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Leis v. Davidson

United States District Court, N.D. Illinois

April 5, 2013

JONATHAN LEIS and SARTASH, INC., Plaintiffs,
v.
WILLIAM DAVIDSON and MICHAEL LEONETTI, Defendants

For Jonathan Leis, Sartash LLC, Plaintiffs, Counter Defendants: John David Fitzpatrick, Steven P. Mandell, Stephen J. Rosenfeld, Mandell Menkes LLC, Chicago, IL.

For William Davidson, Michael Leonetti, Defendants: Thomas M Lombardo, LEAD ATTORNEY, Gabriel Lewis Mathless, Ginsberg Jacobs Llc, Chicago, IL.

For William Davidson, Counter Claimant: Thomas M Lombardo, LEAD ATTORNEY, Gabriel Lewis Mathless, Ginsberg Jacobs Llc, Chicago, IL.

OPINION

JOAN B. GOTTSCHALL, United States District Judge.

Page 822

ORDER

Plaintiffs, Jonathan Leis and Sartash, Inc. (collectively, " Leis" ) have brought this action against former business partners, Defendants William Davidson and Michael Leonetti (collectively, " Davidson" ). Leis's five-count Amended Complaint seeks damages, reasonable attorney's fees and costs, permanent equitable relief, and a preliminary injunction. Now before the court is Davidson's motion to dismiss Count I of the Amended Complaint, which alleges that Davidson violated the Lanham Act, 15 U.S.C. § 1125(a)(1). For the reasons that follow, the court concludes that Leis cannot state a claim under the Lanham Act, and so the motion to dismiss Count I is granted.

Given the time-sensitive nature of this case, its procedural history is slightly unusual and merits explanation. Davidson moved this court to dismiss the original complaint, arguing that Leis failed to state

Page 823

a federal claim, and that the court should decline to exercise supplemental jurisdiction over the state-law claims. This court partially granted the motion to dismiss, ruling that Leis's securities fraud claim under Securities and Exchange Commission Rule 10b-5 failed to meet the pleading requirements of Federal Rule of Civil Procedure 9(b). Leis re-pleaded the Rule 10b-5 claim, and the parties are now briefing a second motion to dismiss that claim.

Davidson also moved this court to stay the action under the Colorado River doctrine, because Davidson had already filed a suit against Leis in the Circuit Court of Cook County. After Leis filed his Amended Complaint, the court denied the motion to abstain without prejudice because the court was satisfied that the Rule 10b-5 claim (over which this court has exclusive jurisdiction) was sufficiently non-frivolous. The court set a hearing date on the motion for a preliminary injunction.

I. Background[1]

Leis is a professor of microbiology and immunology at the Northwestern University Feinberg School of Medicine (" Northwestern" ), where he researches the replication of retroviruses. According to his complaint, his research " culminated in a ground-breaking discovery that could lead to effective drug-based treatment for many virus infections." (Am. Compl. at ¶ 1, ECF No. 24.) Because Leis's research was conducted at Northwestern, Northwestern asserts ownership over the intellectual property and patents created from the research. Without permission from Northwestern, Leis alleges that he did not have " any right to exploit, commercialize, or otherwise offer for sale" his discovery. ( Id. at ¶ 18.)

In September 2010, Leis met Davidson at a neighborhood cocktail party. " Davidson held himself out . . . as an executive well-versed in start-up companies with connections to millions of dollars of financing for such ventures." ( Id. at ΒΆ 20.) From September to December 2010, Davidson and Leis had ongoing informal discussions about forming a business venture to commercialize Leis's research. Davidson introduced Leis to Michael Leonetti, who referred to himself as " Mike Smith" and represented that he was a successful pharmaceutical executive. During the fall of 2010, Leis repeatedly asked Davidson to ...


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