COMPLAINT FOR DAMAGES - 2
“monetize” the patents by selling licenses to the patents and suing those who allegedlyinfringe the patents.6. Mr. Elston worked at or with IVM for over four years. Up until September2010, he was Director of Acquisitions, i.e., in charge of acquiring patents, and managedIVM’s acquisitions team. During his tenure with IVM, Mr. Elston was personally responsiblefor leading and managing hundreds of patent acquisitions totaling hundreds of millions of dollars.7. In May 2010, Mr. Elston notified IVM leadership that he intended to leave hisrole because of concerns involving internal controls for “IP for Currency” transactions andother acquisitions issues. At the request of IVM executives, in particular IV’s President, andin reliance on the commitments made and terms negotiated at that time, including IVM’s rightof first refusal on deals Mr. Elston sourced, Mr. Elston agreed to stay on first as an employeeand later as a consultant pursuant to a Consulting Services Agreement (“CSA”).8. The CSA provided that Mr. Elston would source patents for acquisition byIVM, and “manage
transactions full cycle, from initial patent qualification to funding,providing services beyond the typical ‘finder’ relationship.” It also established a formula bywhich he would be paid for his transactions.9. Although leads on potential acquisitions and acquisitions in progress (the “dealqueue”) were Mr. Elston’s transactions, IVM continued to have a right of first refusal on anydeals sourced by Mr. Elston.
B. Shooting the Messenger
10. This lawsuit is the result of multiple events arising after Mr. Elston’s transitionto consultant under the CSA. These events included a major transaction internally namedProject Casablanca involving the appropriation of tens of millions of dollars in IVMinvestment funds. When he learned of the circumstances surrounding Project Casablanca, Mr.Elston emailed his concerns to the President of IVM directly, explaining in detail why he