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Case: 1:13-cv-04005 Document #: 6 Filed: 07/08/13 Page 1 of 30 PageID #:40

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION SANDRA GIUFFRE, Plaintiff, v. GERALD JENKINS, an individual, and GOLDBERG KOHN Ltd., a corporation ) ) ) ) ) ) ) )

DEFENDANTS’ ANSWER AND AFFIRMATIVE DEFENSES Defendants, Gerald Jenkins and Goldberg Kohn Ltd. (“GK”), by their undersigned attorneys, hereby respond to the complaint of plaintiff, Sandra Giuffre, as follows: ANSWER TO COMPLAINT Allegations of Complaint 1: Plaintiff Sandra Giuffre (“Giuffre”) is an individual residing in Wilton, Connecticut. She was a member of Giuffre Associates, LLC (“Giuffre Associates”), a now dissolved Connecticut limited liability company which was formerly engaged in the business of developing financial risk transfer solutions (e.g. swaps, hedges, etc.) for use by private and publically [sic] traded companies. As more fully described below, Giuffre Associates’ business was destroyed and then dissolved as a direct result of the legal malpractice of Trzyna. On the advice of Trzyna, Gerald Jenkins and Goldberg Kohn, Ltd. was [sic] retained as opposed to other different legal counsel Giuffre was considering to assist Giuffre in remedying the legal challenges facing Giuffre Associates, which, unbeknownst to Giuffre at the time, were caused by numerous actionable errors and omissions by Trzyna. Unfortunately, Jenkins failed to disclose that he had a conflict of interest in that he represented Trzyna personally in other matters and was a close personal friend of Trzyna. As a result of the conflict, Jenkins was adverse to Giuffre. Further, as direct result of his conflict of interest, Jenkins concealed the legal malpractice of Trzyna and failed to provide reasonable and appropriate legal advice to correct and/or mitigate Trzyna’s various errors and omissions. Indeed, the implication raised by the unusual facts and circumstances of this case suggest that the reason Trzyna recommended that Jenkins was retained was that he wanted a compliant business attorney to assist in covering-up his prior errors and omissions. Response: Defendants admit that Sandra Giuffre is an individual. Defendants lack

knowledge or information sufficient to form a belief as to the truth of the allegations that: Sandra Giuffre currently resides in Wilton, Connecticut; Giuffre Associates has been dissolved; on the advice of Trzyna, Gerald Jenkins and Goldberg Kohn, Ltd. were retained as opposed to other

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different legal counsel Giuffre was considering to assist Giuffre in remedying the legal challenges facing Giuffre Associates; and, the allegations contained in Paragraph 1 regarding the conduct of Mr. Trzyna. Defendants deny the remaining allegations contained in Paragraph 1. Allegations of Complaint 2: Defendant Gerald Jenkins is a citizen of the State of Illinois. He is licensed to practice law in the State of Illinois. At all relevant times, Jenkins was a principal of Goldberg Kohn, Ltd. Response: Defendants admit the allegations contained in Paragraph 2. Defendant Goldberg Kohn, Ltd. [sic] is an Illinois

Allegations of Complaint 3: corporation. Response:

Answering the allegations contained in Paragraph 3, defendants deny that

defendant GK’s name is “Goldberg Kohn, Ltd.,” allege that defendant GK’s name is Goldberg Kohn Ltd., and admit that defendant GK is an Illinois professional service corporation. Allegations of Complaint 4: based upon diversity of citizenship. Response: This court has subject matter jurisdiction of this action

Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 4, in that defendants lack knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 5 regarding Sandra Giuffre’s current citizenship and the amount in controversy. Allegations of Complaint 5: There is complete diversity of citizenship between the parties as Giuffre is a citizen of Connecticut and Jenkins and Goldberg Kohn are citizens of Illinois. The amount in dispute exceeds $75,000 exclusive of interest and costs. See 28 U.S.C. Section 1332. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 5 regarding Sandra Giuffre’s current citizenship and the amount in controversy. Allegations of Complaint 6: Prior to her involvement with Giuffre Associates, Giuffre was senior executive in the insurance industry for Marsh, a multi-national insurance broker. Giuffre was, and is, an expert in what is known as risk transfer solutions, whereby one party transfers risk to another party, generally a third party risk taker (e.g. insurance, hedges, 2

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etc.). In particular, Giuffre had done extensive work on insurance risks, associated gaps in insurance coverage, and the development of more efficient risk transfer solutions (including incorporating the use of existing capital market structures (e.g. swaps, hedges, and other alterative and advanced structures, etc.)). Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 6. Allegations of Complaint 7: Among the risks Giuffre has expertise in is “longevity risk.” Longevity risk entails the potential risk associated with decreasing mortality and its effects on the numerous and various types of pensions, annuities, health care and other insurance policies and contracts. Longevity risk, along with inflation and interest rate risk, are considered significant and inherent risks that can impact businesses (such as a corporation with a pension). Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 7. Allegations of Complaint 8: Sandra Giuffre, along with her fellow inventors, Richard Nichol (“Nichol”) and Sanjay Sathe (“Sathe”) (collectively referred to as the “Original Inventors”) developed what they believed was a novel and original methodology and computerized process to transfer longevity risk from a protection buyer to a third party risk taker using a swap structure in 2005. The invention was called “ALERTS™” (i.e. Advanced Life Expectancy Risk Transfer Solution). Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 8. Allegations of Complaint 9: The ALERTS™ methodology was principally and originally conceptualized by Giuffre and utilized her many years of business experience in the insurance industry and with developing risk transfer solutions. Nichols and Sathe each made significant contributions to ALERTS™, with Nichols bringing decades of Wall Street experience in hedging transactions and Sathe bringing decades of experience in the structuring, and mathematical and computer processing, of hedging strategies and swaps. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 9. Allegations of Complaint 10: At that time, risk swapping (for longevity risk and other insurance industry type risks) was not used in the insurance industry and Giuffre and the other Original Inventors desired to protect their novel and valuable idea and methodology. Today the process has become more common and is referred to in the industry as ‘‘fixed for floating” or “longevity swap”. 3

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Response:

Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 10. Allegations of Complaint 11: On or about the end of 2005 and early 2006, The Original Inventors approached Peter Trzyna, an attorney, in their individual and natural person capacities as inventors seeking advice on the best and most appropriate means to protect their ideas and methodology and keep it secret and under their exclusive control. Trzyna advised that they seek patent protection and that they use a patent holding company to hold the patent application and rights. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 11. Allegations of Complaint 12: ALERTS™, and its methodologies, computerized processes and potential applications for its use, were secret and not known to the public or to members of the insurance industry. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 12. Allegations of Complaint 13: Relying on the advice of Trzyna, and communicating with him directly, the Original Inventors and Original Members came to the understanding and agreement that the ALERTS™ patent rights would be owned by a jointly owned company as there were 3 inventors. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 13. Allegations of Complaint 14: Relying on the advice and at the suggestion of Trzyna, the Original Inventors used Giuffre Associates so that it could hold the patent application and any issued patent on behalf of the Original Inventors as a collective, facilitate the commercialization of ALERTS™ invention by accepting risk capital or equity investments to fund additional development and operations, to create and fund a risk-taking counterparty to participate in the underlying transactions, generate revenues as a licensor to the counterparty to the transactions, to provide a vehicle for the pro rata sharing revenue between the Original Inventors, and to provide a holding company vehicle to pay an investment return to any future investors. Giuffre, along with co-inventors Nichol and Sathe, were the sole original members of Giuffre Associates (collectively referred to as the “Original Members”).

