provisions relating to, among other things, the
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`allocations of profits and losses among the members of Ocean Tomo, the issuance of additional
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`equity units to members, and the rights of members to have access to the books and records of
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`Ocean Tomo.
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`13. With respect to the allocation of profits and losses among the members, the
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`Operating Agreement provides that, subject to certain adjustments: (a) 75% of “Net Profits from
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`Operations” shall be allocated among the members as determined by the Board of Managers, and
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`the remaining 25% of “Net Profits from Operations” shall be allocated among the members in
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`accordance with their respective percentage interests; and (b) “Net Profits (Other than Net Profits
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`from Operations)” shall be allocated among the members in accordance with their respective
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`percentage interests. These provisions meant that the Board of Managers purportedly had the
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`ability to exercise discretion with respect to the allocation of 75% of the net profits from
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`operations, but had no such purported discretion with respect to net profits other than net profits
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`from operations.
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`14.
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`As Ocean Tomo had promised Mr. Barney in 2004 when he agreed to exchange
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`equity in PatentRatings, LLC for a minority interest in Ocean Tomo, the Operating Agreement
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`also provides, in Section 10.06, that each member while employed by Ocean Tomo (including
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`Mr. Barney) would receive an additional 10 equity units each year.
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`15. With respect to the Ocean Tomo members’ rights to have access to the books and
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`records of Ocean Tomo, Section 6.04 of the Operating Agreement provides: “The Board of
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`Managers shall maintain and preserve, during the term of the Company, the accounts, books and
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`5
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`Ocean Tomo Ex. 1005-005
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`Case: 1:12-cv-08450 Document #: 84 Filed: 01/13/15 Page 6 of 32 PageID #:1193
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`relevant Company documents described in Section 9.09. Each Member shall have the right, at a
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`time during ordinary business hours, as reasonably determined by the Board of Managers, to
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`inspect and copy, at the requesting Member’s expense, the books and records of the Company
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`described in Section 9.09 hereof, and such other documents which the Board of Managers, in its
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`discretion, deems appropriate.” Section 9.09, in turn, states that, “At the expense of the
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`Company, the Board of Managers shall maintain records and accounts of the operations and
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`expenditures of the Company,” and then identifies the minimum records that the Company shall
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`keep at its principal place of business.
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`16.
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`The books and records of Ocean Tomo that are referenced in Section 9.09 of the
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`Operating Agreement include, but are not limited to, detailed monthly and quarterly financial
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`reporting packages, and “equity bonus tracker” reports.
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`After Ocean Tomo Obtains Access To And Leverage Over PatentRatings, PatentRatings
`And Mr. Barney Learn That It Has No Interest In Complying With Its Promises
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`17.
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`After entering into the transactions with Ocean Tomo in 2004, and after Mr.
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`Barney became a senior executive of the company, PatentRatings and Mr. Barney soon learned
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`what others before (and after) them also discovered ─ the environment at Ocean Tomo was rife
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`with conflict, back-biting, and shady business and accounting practices.
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`18.
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`Even in the face of such a profoundly negative environment, however,
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`PatentRatings and Mr. Barney did their best to try to make the partnership with Ocean Tomo a
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`success. In good faith, PatentRatings consented to Ocean Tomo hiring away its founder and sole
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`employee, Mr. Barney, and provided Ocean Tomo with its full support and assistance in further
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`developing and exploiting the PatentRatings System for the mutual benefit of Ocean Tomo and
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`PatentRatings. In good faith, Mr. Barney consistently devoted his time, talent, energy, and
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`creativity to Ocean Tomo. Mr. Barney also provided, at Ocean Tomo’s specific request, detailed
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`6
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`Ocean Tomo Ex. 1005-006
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`Case: 1:12-cv-08450 Document #: 84 Filed: 01/13/15 Page 7 of 32 PageID #:1194
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`Confidential Information (as defined in the License Agreement) sufficient to enable Ocean Tomo
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`to operate, maintain, and improve the PatentRatings System on its own in the event that Mr.
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`Barney was no longer able to do so (such as in the event of his death or incapacity).
