Ohio Supreme Court Adopts “Objectively Baseless” Test for Sham Litigation Claims

Guest Commentary

by Thomas J. Collin and Darcy M. Brosky, Thompson Hine LLP*

The Ohio Supreme Court held in American Chemical Society v. Leadscope, Inc., 2012 Ohio LEXIS 2236 (Sept. 18, 2012), that a firm suing for unfair competition based on a legal action must show both that the defendant had a subjective intent to injure it and that the action was objectively baseless.  The court adopted the U.S. Supreme Court’s test for liability for sham litigation under the antitrust laws.  The decision is important because it resolves uncertainty about liability for such a claim under Ohio law.  The lower court had held that liability could stand on proof of a subjective intent to injure alone.

The case arose when the American Chemical Society (“ACS”) sued former employees and their new company, Leadscope, Inc., (collectively, “Leadscope”) in the Franklin County Court of Common Pleas for breach of contract and trade secret theft.  Leadscope counterclaimed for defamation, tortious interference and unfair competition, alleging that ACS had filed the action in bad faith with the intent of destroying it. Continue reading “Ohio Supreme Court Adopts “Objectively Baseless” Test for Sham Litigation Claims”