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Response:

Defendants admit that Giuffre, along with Nichol and Sathe, were original

members of Giuffre Associates, and defendants lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 14. Allegations of Complaint 15: On February 6, 2006, Giuffre Associates entered into an engagement agreement with Trzyna to perform legal services. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 15. Allegations of Complaint 16: The Original Inventors named the company Giuffre Associates in recognition of Giuffre’s leading role in the invention and the formation of the business. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 16. Allegations of Complaint 17: After forming Giuffre Associates in January 2006, and filing the first ALERTS™ patent application in February 2006, the Original Inventors and newly formed Giuffre Associates continued to consult with Trzyna regarding the patent protection of ALERTS™ and their efforts to commercialize ALERTS™ through Giuffre Associates. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 17. Allegations of Complaint 18: Being advised by Trzyna that there were no other patents pending related to longevity risk swapping and upon Trzyna’s recommendation to file a patent, the Original Inventors and Giuffre Associates authorized Trzyna to enter his appearance on their behalf before the USPTO and file the necessary patent applications. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 18. Allegations of Complaint 19: In February 2006, Trzyna prepared and filed a provisional patent application on behalf of the Original Inventors and Giuffre Associates (the “2006 Patent Application”). The 2006 Patent Application on its face names only the Original Inventors as applicants, not Giuffre Associates. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 19. 5

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Allegations of Complaint 20: Trzyna did not prepare, file or record an assignment of the patent rights for the 2006 Patent Application, to Giuffre Associates as was necessary and as reasonable care would require. Response: Answering the allegations contained in Paragraph 20, defendant Jenkins

states that at or about the time defendant GK was engaged to represent Pilot House, Mr. Jenkins became aware that no written assignment of patent rights to Giuffre Associates had been executed by all of the so-called “Original Inventors,” and defendants lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 20. Allegations of Complaint 21: Trzyna breached his duty of care to Giuffre Associates and the Original Inventors of ALERTS™ by failing to prepare, file and record a patent assignment in timely manner. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 21. Allegations of Complaint 22: Prior to February 2006, relying on the advice of Trzyna and with his full knowledge, the members of Giuffre Associates previously understood and agreed that any rights to the 2006 Patent Application would be held by Giuffre Associates, not the individual members or inventors of the technology. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 22. Allegations of Complaint 23: Although there are numerous ways that patent attorneys structure the holding of patents depending on the particular circumstances, including simply maintaining ownership in the inventor or inventors, it is common for patent attorneys to advise individual inventors to assign their rights in a patent or pending patent to a corporate entity in exchange for an equity interest in the entity. These investment vehicles are commonly known as patent holding companies. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 23. Allegations of Complaint 24: Patent attorneys typically recommend assigning the patent application to a patent holding company when there is more than one inventor because absent the assignment the inventors, the named inventors as a matter of law jointly own the 6

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patent rights and can use or license the patent freely without seeking the consent of the other coinventor(s), including licensing the patent to competitors or simply competing directly with them. Since the inventors many times have a falling out, as is the case here, an assignment prevents a disgruntled inventor from taking the patent rights with him. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 24. Allegations of Complaint 25: Patent holding companies, whether formed as corporations or limited liability companies (“LLC’s”), are common vehicles to seek funding to finance the patent application process and business, invest in further development of the technology, and invest in the commercialization of the issued patent. These corporate vehicles are also used as a means to divide up resulting profits among the inventors based on their agreement as to contributions to the invention or the business, and as a vehicle to pay investors in the patent holding company. Given these considerations, patent holding companies are many times are better positioned to maximize the profitability of a patent or pending patent and to protect the patent or pending patent from infringers. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 25. Allegations of Complaint 26: The individual inventors benefit from the assignment by receiving an equity interest in the profitable entity and a pro rata share in the profits. In this case, Giuffre received the 50% of the equity in Giuffre Associates, while Nichol and Sathe each held minority 25% interests. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 26. Allegations of Complaint 27: Failure to assign the patent to the patent holding entity can (a) lead to confusion, (b) lead to litigation between and among the inventors and the entity created to maximize the profitability of the patent or pending patent and (c) lead to the inability to commercially harness the patent rights, all of which unfortunately came to pass in this instance. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 27. Allegations of Complaint 28: Notwithstanding his prior advice and understanding that Giuffre Associates was to act as the patent holding company and would own the patent rights to ALERTS™, Trzyna failed to undertake the necessary steps to have the inventor’s joint ownership rights in the Patent Applications assigned to Giuffre Associates and recorded with the 7

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USPTO-Assignment Recordation Branch in compliance with the simple steps outlined in 37 CFR Sec. 3. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 28. Allegations of Complaint 29: Furthermore, Trzyna did not advise Giuffre Associates or its Original Members that it was necessary for them to assign their rights in the Patent Applications to Giuffre Associates, to execute an assignment agreement (prepared typically by the patent attorney), or that he needed to record the assignment agreement with the USPTO in order to effectuate their agreement. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 29. Allegations of Complaint 30: At all pertinent times, Trzyna knew that Giuffre Associates was to own the Patent Applications and patent rights but yet he failed to advise them of (a) the need for the inventors to assign (and if not assigned, the Patent Applications would be jointly owned by the inventors); or (b) of the adverse legal consequences of filing the Patent Applications with three, and later four, individual inventors without an assignment from all of the inventors. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 30. Allegations of Complaint 31: At all pertinent times, Trzyna misled the Original Inventors and Giuffre Associates and its members (as well as Vermont legal counsel in the later Vermont litigation and investor representatives) into believing that the Patent Applications were in fact owned by Giuffre Associates not the listed inventors. Trzyna did not timely advise the Original Inventors or Giuffre Associates that an assignment signed by Original Inventors or the four inventors listed on the 2007 Patent Application, and subsequent recording of the assignment agreement, was required to vest exclusive ownership in Giuffre Associates. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 31. Allegations of Complaint 32: On or about early February of 2007, Sathe, one of the Original Members of Giuffre Associates, advised Giuffre and Nichol that he intended to cease working with Giuffre Associates. Trzyna was promptly apprised of this fact and was well aware of it well before the filing of the 2007 Utility Patent Application.