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`19.
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`However, once Ocean Tomo received what it wanted from PatentRatings and Mr.
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`Barney, Ocean Tomo repaid their hard work, dedication, and good faith by embarking on a
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`campaign to force Mr. Barney to resign from Ocean Tomo, to freeze Mr. Barney out of Ocean
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`Tomo management, and to deprive Mr. Barney and PatentRatings of the significant other
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`benefits they had been promised and were entitled to receive. Ocean Tomo has further attempted
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`to destroy or incapacitate Mr. Barney and PatentRatings financially by, among other things,
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`defaulting on its contractual obligations, impairing Mr. Barney’s and PatentRatings’ ability to
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`earn income from other sources, and bringing multiple baseless litigation claims against Mr.
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`Barney and PatentRatings ─ all with the intent and purpose of pummeling Mr. Barney and
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`PatentRatings financially while Ocean Tomo steals the very valuable PatentRatings System and
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`the underlying patents, data, algorithms, and other valuable intellectual property owned by
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`PatentRatings, and wrongfully profits from all of Mr. Barney’s years of hard work, investment,
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`and sacrifice.
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`Ocean Tomo Uses “Creative” Accounting
`To Avoid Its Obligation To Share Pro Rata With Mr. Barney
`Profits Relating To The ICAP And IPXI Transactions
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`20.
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`For example, in 2009, Ocean Tomo completed the sale of one of its businesses,
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`the Ocean Tomo Transactions business, to ICAP. The profits from that sale, which totaled
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`approximately $10 million, constituted net profits other than “Net Profits From Operations,” and
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`therefore were required to be distributed among the members of Ocean Tomo pro rata in
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`accordance with their ownership interests.
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`7
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`Ocean Tomo Ex. 1005-007
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`Case: 1:12-cv-08450 Document #: 84 Filed: 01/13/15 Page 8 of 32 PageID #:1195
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`21.
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`Remarkably, however, Ocean Tomo apparently treated the profits from the ICAP
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`sale as “Net Profits From Operations,” in order to attempt to justify Ocean Tomo’s failure to
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`allocate those profits pro rata in accordance with the members’ ownership interests, as the
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`Operating Agreement required.
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`22.
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`By doing so, Ocean Tomo not only violated accounting principles (and common
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`sense), but also representations that were made to Mr. Barney by James Malackowski, the
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`President of Ocean Tomo, before and after the ICAP transaction closed, regarding the allocation
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`of the profits from that transaction.
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`23.
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`On information and belief, Ocean Tomo appears to have engaged in similar
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`chicanery with respect to the proceeds resulting from the sale of shares of its Intellectual
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`Property Exchange International, Inc. and/or IPXI Holdings, LLC businesses (individually or
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`collectively, “IPXI”) to new investors.
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`Ocean Tomo Forces Mr. Barney To Resign To Freeze Him Out
`And To Deny Him The Salary, Benefits, and Equity Interests He Was Promised
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`24.
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`Ultimately, Ocean Tomo created intolerable working conditions and severe
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`conflicts of interests with the goal of forcing Mr. Barney to resign his employment from Ocean
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`Tomo ─ which resignation Ocean Tomo intended to use as an excuse for depriving Mr. Barney
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`of the significant benefits that Mr. Barney had been promised and was entitled to receive.
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`25.
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`By forcing Mr. Barney to resign in February 2011, Ocean Tomo intended to avoid
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`paying Mr. Barney his salary and benefits as a senior executive at Ocean Tomo. The position as
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`a senior executive, and the salary and benefits package associated with it, was one of the
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`significant benefits that Mr. Barney was promised in 2004 when he agreed to exchange equity in
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`PatentRatings for a minority interest in Ocean Tomo.
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`8
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`Ocean Tomo Ex. 1005-008
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`Case: 1:12-cv-08450 Document #: 84 Filed: 01/13/15 Page 9 of 32 PageID #:1196
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`26. Moreover, after forcing Mr. Barney to resign, Ocean Tomo also purported to
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`exercise purported rights to redeem ─ without paying any consideration whatsoever ─ a
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`substantial portion of the additional equity units that Mr. Barney had received. On information
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`and belief, Ocean Tomo’s desire to deprive Mr. Barney of those equity units was one of the
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`motivating factors that led it to force Mr. Barney to resign.
