By Craig Clough

Law360 (November 9, 2020, 11:19 PM EST) -- Allied BioScience, whose SurfaceWise 2 surface disinfectant was the first to be approved by the EPA to continuously protect against COVID-19, filed suit in Washington federal court Monday accusing its founder and former CEO of attempting to hold the company's intellectual property hostage in exchange for unearned compensation.

Craig Grossman served previously as the founder, president, and CEO of ABS but no longer has any official role with the company, according to the complaint, which accuses Grossman of misappropriation of trade secrets and a breach of fiduciary duty, among other allegations.

ABS said that Grossman helped invent some of the company's technology and those inventions have been described or claimed in some of ABS' patents, but Grossman refuses to sign an agreement declaring the company owns the inventions unless he is paid more than he deserves.

"First, the confirmatory assignment agreement is exactly that — a confirmation of ABS's ownership of the Grossman inventions, for which Grossman already received significant compensation," ABS said. "Second, Grossman's demand for unearned compensation and attempt to somehow hold the Grossman inventions hostage is unconscionable."

The suit claims that despite having no affiliation with ABS, Grossman "continues to hold himself out as an agent of ABS" including through using an "ABS-like email signature block in a deceptive and misleading way, and apparently he claims some continuing ownership of the Grossman inventions."

The company says after Grossman received a cease and desist letter, his attorney responded in an email that Grossman agrees ABS owns the technology he invented while at ABS and while he was a consultant for the company.

Grossman "is obligated to assign the Grossman inventions to ABS" according to the terms of his employment and consulting agreements, the company said.

ABS also claims that the knowledge Grossman has about the compensation of other ABS directors was gained through improper means, and that he also disclosed that confidential information to third parties.

"That Grossman then attempted to use this improperly acquired information to squeeze money out of ABS is astounding," ABS said.

The company added, "Grossman's repeated refusals to sign the confirmatory assignment agreement and demands for additional compensation and consideration regarding the Grossman inventions has created an ownership dispute over the Grossman inventions," the company said.

ABS is seeking ,among other things, a declaratory judgment that it is the sole owner of all of the "Grossman inventions" and a court order enjoining Grossman from claiming ownership over the inventions.

The lawsuit comes several weeks after the chemical company PureShield Inc. claimed in a lawsuit filed in Texas federal court that Allied BioScience Inc.'s SurfaceWise 2 surface disinfectant, which advertises protection against COVID-19 for up to seven days, infringes on 10 of PureShield's patents.

When the U.S. Environmental Protection Agency approved Texas' emergency request for approval of Allied's anti-COVID-19 sprays in August, Administrator Andrew Wheeler said it was the first time the agency approved a product that claims it can block the virus for so long.

Wheeler also said once SurfaceWise 2 is applied to a surface via an electrostatic sprayer, it can kill the coronavirus for up to seven days. It won't replace normal cleanings, but will supplement them, he said.

Grossman declined to comment and ABS did not immediately respond to a request for comment.

ABS is represented by Clifford S. Davidson of Snell & Wilmer LLP, and Charles M. Jones II and Tiffany Cooke of Haynes and Boone LLP.

Grossman is represented by Will Rava of Perkins Coie LLP. 

The case is Allied Bioscience Inc. et al., case number 2:20-cv-01650, in the U.S. District Court for the Western District of Washington.

--Editing by Emily Kokoll.

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