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Response:

Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 32, except that defendants admit that Sathe ceased working with Giuffre Associates. Allegations of Complaint 33: After Sathe left the company, Trzyna belatedly provided all of the inventors, including Sathe, with forms to assign their rights under the Patent Applications to Giuffre Associates. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 33. Allegations of Complaint 34: Trzyna belatedly realized his mistake in failing to have the patents rights assigned to Giuffre Associates and attempted to surreptitiously correct it without disclosing to any of the Original Inventors or Giuffre Associates of his mistake and it legal ramifications. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 34. Allegations of Complaint 35: Unfortunately, at that point Sathe refused to sign the untimely assignment legal form prepared and sent to him by Trzyna. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 35. Allegations of Complaint 36: However, the Original Members continued to be misled by Trzyna and were led to believe that the Patent Applications and rights were still entirely owned by Giuffre Associates, and made decisions in reliance on that mistaken belief, as they did not understand and were not timely advised by Trzyna that if the Patent Applications were not assigned to the corporation, and recorded with the USPTO, the patent application was in fact jointly owned by the individual listed inventors. Further, Trzyna never explained the legal significance of joint ownership and his error in obtaining the assignments and instead chose to mislead the inventors and conceal his error. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 36. Allegations of Complaint 37: Trzyna breached his duty of care and fiduciary duty to Giuffre Associates and the inventors of ALERTS™ by failing to properly assign the patent rights, by failing to timely advise them that the Original Inventors (including Sathe) still jointly 9

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owned the Patent Applications individually, by failing to disclose his errors and omissions, and by failing to explain the legal significance of joint ownership and his errors. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 37. Allegations of Complaint 38: On or around March 2007, as a result of Sathe’s departure from the business and claims to ownership of ALERTS™, Giuffre and Nichol advised Trzyna that they were actively looking for local Connecticut business law counsel to advise them with respect to the dispute with Sathe and to advise them generally with respect to their and Giuffre Associate’s business law matters. Trzyna strongly recommended that Giuffre and Nichol retain Gerald Jenkins, Esq. (“Jenkins”), a Chicago-based corporate and tax attorney, who he claimed had great expertise in handling complex business disputes and business law matters generally. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 38. Allegations of Complaint 39: Jenkins’ role was to assist Giuffre and Nichol in responding to and resolving the dispute with Sathe, in handling general corporate and intellectual property matters for Giuffre and Nichol, and how to move the business itself forward in contentious environment where the parties were in conflict over a key intellectual property asset. Response: Defendants deny the allegations contained in Paragraph 39.

Allegations of Complaint 40: Jenkins and Goldberg Kohn, for unreasonable, specious and for self-serving purposes, instructed Giuffre and Nichol to set up another entity, Pilothouse Capital, LLC (“Pilothouse”) solely for the purposes of signing the May 31, 2007 engagement letter, a copy of which is attached as Exhibit A. Response: Defendants deny the allegations contained in Paragraph 40.

Allegations of Complaint 41: Pilothouse had no business of its own and no assets. It had no bank account and no business plan. The sole purpose of its existence was to facilitate Jenkins’ representation of third party beneficiaries Giuffre and Nichol. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 41. Allegations of Complaint 42: Giuffre was at all times well known to Jenkins and, along with Nichol, was the intended third-party beneficiary of Jenkins’s representation.

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Response:

Defendants admit that Mr. Jenkins knew Sandra Giuffre, and defendants

deny the remaining allegations contained in Paragraph 42. Allegations of Complaint 43: Jenkins and Goldberg Kohn knew and intended their legal services and advice to personally benefit Giuffre even though she was not individually under contract to be liable for his legal fees, not merely Pilothouse. Response: Defendants deny the allegations contained in Paragraph 43.

Allegations of Complaint 44: Accordingly, at all pertinent times Jenkins and Goldberg Kohn owed Giuffre a legal duty of reasonable care as well as a fiduciary duty. Response: Defendants deny the allegations contained in Paragraph 44.

Allegations of Complaint 45: At all relevant times, the primary purpose of Jenkins’ representation of Pilothouse was to benefit known third parties, specifically, Giuffre, since Pilothouse had no involvement with or protectable legal rights or interests in Giuffre Associates, the intellectual property, or the dispute with Sathe, and in fact at all pertinent times Pilothouse had no assets, rights or protectable legal interests whatsoever. Response: Defendants deny the allegations contained in Paragraph 45.

Allegations of Complaint 46: At all relevant times, Jenkins and Goldberg Kohn treated Nichol and Giuffre as clients. He did not timely represent or inform them that his treating them as individually represented clients while also representing Pilothouse presented a conflict or could be adverse. Response: Paragraph 46. Defendants deny the allegations contained in the first sentence of

Defendants deny the implications contained in the second sentence that

defendants represented Nichol and Giuffre individually, that they otherwise were ever clients of defendants, and that defendants had an ethical conflict arising from defendants’ representation of Pilot House. Defendants deny any remaining allegations contained in Paragraph 46. Allegations of Complaint 47: On or about May 2007, Giuffre Associates transitioned to a single manager-managed LLC with GA Capital LLC (“GA Capital”) being named the manager on the advice Trzyna’s co-counsel, defendant, Gerald Jenkins, Esq. and in response to Sathe’s departure. Response: Defendants deny the allegations contained in Paragraph 47, including the

implication therein that Mr. Trzyna was the “co-counsel” of defendant Jenkins, except that 11