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`In An Effort To Conceal Its Wrongdoing, Ocean Tomo Refuses To Allow
`Mr. Barney Reasonable Access To The Books And Records Of Ocean Tomo
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`27.
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`As described above, Ocean Tomo forced Mr. Barney to resign his employment
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`from Ocean Tomo in February 2011.
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`28.
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`Following his resignation, Mr. Barney made repeated requests for access to the
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`books and records of Ocean Tomo.
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`29.
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`30.
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`Ocean Tomo has denied those requests without any legitimate justification.
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`On information and belief, Ocean Tomo has denied Mr. Barney access to the
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`books and records of the company in an effort to impair Mr. Barney’s ability to understand the
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`value of his equity interest in Ocean Tomo and the amount of dividends and other distributions
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`owed, and to frustrate his efforts to discover further information about Ocean Tomo’s
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`wrongdoing. Mr. Barney anticipates that discovery in this action will reveal significant
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`accounting discrepancies and other wrongdoing by Ocean Tomo (and possibly others) in addition
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`to what is alleged here, and reserves his rights to amend his pleading to assert claims arising
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`from all such wrongdoing.
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`Mr. Barney And PatentRatings Discover That Ocean Tomo Had Breached
`Its Representations And Warranties In The Equity Exchange Agreement
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`31.
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`After being forced out of Ocean Tomo ─ and deprived of any meaningful access
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`to the books and records of the company ─ Mr. Barney and PatentRatings discovered that Ocean
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`9
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`Ocean Tomo Ex. 1005-009
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`Case: 1:12-cv-08450 Document #: 84 Filed: 01/13/15 Page 10 of 32 PageID #:1197
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`Tomo had breached the representations and warranties that it made in the Equity Exchange
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`Agreement.
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`32.
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`In the Equity Exchange Agreement, Ocean Tomo represented and warranted,
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`among other things, that:
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`a. “There are no Contracts relating to the issuance, sale, or transfer of any equity
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`securities or other securities of [Ocean Tomo]” (Ex. 2 § 4.3);
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`b. “Schedule 4.12(a) contains a complete and accurate list, and [Ocean Tomo]
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`has delivered to [PatentRatings] and Barney true and complete copies
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`of. . . (i) each Applicable Contract that was not entered into in the Ordinary
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`Course of Business and that involves expenditures or receipts of [Ocean
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`Tomo] in excess of $1,000” . . . and (iii) each joint venture, partnership, and
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`other applicable Contract (however named) involving a sharing of profits,
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`losses, costs, or liabilities by [Ocean Tomo] with any other Person” (Ex. 2
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`§§ 4.12(a)(i) & 4.12(a)(iii).)
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`33. Mr. Barney discovered in or about December 2011 that, at the time Ocean Tomo
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`made those representations and warranties to Mr. Barney, there was in fact an existing secret
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`agreement between Ocean Tomo and Michael Lasinski under which Ocean Tomo had promised
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`to transfer at a later date a significant number of equity units in Ocean Tomo to Mr. Lasinski.
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`(Ocean Tomo and Mr. Lasinski entered into that agreement because Mr. Lasinski was bound by
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`a covenant not to compete with his former employer, and therefore could not “publicly” become
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`a member of Ocean Tomo.)
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`34.
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`Ocean Tomo’s agreement with Mr. Lasinski constitutes a material breach of
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`Ocean Tomo’s representations and warranties in the Equity Exchange Agreement.
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`10
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`Ocean Tomo Ex. 1005-010
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`Case: 1:12-cv-08450 Document #: 84 Filed: 01/13/15 Page 11 of 32 PageID #:1198
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`PatentRatings Discovers That Ocean Tomo Had Fraudulently Induced
`PatentRatings To Enter Into Further Agreements In 2007,
`And Fraudulently Concealed Revenues Owed By Ocean Tomo
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`35.
