In a major development in the ‘David v Goliath’ lawsuit over who really invented a piece of bill-drafting software, a US court has mostly denied Akin Gump’s motion to throw out the counterclaims of Californian legal technology company Xcential Legislative Technologies.
The District of Columbia Court dismissed the petition with regard to four out of five counterclaims, which were filed in response to a claim by Akin Gump that Xcential’s Bill Synthesis software was in fact invented by Akin Gump counsel Louis Agnello.
To determine whether a claim survives a motion to dismiss, a court must examine whether the claim includes well-pled factual allegations and whether the allegations plausibly entitle the claimant to relief.
D.C. Superior Court Judge Juliet McKenna ruled that Xcential has adequately asserted the grounds for a breach of contract (count one); that they have sufficiently alleged all elements in support a claim of misappropriation of trade secrets and confidential information (counts two and three); and that they have adequately pled a breach of implied contract that would entitle them to relief if proved to be true (count four). The judge denied that the representation that Agnello invented the software constitutes slander of title (count five).
“Our quest for justice and to protect the rights of inventors to patent and market their innovative products will go forward,” said Grant Vergottini, Xcential’s co-founder, chief executive officer and chief technical officer. “I am pleased that the judge saw through Akin Gump’s blatant attempt to deny our firm the opportunity to show in a court of law why only Xcential could have invented our bill-drafting technology.”
Akin Gump brought a claim for damages against Xcential in October, alleging that the company had taken a concept introduced to it under NDA by Agnello and incorporated the concept into its existing LegisPro software.
The idea, Akin Gump says in its claim, would take proposed redline changes to an existing law and use those changes to generate a draft bill in the format suitable for submission to Congress, making bill drafting faster, more accurate and less expensive.
Akin Gump says that Agnello, who formerly worked in Congress, explained his idea in detail to Xcential so they could draft the code to prototype the bill-drafting software, with the initial prototype referred to as the “K-Street parade” project.
The Washington lobbying giant alleges that after many conversations and demonstrations, Xcential did not deliver a prototype, but that CEO and founder Grant Vergottini filed his own patent application, renaming it ‘Bill Synthesis.’ It claims damages from misappropriation of trade secrets, breach of contract, breach of good faith and fair dealing, unjust enrichment and replevin, which enables a person to recover goods taken wrongfully.
Commenting on the claim in November, Vergottini said: “Only Xcential has created software that functions as described in the patent application for Bill Synthesis. We will not be intimidated into surrendering our know-how and intellectual property to a giant law firm like Akin Gump. This litigation should be a warning to all innovative legal technology providers.”
Commenting on the Court’s decision to allow the majority of Xcential’s counterclaims to go ahead, a spokesperson for Akin Gump told Legal IT Insider: “We believe Xcential’s claims are meritless, and we look forward to proving our case in court.”
Xcential is being represented by Holland & Knight. The case is No. 2022 CA 004744 B, filed in the Civil Division of the Superior Court of the District of Columbia.