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defendants lack knowledge or information sufficient to form a belief as to the truth of the allegations that “[o]n or about May 2007, Giuffre Associates transitioned to a single managermanaged LLC with GA Capital LLC (“GA Capital”) being named the manager.” Allegations of Complaint 48: In December 2007, Sathe filed suit in the state of Vermont against Giuffre Associates, Giuffre, Nichol, and GA Capital, in an effort to take control and ownership of the Patent Applications (the “Vermont Litigation”). Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 48, except that defendants admit that Sathe filed suit in the State of Vermont against Giuffre Associates, Giuffre, Nichol, and GA Capital. Allegations of Complaint 49: Sathe’s suit was based upon the mistaken belief (based on Trzyna’s erroneous advice and assertions, and Jenkins’ ratification and failure to correct those erroneous assertions and advice) that Giuffre Associates exclusively owned the rights to the Patent Applications and Sathe was attempting to gain control over his share of the rights. Sathe’s suit would not have been necessary and would have been more quickly resolved if Jenkins had disclosed that the Patent Application was not assigned to Giuffre Associates by Trzyna as it should have been and that Sathe in fact retained his joint ownership right to the Patent Application when he left Giuffre Associates because he was listed as an inventor on the Patent Application and had not assigned his rights. Furthermore, Trzyna and Jenkins both incorrectly advised Nichol and Giuffre that they personally had a fiduciary obligation to protect Giuffre Associates’ purported sole and exclusive ownership of the patent application against Sathe, and that this legal duty compelled them to expend substantial personal funds for legal fees in the litigation. Response: Defendants deny the allegations contained in Paragraph 49 in so far as

they pertain to defendant Jenkins, including the implications contained in Paragraph 49 that defendant Jenkins: ratified erroneous advice and assertions by Mr. Trzyna; had a duty to correct erroneous advice and assertions by Mr. Trzyna; failed to disclose that which defendant Jenkins should have disclosed; and that defendant Jenkins provided incorrect legal advice to anyone. Defendants lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 49.

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Allegations of Complaint 50: Although Giuffre Associates obtained Vermont counsel, Jenkins was intimately involved in the litigation and in large part directed the activities of Vermont counsel. Response: Defendants deny the allegations contained in Paragraph 50, except that

defendants admit that Giuffre Associates obtained Vermont counsel. Allegations of Complaint 51: Shortly after he joined the representation Jenkins became aware that his co-counsel Trzyna had failed to properly assign the patent to Giuffre Associates and that Trzyna had concealed that error and omission from Giuffre. Response: Defendants admit that at or about the time defendant GK was engaged to

represent Pilot House, Mr. Jenkins became aware that no written assignment of patent rights to Giuffre Associates had been executed by all of the so-called “Original Inventors,” and defendants deny the remaining allegations contained in Paragraph 51 insofar as they relate to defendant Jenkins, including the implication therein that Mr. Trzyna was the “co-counsel” of defendant Jenkins. Defendants lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 51. Allegations of Complaint 52: Jenkins had a duty to Giuffre and to promptly disclose the error of his co-counsel, but he failed to do so. Response: Defendants deny the allegations contained in Paragraph 52, including the

implication therein that Mr. Trzyna was the “co-counsel” of defendant Jenkins. Allegations of Complaint 53: Jenkins also had a duty to Giuffre to disclose that he was a close personal friend and Trzyna’s personal lawyer in other legal matters, but he failed to do so. Response: Defendants deny the allegations contained in Paragraph 53.

Allegations of Complaint 54: Jenkins representation of Trzyna at the same time he represented Giuffre was a conflict of interest that could never be reconciled because Trzyna and Giuffre’s interests were in direct conflict. Response: Defendants deny the allegations contained in Paragraph 54, including the

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Allegations of Complaint 55: of duty of Trzyna. Response:

Jenkins took steps to conceal the negligence and breach

Defendants deny the allegations contained in Paragraph 55.

Allegations of Complaint 56: As a result, the negligence of Trzyna and, later, Jenkins, was not discovered until many years later. Response: Defendants deny the allegations contained in Paragraph 56, including the

implication therein that defendant Jenkins was negligent, except that defendants lack knowledge or information sufficient to form a belief as to the truth of the allegations concerning the conduct of Mr. Trzyna. Allegations of Complaint 57: Despite the fact that his error in not having the patent rights assigned had now resulted in contentious and destructive litigation between the Original Inventors and Sathe over ownership rights, Trzyna, with Jenkins’ assistance and complicity, still did not disclose his error and Trzyna and Jenkins continued to conceal and mislead the parties and the their local Vermont attorneys with respect to this critical information. To the contrary, with the full knowledge of Jenkins, Trzyna explicitly (and incorrectly) advised Giuffre, Nichol and their local Vermont counsel that the patent application was in fact exclusively owned by Giuffre Associates. Response: Defendants deny the allegations contained in Paragraph 57, including the

implications contained in Paragraph 57: (i) that defendant Jenkins assisted or was complicit in any error, failure to disclose, or misrepresentation by Mr. Trzyna; (ii) that defendant Jenkins knew that Mr. Trzyna explicitly provided incorrect advice to Giuffre, Nichol and their local Vermont counsel; and, (iii) that defendant Jenkins “concealed” “critical information” from someone, or “mislead” someone with respect to any “critical information.” Allegations of Complaint 58: In addition, well after the litigation was filed, Trzyna represented to the Original Inventors, Giuffre Associates, its members, and the parties and attorneys involved in the Vermont Litigation that the Patent Applications would be deemed “abandoned” at midnight on May 27, 2008. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 58.

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Allegations of Complaint 59: Trzyna continued this pattern of manipulation and false and misleading information by repeatedly stating and confirming to Giuffre, Nichol, Giuffre Associates and their local legal counsel in the Vermont Litigation during the drafting of the final settlement documents that he had checked the USPTO docket on the 2007 Utility Patent Application and that the it had indeed gone abandoned as he had earlier stated it would. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 59. Allegations of Complaint 60: This information was false and Trzyna knew it was false at the time he disseminated it. Jenkins also knew or should have known that this information was false, but he failed to reasonably investigate and correct these false statements. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in the first sentence of Paragraph 60, and defendants deny the allegations contained the second sentence of Paragraph 60. Allegations of Complaint 61: Giuffre and Giuffre Associates did not discover that the 2007 Utility Patent Application had not gone abandoned as represented by Trzyna until well after the litigation with Sathe was settled in October 2008, after Giuffre Associates was dissolved and well after Trzyna filed yet another unnecessary and ill-advised patent application containing more of Giuffre’s own valuable personal intellectual property. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 61. Allegations of Complaint 62: Jenkins breached the standard of care and his duty of candor by either failing to determine the status of the 2007 Utility Patent Application and failing to properly and timely disclose the status of the 2007 Utility Patent Application to Giuffre, Giuffre Associates, its members and each of the inventors of ALERTS™; and by continuing to fail to disclose and actively conceal Trzyna’s error in not having the patent rights timely assigned, and advising Giuffre to take actions that were intended to conceal and cover-up Trzyna’s errors and omissions. Response: Defendants deny the allegations contained in Paragraph 62, including the

implication therein that defendant Jenkins owed such duties to the plaintiff, except defendants lack knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 61 with respect to Mr. Trzyna’s “error(s) and omissions.”