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`After entering into the License Agreement, Ocean Tomo began to use the
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`PatentRatings System ever more increasingly in its existing business. Further, Ocean Tomo
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`began to envision novel applications and new business ventures that it could engage in using the
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`PatentRatings System. These expanded and novel uses required an expansion or upgrade of the
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`existing PatentRatings System. PatentRatings did not have the capital for this expansion. Ocean
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`Tomo did, so Ocean Tomo agreed to provide the capital by way of loans to PatentRatings.
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`36.
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`On or about around May 31, 2005, PatentRatings and Ocean Tomo entered into a
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`Management Services Agreement (“MSA”) by which (among other things) Ocean Tomo
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`assumed managerial control of PatentRatings, including without limitation authority to loan
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`money to PatentRatings. Under the MSA, Ocean Tomo was still entitled to royalty-free use of
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`the PatentRatings System for its internal purposes and PatentRatings was still entitled to receive
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`100% of the revenues Ocean Tomo collected from the sale of PatentRatings products and
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`services to its clients, but PatentRatings was obligated to pay Ocean Tomo a management fee of
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`86.75% of its net revenues. Under the MSA, Ocean Tomo hired and managed all of the
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`personnel and contractors engaged to build Ocean Tomo’s desired improvements to the
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`PatentRatings System, which improvements would become the property of PatentRatings under
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`the parties’ agreements. Ocean Tomo claimed the amounts expended for this purpose were a
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`loan to PatentRatings.
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`37.
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`By mid-2007, Ocean Tomo asserted that the amount loaned to PatentRatings
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`under the MSA was well in excess of $1.5 million. PatentRatings disputed the amount and
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`requested an accounting of the loans, but received nothing. PatentRatings also observed that the
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`work being directed by Ocean Tomo under the MSA did not create the potential of greater
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`11
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`Ocean Tomo Ex. 1005-011
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`Case: 1:12-cv-08450 Document #: 84 Filed: 01/13/15 Page 12 of 32 PageID #:1199
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`revenue to PatentRatings in the future but rather was in the nature of improving Ocean Tomo’s
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`day-to-day business. Thus, PatentRatings believed it was footing the bill for Ocean Tomo’s
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`costs of doing business. PatentRatings desired to regain control of its fiscal affairs and
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`demanded that Ocean Tomo pay for all further development of the PatentRatings System.
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`PatentRatings also stated to Ocean Tomo that it intended to exercise its right to terminate the
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`MSA and that it would no longer agree to pay for the costs Ocean Tomo incurred and was
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`continuing to incur in connection with its further use and development of the PatentRatings
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`System.
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`38.
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`The dispute came to a head in July 2007 when Mr. Barney and James
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`Malackowski (chief executive officer of Ocean Tomo) engaged in a heated negotiation about the
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`parties’ relationship. Mr. Barney, unhappy that Ocean Tomo had purported to loan
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`PatentRatings in excess of $1.5 million but had failed to either provide PatentRatings with any
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`actual capital or account for the sums allegedly “owed,” explained that PatentRatings intended to
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`terminate the MSA and that Mr. Barney intended to terminate his employment with Ocean
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`Tomo. Eventually, a compromise was reached whereby Ocean Tomo agreed to assume the
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`obligation for all further expenses associated with Ocean Tomo’s use and further development of
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`the PatentRatings System and PatentRatings agreed to enter into a $1.5 million note and accept a
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`reduced share of revenues from Ocean Tomo’s sale of PatentRatings products and services to its
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`clients.
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`39.
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`On or about July 19, 2007, Ocean Tomo and PatentRatings entered into a written
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`amendment of the License Agreement (the “Amendment”; a copy of the Amendment is attached
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`as Exhibit 7). The Amendment provides, among other things, “OT will no longer increase the
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`Principal due under the Note (nor accrue any interest thereon) for further investments made by
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`12
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`Ocean Tomo Ex. 1005-012
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`Case: 1:12-cv-08450 Document #: 84 Filed: 01/13/15 Page 13 of 32 PageID #:1200
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`OT for any Improvements.” At paragraph H, the Amendment provides that the MSA is
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`terminated and declared null and void. The Amendment also provides that Ocean Tomo would
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`pay PatentRatings either a 13.25% or 25% share (depending on the category of product or
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`service delivered) of any revenues it generated using the PatentRatings System. In connection
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`with the Amendment, Ocean Tomo and PatentRatings entered into a Secured Promissory Note
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`(the “Note”), by which PatentRatings promised to pay to Ocean Tomo the principal sum of $1.5
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`million, and an Intellectual Property Security Agreement (the “Security Agreement”), by which
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`PatentRatings granted to Ocean Tomo a security interest in all of its patents, trademarks, and
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`other assets as security for its obligation under the Note (a copy of the Note and the Security
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`Agreement are attached as Exhibits 8 and 9, respectively). By executing the Amendment, the
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`Note and the Security Agreement, PatentRatings attempted to resolve the disputed position by
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`Ocean Tomo that Ocean Tomo had extended in excess of $1.5 million in “loans” to
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`PatentRatings and any future obligations to pay, reimburse, or be indebted for any further
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`expenses incurred by Ocean Tomo for its use of, and improvements to, the PatentRatings
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`System.
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`40.
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`Prior to and at the time Mr. Barney executed the Amendment, the Note and the
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`Security Agreement on behalf of PatentRatings, Mr. Malackowski repeatedly assured Mr.
`
`Barney that Ocean Tomo would assume the obligation for all further expenses associated with
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`Ocean Tomo’s use and continued development of the PatentRatings System, and that
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`PatentRatings would have no further obligation for such expenses. These statements were
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`reiterated by Ray Millien, Ocean Tomo’s in-house counsel who drafted the agreement
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`documents. Mr. Malackowski also assured Mr. Barney that: (i) Ocean Tomo had not used and
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`was not using the PatentRatings Analysis (as defined in the License Agreement) to provide
`
`
`
`13
`
`Ocean Tomo Ex. 1005-013
`
`

`
`Case: 1:12-cv-08450 Document #: 84 Filed: 01/13/15 Page 14 of 32 PageID #:1201
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`
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`information or reports to any external clients of Ocean Tomo as part of any products or services
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`provided by its business units known as Expert Services, Appraisals, Valuations, Investments,
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`Risk Management, and Corporate Finance, (ii) Ocean Tomo had only used and was only using
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`the PatentRatings Analysis to provide information or reports to external clients of Ocean Tomo
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`as part of the products or services provided by its business units known as Analytics and Ocean
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`Tomo PatentRatings (“OTPR”), (iii) all revenues invoiced or collected by Ocean Tomo in
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`connection with the sale of any products or services that used or incorporated any PatentRatings
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`Analysis had been reported to PatentRatings in accordance with the terms of the License
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`Agreement, and (iv) there were no other revenues invoiced or collected by Ocean Tomo prior to
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`July 19, 2007 in connection with the sale of any products or services that used or incorporated
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`any PatentRatings Analysis. PatentRatings reasonably relied on these assurances when it entered
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`into the Amendment, the Note, and the Security Agreement.
`
`41.
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`After July 19, 2007, Ocean Tomo paid all the expenses associated with Ocean
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`Tomo’s use and further development of the PatentRatings System. PatentRatings did not pay
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`and was not asked to pay for any such expenses.
`
`42.
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`Between July 19, 2007 and the end of 2010, Ocean Tomo never asserted that it
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`was paying expenses that PatentRatings should have been paying, or words to that effect.
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`Between July 19, 2007 and the end of 2010, Ocean Tomo never asserted that PatentRatings was
`
`in breach of its obligations under any of the agreements to pay certain expenses. Between July
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`19, 2007 and the end of 2010, Ocean Tomo never demanded that PatentRatings pay any costs
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`associated with Ocean Tomo’s use of the PatentRatings System.
`
`43.