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Allegations of Complaint 63: These numerous and repeated misstatements by Trzyna regarding the impending abandonment of the 2007 Utility Patent Application were used by Trzyna to create a false sense of urgency and to improperly advise and manipulate Giuffre into filing a continuation-in-part (“CIP”) patent application listing her as the sole inventor improving upon the Patent Applications (the “2008 CIP”). Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 63. Allegations of Complaint 64: As part of his litigation strategy, in 2008 Trzyna advised Giuffre to file a Continuation-in-Part (“CIP”) patent which added more of Giuffre’s valuable personal intellectual property, ideas and methods of commercialization to the invention described in the Patent Applications. Trzyna assured Giuffre that the 2008 CIP would not be considered an asset of Giuffre Associates and was legally necessary and appropriate. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 64. Allegations of Complaint 65: In May 2008, Trzyna signed and filed the 2008 CIP with the USPTO containing Giuffre’s new and valuable personal content. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 65. Allegations of Complaint 66: Giuffre was listed as the sole inventor on the 2008 CIP on the advice and the assurances of Trzyna that this was legal, appropriate and indeed necessary. This advice and the appropriateness of listing Giuffre as the sole inventor on the 2008 CIP was later ratified by Jenkins. Response: Defendants deny the allegations contained in Paragraph 66 that defendant

Jenkins “ratified” alleged “advice and assurances” of Mr. Trzyna, and the alleged “appropriateness of listing Giuffre as the sole inventor on the 2008 CIP,” and defendants lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 66. Allegations of Complaint 67: Jon Cole, also a resident of Connecticut and an information systems executive employed by D.W. Van Dyke & Co. Inc., was under the control of Donald W. Van Dyke, the fourth inventor Trzyna improperly recommended should be added as a fourth inventor of ALERTS™. 16

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Response:

Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 67. Allegations of Complaint 68: On or about August 14, 2008, on the advice and recommendation of attorneys Trzyna and Jenkins, and in anticipation of the settlement of the Vermont litigation and the dissolution of Giuffre Associates, GA Capital appointed Jon Cole as the new manager giving him effective management control of Giuffre Associates. Response: Defendants deny the allegations contained in Paragraph 68 insofar as they

pertain to defendant Jenkins, and defendants lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 68. Allegations of Complaint 69: On or about October 3, 2008, the Vermont litigation filed by Sathe was settled and the settlement agreements prepared by attorneys Trzyna and Jenkins were signed. Response: Defendants admit that the Vermont litigation was settled, and that

defendant Jenkins participated in the preparation of certain documents in connection with the settlement of the Vermont litigation. Defendants deny that “the settlement agreements [were] prepared by . . . Jenkins,” and defendants lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 69. Allegations of Complaint 70: At that time, Giuffre and Giuffre Associates (and all current and former members of Giuffre Associates) still believed that the 2007 Patent Application had been abandoned as has been represented by Trzyna. In breach of his duties, Jenkins failed to investigate whether the 2007 Patent Application had been abandoned. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in the first sentence of Paragraph 70. Defendants deny the allegations contained in the second sentence of Paragraph 70, including the implication therein that defendant Jenkins had a duty “to investigate whether the 2007 Patent Application had been abandoned.” Allegations of Complaint 71: Jenkins breached the standard of care and his duty of candor and loyalty by either failing to determine the status of the 2007 Patent Application and/or failing to appropriately disclose the status of the 2007 Patent Application. 17

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Response:

Defendants deny the allegations contained in Paragraph 71, including the

implication therein that defendant Jenkins owed such duties to the plaintiff. Allegations of Complaint 72: following terms: The Vermont Litigation settlement included the

a. Still believing that Giuffre Associates owned the Patent Applications and that the Patent Applications had gone abandoned, Giuffre, all Original Members, all Original Inventors, as well as Giuffre Associates and a number of other business entities that were named in the litigation (“Named Parties”), signed a “Joint Ownership Agreement” wherein all of the Named Parties (including Giuffre and Original Inventors) agreed that all Named Parties, including Plaintiff Giuffre; would have individual joint ownership rights to the technology (including ALERTS™ and the Patent Applications); b. On the advice and recommendation of attorneys Trzyna and Jenkins, Giuffre Associates, Nichol and Giuffre agreed to the settlement and signed the unnecessary and misleading “Joint Ownership Agreement” prepared by Trzyna and Jenkins, which not only did not materially change the Original Inventor’s ownership rights as they advised it did, it served to further conceal Trzyna’s prior errors and omissions, and also unnecessarily disseminated ownership rights to the Patent Applications to even more parties (such as GA Capital, LLC and Cross Market Concepts, LLC); and c. On the advice and recommendation of attorneys Trzyna and Jenkins, Nichol and Giuffre withdrew as Members of Giuffre Associates and assigned their membership interests back to Giuffre Associates as part of the settlement; and d. On the advice and recommendation of attorneys Trzyna and Jenkins, D2 (coowned by Donald W. Van Dyke and Donald Drelich, both senior officers of D.W. Van Dyke & Co.,) was left as the sole member of Giuffre Associates. e. On the advice and recommendation of attorneys Trzyna and Jenkins, Jon Cole, an employee and officer of D.W. Van Dyke & Co., and under the direct control of Donald W. Van Dyke and Don Drelich, was installed as the manager of Giuffre Associates and tasked with the winding down of Giuffre Associates and managing any remaining assets. Response: The allegations contained in Paragraph 72 are unwieldy, complex,

compound, and not framed as required by Rule 8(d)(1) of the Federal Rules of Civil Procedure. Accordingly, Paragraph 72 should be stricken. To the extent that the allegations contained in Paragraph 72 contain well-pleaded allegations of fact relating to defendant Jenkins, defendants deny those allegations, except that defendants admit that defendant Jenkins participated in the preparation of the “Joint Ownership Agreement.” Defendants lack knowledge or information 18

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sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 72, including the allegations regarding what Giuffre Associates and others believed, or relied upon or were motivated by when agreeing to settle the Vermont Litigation. Allegations of Complaint 73: In conjunction with the execution of this settlement agreement, Jenkins also prepared an Assignment of Assets and Liabilities Agreement and a Clarification and Assignment of Interest Agreement (the “Assignment Agreements”). Jenkins advised Giuffre to execute these Assignment Agreements without advising Giuffre that she already owned the assets as a matter of law (not Giuffre Associates), and that there was in fact no legal rational for advising Giuffre to enter into such Assignment Agreements. Response: Defendants admit that defendant Jenkins participated in the preparation of

certain documents in connection with the settlement of the Vermont litigation, and defendants lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 73. Allegations of Complaint 74: Jenkins advised that these Assignment Agreements were reasonable, necessary and appropriate and recommended that Giuffre sign them, which she and the other members of Giuffre Associates did. These agreements were in fact not reasonable, necessary or appropriate and only served to conceal Trzyna’s prior errors and omissions. Response: Defendants deny the allegations contained in Paragraph. 74.