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`In early 2011, Ocean Tomo for the first time asserted that PatentRatings was
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`liable for approximately $5,000,000 in costs incurred by Ocean Tomo in connection with its use
`
`
`
`14
`
`Ocean Tomo Ex. 1005-014
`
`

`
`Case: 1:12-cv-08450 Document #: 84 Filed: 01/13/15 Page 15 of 32 PageID #:1202
`
`
`
`of the PatentRatings System and that it was in breach of its obligations under the License
`
`Agreement as amended by the Amendment (the “Amended License Agreement”) and the
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`Supplemental License Agreement. Ocean Tomo demanded that PatentRatings compensate
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`Ocean Tomo for all such costs incurred from after July 19, 2007 and assume full responsibility
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`for all further costs going forward. When PatentRatings refused, Ocean Tomo commenced
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`arbitration on February 17, 2011.
`
`44.
`
`During arbitration hearings held in March 2012, Mr. Malackowski testified that
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`Ocean Tomo never at any time intended to relieve PatentRatings of the costs associated with
`
`Ocean Tomo’s use and further development of the PatentRatings System. Mr. Malackowski
`
`denied that he ever made such representations to PatentRatings at or before the date that the
`
`parties entered into the Amendment, the Note, and the Security Agreement. Mr. Malackowski
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`further testified that Ocean Tomo knew in or shortly after July 2007 that Ocean Tomo was
`
`incurring costs with the express intent of eventually charging them back to PatentRatings. Thus,
`
`PatentRatings learned in March 2012 that the representations by Ocean Tomo upon which
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`PatentRatings had relied in entering into the Amendment, the Note, and the Security Agreement
`
`were false when made.
`
`45.
`
`In November and December 2011, during discovery
`
`in
`
`the arbitration
`
`proceedings, Ocean Tomo produced documents in response to demands by PatentRatings. In
`
`reviewing these documents, PatentRatings for the first time learned that for years Ocean Tomo
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`routinely and systematically sold products and reports to its clients using PatentRatings Analysis
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`for which Ocean Tomo had never reported or paid revenues to PatentRatings, in spite of a
`
`contractual obligation to do so. Specifically, PatentRatings learned that Ocean Tomo, in
`
`violation of the Letter Agreement, was using the PatentRatings Analysis in connection with the
`
`
`
`15
`
`Ocean Tomo Ex. 1005-015
`
`

`
`Case: 1:12-cv-08450 Document #: 84 Filed: 01/13/15 Page 16 of 32 PageID #:1203
`
`
`
`division of Ocean Tomo’s business known as expert services. At the time PatentRatings entered
`
`into the Amendment, Mr. Malackowski and others at Ocean Tomo had represented to
`
`PatentRatings that the expert services division did not utilize the PatentRatings Analysis such
`
`that no revenues were due to PatentRatings as a result of its activities. In December 2011,
`
`PatentRatings for the first time learned that these representations were false, that the expert
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`services division routinely used PatentRatings Analysis in preparing and delivering work product
`
`to Ocean Tomo’s clients, that PatentRatings was owed substantial revenues as a result of these
`
`activities, and that Ocean Tomo had fraudulently concealed these facts from PatentRatings for
`
`years.
`
`Ocean Tomo Continues To Deprive PatentRatings Of
`Substantial Revenues Owed Under the License Agreement
`
`
`46.
`
`Even after PatentRatings notified Ocean Tomo of the discovered systematic
`
`underreporting of revenues under the License Agreement, Ocean Tomo refused to investigate or
`
`correct its reporting processes or make any reasonable attempt to identify all such instances of
`
`underreporting. Instead, Ocean Tomo continued to conceal the previously underreported
`
`revenues and continued to cheat PatentRatings by concocting yet additional schemes and devices
`
`designed to conceal and/or underreport revenues owed to PatentRatings.
`
`47.
`
`On October 19, 2012, PatentRatings transmitted to Ocean Tomo a letter which
`
`described in more detail Ocean Tomo’s systematic underreporting of revenues under the License
`
`Agreement and other related breaches. In the letter, PatentRatings requested that Ocean Tomo
`
`cure all of the breaches described in the letter within thirty (30) days. As of the filing of this
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`counterclaim, Ocean Tomo has failed to cure the breaches identified in PatentRatings’ October
`
`19, 2012 lett