Allegations of Complaint 75: Now several years after the fact, Trzyna - Jenkins’ own co-counsel during the preparation and executing of the settlement and related agreements-- is alleging in current state court litigation that the Assignment Agreements prepared and recommended by Jenkins amount to a fraudulent transfer and open Giuffre up to increased personal liability. Giuffre has denied those fraudulent transfer claims, but nonetheless at a minimum will inevitably incur significant future legal expense as a result of Jenkins mishandling of the settlement with Sathe. Response: Defendants deny the allegations contained in Paragraph 75 that defendant

Jenkins mishandled a settlement with Sathe, deny the characterization in Paragraph 75 that Mr. Trzyna was the “co-counsel” of defendant Jenkins, and defendants lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 75.

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Allegations of Complaint 76: After the settlement was reached and after the Vermont Litigation was dismissed, Giuffre Associates was in fact dissolved on October 28, 2008. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 76. Allegations of Complaint 77: Trzyna and Jenkins were both intimately involved with the settlement, provided all pertinent information regarding the patent applications that was incorporated into the settlement agreement and Assignment Agreements, drafted portions of the settlement agreement governing patent rights, and, at the time of settlement in October of 2008, knew and had approved of the final terms of the settlement agreement and related Assignment Agreements. Response: Defendants admit that defendant Jenkins participated in the drafting of the

settlement agreement and Assignment Agreements in connection with the Vermont Litigation, and deny the remaining allegations contained in Paragraph 77 insofar as they pertain to defendant Jenkins. Allegations of Complaint 78: Trzyna and Jenkins advised all parties relying on the settlement documents (including Giuffre and Giuffre Associates’ Vermont Litigation counsel) that the 2007 patent application had gone abandoned in May 2008. Response: Defendants deny the allegations contained in Paragraph 78 insofar as they

pertain to defendant Jenkins, and lack of knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in in Paragraph 78. Allegations of Complaint 79: Trzyna and Jenkins breached the standard of care and the duty of candor and loyalty by failing to determine and timely disclose the status of the 2007 Patent Application. Response: Defendants deny the allegations contained in Paragraph 79 insofar as they

pertain to defendant Jenkins, and lack of knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in in Paragraph 79. Allegations of Complaint 80: Unbeknownst to Giuffre Associates, it members or Giuffre, the Patent Applications had not gone abandoned in 2008.

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Response:

Defendants lack of knowledge or information sufficient to form a belief as

to the truth of the allegations contained in in Paragraph 80. Allegations of Complaint 81: Jenkins failed to inform the Giuffre [sic] that the 2007 Patent Application had not been abandoned as Trzyna had repeatedly stated to Giuffre and her Vermont litigation counsel. Trzyna only advised Giuffre of this important fact well over a year later after critical decisions had already been made based on his and Jenkins erroneous representations regarding the abandonment of the 2007 Patent Application. Response: Defendants deny the allegations contained in Paragraph 81 that “Jenkins

[made] erroneous representations regarding the abandonment of the 2007 Patent Application.” Further answering the allegations contained in Paragraph 81, defendants deny the implication that defendant Jenkins had a duty “to inform the Giuffre [sic] that the 2007 Patent Application had not been abandoned,” and on that basis deny the allegation that defendant Jenkins “failed” to do so. Defendants lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in in Paragraph 81. Allegations of Complaint 82: Jenkins breached the standard of care and his fiduciary duty to Giuffre by failing to timely advise Giuffre of the true and accurate status of the 2007 Patent Application, by continuing to mislead and conceal from her Trzyna’s his failure to timely and properly assign the Patent Applications, by preparing and advising her to sign a settlement agreement with Sathe which was not in her best interest, by manipulating the members of Giuffre Associates into admitting it abandoned the Patent Applications (as it was believed that the Patent Applications had gone automatically abandoned in May 2008 due to the actions of Sathe), by preparing and advising her to sign the Assignment Agreements which have misled her and opened her up to personal liability claims, and by failing to timely advise Giuffre of the current joint ownership of the Patent Applications as a matter of law and its significance. Response: Defendants deny the allegations contained in Paragraph 82.

Allegations of Complaint 83: In retrospect, the settlement documents and the “Joint Ownership Agreement” drafted and approved by Jenkins served only to further conceal and obscure Trzyna’s earlier error in failing to have the Patent Applications timely assigned. Response: Defendants admit that defendant Jenkins participated in the preparation of

documents in connection with the settlement of the Vermont Litigation, and defendants deny the remaining allegations contained in Paragraph 83. 21

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Allegations of Complaint 84: On or about July 2009, well after the dissolution of Giuffre Associates, Trzyna and Jenkins approached Giuffre on their own volition and strongly advised Giuffre to file a new continuation-in-part patent application which would contain her latest trade secrets, innovations, commercial applications, and methodologies. Response: Defendants deny the allegations contained in Paragraph 84 insofar as they

pertain to defendant Jenkins, and defendants lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 84. Allegations of Complaint 85: Jenkins agreed to take the laboring oar in drafting the 2009 CIP patent application even though, unbeknownst to Giuffre, Jenkins was not licensed by the USPTO and was not qualified to undertake such technical patent work. As an inducement to move forward with the new CIP, Trzyna promised that neither he nor Jenkins would charge any legal fees for their services and that they would only ask that they be reimbursed their out-ofpocket USPTO filing fees. Response: Defendants admit that defendant Jenkins was not licensed by the USPTO,

and deny the remaining allegations contained in Paragraph 85 insofar as they pertain to defendant Jenkins. Defendants lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 85. Allegations of Complaint 86: Together Trzyna, Jenkins and Goldberg Kohn prepared and filed, and Trzyna signed, the 2009 CIP patent on behalf Giuffre and advised Giuffre that the 2009 CIP was legally appropriate and advisable. Response: Defendants: admit that defendant Jenkins participated in the preparation of

the 2009 CIP application, and deny the remaining allegations contained in Paragraph 86 insofar as they pertain to defendants Jenkins and GK. Defendants lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 86. Allegations of Complaint 87: Together Trzyna, Jenkins and Goldberg Kohn listed Giuffre as the sole inventor of the 2009 CIP patent, assuring her repeatedly that this was legal, necessary and appropriate, and that she was the sole owner of the 2009 CIP and the trade secrets it contained.

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Response:

Defendants deny the allegations contained in Paragraph 87 insofar as they

pertain to defendants Jenkins and GK, and defendants lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 87. Allegations of Complaint 88: As Trzyna’s personal attorney, Jenkins knew or should have known at all pertinent times that Trzyna was contemporaneously representing a competitor of Giuffre’s called Mann, Conroy, Eisenberg & Associates, LLC (“MCEA”) with respect to a substantially similar patent applications in the identical risk management field which posed yet another conflict of interest in Trzyna’s and Jenkins’ representation of Giuffre. Response: Defendants deny the allegations contained in Paragraph 88.

Allegations of Complaint 89: Jenkins knew or should have known that the competing MCEA patent applications could act as prior art to the Patent Applications and Giuffre’s 2009 CIP claims and thus both he and Trzyna were materially limited in their ability to pursue the full extent of patent rights that may have been available to Giuffre. Response: Defendants deny the allegations contained in Paragraph 89.

Allegations of Complaint 90: Jenkins knew or should have known that there was a substantial risk that Giuffre’s confidential trade secrets, innovations, applications and methodologies would be shared with Giuffre’s competitor MCEA given the clear nature of the conflict, Trzyna’s sensitive role as the shared repository of that valuable information, and the significant commercial value of the information. This substantial risk became an unfortunate reality when Trzyna in fact shared vital attorney client privileged and trade secret patent information with MCEA. Response: Defendants deny the allegations contained in the first sentence of

Paragraph 90, and lack knowledge or information sufficient to form a belief as to the truth of the allegations contained in the second sentence of Paragraph 90. Allegations of Complaint 91: Despite the existence of a clear conflict of interest on the part of both Jenkins and Trzyna, Jenkins never disclosed either his or Trzyna’s conflict of interest, never sought or obtained a waiver, and failed to advise Giuffre of both the risk of disclosure of confidential information as well as the fact that confidential information was actually improperly disclosed to a competitor. Response: Defendants deny the allegations and implications contained in Paragraph

91 that defendant Jenkins: had a conflict of interest; had a duty to disclose an alleged conflict of interest on the part of Mr. Trzyna; had a duty to obtain a waiver; and that he had a duty to advise 23

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“Giuffre of both the risk of disclosure of confidential information as well as the fact that confidential information was actually improperly disclosed to a competitor.” Defendants deny the remaining allegations contained in Paragraph 91 insofar as they relate to defendant Jenkins, and defendants lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 91. Allegations of Complaint 92: Giuffre looked to Trzyna, Jenkins and Goldberg Kohn together to provide appropriate advice concerning the best method of protecting her invention and keeping it confidential, secret and available for her use only. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 92, and allege that any such belief or expectation on the part of Giuffre with respect to defendants would have been unreasonable, as beyond the scope of defendants’ duties and responsibilities as counsel for Pilot House. Allegations of Complaint 93: Giuffre looked to Trzyna, Jenkins and Goldberg Kohn together to weigh all of the options and then inform her of the best and most appropriate method of protecting the intellectual property and keeping it secret. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 93, and allege that any such belief or expectation on the part of Giuffre with respect to defendants would have been unreasonable, as beyond the scope of defendants’ duties and responsibilities as counsel for Pilot House.. Allegations of Complaint 94: Jenkins knew that the invention described in the 2009 CIP was a methodology of transferring longevity risk from one party to another party through use of a swap, ultimately utilizing standard desk top computers and off-the-shelf software to make the calculations. Response: Defendants allege that Mr. Jenkins does not recall what he knew regarding

“the invention described in the 2009 CIP” at particular points in time, and therefore defendants deny the allegations contained in Paragraph 94 on that basis.

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Allegations of Complaint 95: Generally, abstract and non-tangible business and hedging methods such as this that merely utilize standard computer software to effectuate the process are not patentable subject matter. Response: Defendants lack knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 95. Allegations of Complaint 96: Jenkins knew or should have known, and should have explained to Giuffre, that there was a substantial risk that (a) the patent application would be denied or greatly limited in scope, (b) that it was unlikely that any issued patent could be enforced in a court of law, (c) that competitors could easily and readily avoid actionable infringement in numerous ways, (d) that identifying infringers would be nearly impossible, and (e) that pursuing any infringement litigation in the future would be prohibitively expensive and unlikely to be pursued in any event because Giuffre would be suing large insurance and financial institutions that were her clients and/or prospective clients and investors in her business and its transactions. Response: Defendants deny the allegations contained in Paragraph 96.

Allegations of Complaint 97: Jenkins knew or should have known, and should have advised Giuffre that pursing a public patent application was not appropriate and not in her best interests under these circumstances, and that more appropriate legal course of action which would better protect their legal and business interests was to treat the methodology as a trade secret and maintain its confidentiality under the nation’s numerous trade secret statutes and laws. Response: Defendants deny the allegations contained in Paragraph 97.

Allegations of Complaint 98: Jenkins knew or should have known, and should have explained in detail to Giuffre, that she had a far less costly and risky option to protect her invention through the use of confidentiality agreements, internal and external security measures, and reliance on the nation’s numerous trade secret statutes and laws, rather than filing of a patent applications which would eventually become public and explained in detail to her competitors her invention, the possible uses of the invention, and the subsequent improvements to the invention. Response: Defendants deny the allegations contained in Paragraph 98.

Allegations of Complaint 99: Had Giuffre known and understood the risks associated with the actual issuance of a public patent, understood that the 2009 CIP could be denied or substantially limited in effect, that any patent actually issued would likely be invalid and/or unenforceable, that there were other less costly and more appropriate methods of protecting the intellectual property, and that the MCEA patents would in any event be deemed prior art and have patent priority, she would not have authorized either Trzyna or Jenkins to file the 2009 CIP.

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Response:

Defendants deny the implications contained in Paragraph 99 that

defendant Jenkins was “authorized . . . to file the 2009 CIP,” and that defendant Jenkins “file[d] the 2009 CIP.” Defendants lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 99. Allegations of Complaint 100: Had Giuffre been advised, known and understood that the 2009 CIP patent application would be denied or substantially limited in effect, that the MCEA patents would be deemed prior art and have patent priority, were likely to be invalid and/or unenforceable and that there were other less costly and more appropriate methods of protecting the intellectual property, she would not have authorized Jenkins to prepare and Trzyna to file those patent applications in the first instance. Response: Defendants deny the implications contained in Paragraph 100 that

defendant Jenkins was “authorized . . . to prepare” the 2009 CIP patent application, and that defendant Jenkins prepared any “patent applications.” Defendants lack knowledge or

information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 100. Allegations of Complaint 101: Jenkins breached the standard of care by (a) failing to challenge and remedy Trzyna’s prior self-serving and negligent advice that Giuffre pursue his ill-advised patenting strategy rather then protecting this information as a trade secret; (b) advising Giuffre to file the 2009 CIP patent application in the first instance since this patent application had a substantial risk of being denied or limited to point of being ineffectual; (c) failing to advise Giuffre that the 2009 CIP contained unpatentable subject matter and was as a legal and practical matter likely invalid and/or enforceable, (d) failing to advise Giuffre of the alternative and more appropriate and less costly methods of protecting the intellectual property, and (e) by failing to timely inform her of existence and significance of the competing MCEA patent applications, Trzyna’s conflict in representing Giuffre and MCEA simultaneously, his conflict of interest in representing Trzyna and Giuffre simultaneously and the ramifications of these numerous and various conflicts, and (f) failing to disclose that the MCEA patents would be deemed prior art and have patent priority due to their priority date. Response: Defendants deny the allegations contained in Paragraph 101, including the

implications contained therein that defendant Jenkins owed the plaintiff duties to do that which Paragraph 101 alleges defendant Jenkins “failed” to do; and defendants lack knowledge or

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information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 101. Allegations of Complaint 102: Ultimately, all of the patent applications in which Sandra Giuffre was listed as an inventor went abandoned, including the 2009 CIP, because of various errors and omissions of Trzyna and Jenkins, and Giuffre derived no economic benefit from these patent applications. Response: Defendants deny the allegations contained in Paragraph 102 insofar as

they relate to defendant Jenkins, and defendants lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 102. Allegations of Complaint 103: Rather then benefitting from this ill-advised series of patent applications, Giuffre has to the contrary incurred only significant legal expense and economic losses arising from the loss of her business, loss of control over a great deal of her personal intellectual property and the loss of the value her innovations, ideas, and inventions, all due to Trzyna’s and Jenkins’ misguided patent prosecution strategy and mishandling of her legal affairs. Response: Defendants deny the allegations contained in Paragraph 103 insofar as

they relate to defendant Jenkins, and defendants lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 103. Allegations of Complaint 104: As a result of the errors and omissions of Jenkins and Trzyna, which directly resulted in the Vermont Litigation, Giuffre lost the value of her invention, Giuffre and Giuffre Associates lost business and expended significant sums of money in legal fees and expenses, which damages would have been avoided or mitigated if Trzyna had timely filed and recorded the necessary patent assignment agreement and/or Jenkins has simply disclosed, rather than concealed, Trzyna’s error in not having the patent applications assigned. Response: Defendants deny the allegations contained in Paragraph 104 insofar as

they relate to defendant Jenkins, and defendants lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations contained in Paragraph 104. COUNT I LEGAL MALPRACTICE Allegations of Complaint 105: Plaintiff realleges and incorporates paragraphs 1-104 as if fully set forth herein. 27

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Response:

Defendants reallege and incorporate herein by reference their responses to

the allegations contained in Paragraphs 1-104 of the complaint as if fully set forth herein. Allegations of Complaint 106: At all relevant times, Jenkins had a duty to Giuffre in the course of him providing direct legal services to her and as a third party beneficiary of Jenkins’s legal services provided to Pilot House. Response: Defendants deny the allegations contained in Paragraph 106.

Allegations of Complaint 107: Jenkins breached his duty to Giuffre by, among other things, a. b. failing to disclose his representation of Trzyna; simultaneous representing clients with conflicting interests;

c. failing to disclose that Trzyna had not timely and appropriately assigned the Patent Applications to Giuffre Associates; d. failing to advise Giuffre and Giuffre Associates of alternative and more appropriate methods of protecting the intellectual property; and [sic] Response: Defendants deny the allegations contained in Paragraph 107, including the

implication therein that defendant Jenkins owed such duties to Giuffre. Allegations of Complaint 108: As a direct and proximate result of Jenkins’ breach of duty, Giuffre has sustained economic damages in that (a) she has lost her business and the commercial value of her innovative risk solution and intellectual property; (b) she was forced to expend substantial sums of money in defending the Vermont Litigation brought by co-inventor Sathe, as well as other litigation; (c) she expended additional monies to retain Prof. David Hricik, one of the nation’s leading, if not the leading, legal expert in the ethics of patent prosecution to investigate and review Trzyna’s patent work and advise regarding the existence of a conflict of interest since Trzyna refused to provide any explanation or requested information, (d) her intellectual property, including but not limited to the patent applications, decreased in value due to the competing MCEA patents and the potential loss of priority, (e) she expended substantial sums of money, both in terms of Trzyna’s legal fees and expenses, and in computer professional fees and expenses, in furtherance of a patent strategy that was ill-advised, unnecessary and counterproductive, (f) the invention and potential applications that would have and should have remained confidential were disclosed to the public and are now not subject to patent protection, dissemination to competitors is far more difficult to control and limit, and thus are significantly reduced in value; and (g) Giuffre lost substantial foregone salary income from gainful employment. Response: Defendants deny the allegations contained in Paragraph 108. 28

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AFFIRMATIVE DEFENSES 1. Plaintiff’s claims are time-barred in whole or in part by the two-year statute of

limitations, as provided for in 735 ILCS §5/13-214.3(b). 2. Plaintiff’s claims are time-barred in whole or in part by the six-year statute of

repose, as provided for in 735 ILCS §5/13-214.3(c). 3. immunity. 4. Plaintiff failed to act reasonably to mitigate her alleged damages. Plaintiff’s claims are barred in whole or in part by the doctrine of judgmental

WHEREFORE, defendants Gerald Jenkins and Goldberg Kohn Ltd. pray that judgment be entered in their favor and against plaintiff, Sandra Giuffre, dismissing this action with prejudice at plaintiff’s cost. Dated: July 8, 2013 /s/ Barry S. Alberts Barry S. Alberts Lisa A. Brown SCHIFF HARDIN LLP 233 S. Wacker Dr. Chicago, Illinois 60606 (312) 258-5500 (p) (312) 258-5600 (f) balberts@schiffhardin.com lbrown@schiffhardin.com Firm ID No. 90219 Attorneys for Defendants Gerald Jenkins and Goldberg Kohn Ltd.

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CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing was electronically filed on July 8, 2013 with the Clerk of Court using CM/ECF, which will send notification to the registered attorney(s) of record that the documents have been filed and are available for viewing and downloading.

/s/ Barry S. Alberts

CH2\13196663.1