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Revolaze, L.L.C. v. Dentons US L.L.P.
Citation: 2022 Ohio 1392Docket: 109742
Court: Ohio Court of Appeals; April 28, 2022; Ohio; State Appellate Court
Original Court Document: View Document
Revolaze, L.L.C. v. Dentons US L.L.P. is an Ohio Court of Appeals case affirming the trial court's judgment in favor of plaintiff-appellee Revolaze, LLC, in a legal malpractice action against defendants-appellants Dentons US LLP and Mark Hogge. Dentons, part of a global law firm structure known as the Dentons verein, employed Hogge, a partner with extensive patent litigation experience. Revolaze, a family-owned business in Westlake, Ohio, specializes in patented laser abrading technology that creates a worn or faded look on denim garments more efficiently and safely than traditional methods, which were associated with health risks. Initially, Revolaze licensed its technology through lump-sum payments but struggled to secure additional agreements due to overseas manufacturing trends. Following Levi's decision to ban sandblasted jeans, Revolaze suspected infringement of its patents and filed a complaint with the U.S. International Trade Commission against multiple denim companies. The court's ruling was supported by an amicus brief from the Ohio Bar Liability Insurance Company. RevoLaze aimed to secure a general exclusion order (GEO) to prevent imports of infringing products by identified companies, independent of whether those companies were named respondents in the ITC litigation. Since the ITC does not award monetary damages, RevoLaze planned to file companion federal district court cases against infringers to negotiate licensing agreements and seek damages. In February 2014, RevoLaze engaged Dentons US for litigation in the ITC and other venues, alongside co-counsel from Global IP Law Group and MoloLamken, focusing on licensing negotiations. Due to the significant costs of ITC litigation, estimated at $6-7 million, RevoLaze entered a nonrecourse Funding Agreement with Longford Capital to cover legal fees, which would be absorbed by Longford if RevoLaze lost. Successful outcomes would allow Longford to recoup its investment with interest and a share of licensing proceeds. Dentons agreed to discount their rates by 25% and cap fees at Longford’s investment amount, in exchange for a five percent share of proceeds from patent enforcement and a contingent fee from litigation claims. Longford provided $8 million in funding, distributed in three phases: Phase I allocated $3,175,000 for proceedings against 24 denim brands, ten manufacturers, and five laser companies; Phase II allocated $2,134,000 for additional brands and manufacturers; and Phase III allocated $1,746,000 for brands and manufacturers in Mexico, China, and Turkey. The agreement included a confidentiality clause. On August 15, 2014, Dentons filed 17 lawsuits in the U.S. District Court for the Northern District of Ohio against denim companies for patent infringements. Following that, on August 18, 2014, Dentons filed a verified complaint with the ITC under Section 337 of the Tariff Act of 1930, seeking injunctive relief, including a GEO to block imports of infringing products. On March 11, 2015, The Gap, Inc. filed a motion to disqualify Dentons US from representing RevoLaze in the ITC. Gap argued that Dentons had an ethical conflict due to its longstanding representation of Gap in multiple matters, alleging that this relationship provided Dentons access to Gap's confidential information relevant to the case. Gap alleged that Dentons failed to disclose a conflict of interest before filing suit for RevoLaze in 2015, with Gap discovering the conflict themselves. Gap also claimed that Dentons did not seek a conflict waiver from them. In response, Dentons US argued that it and Dentons Canada LLP operated as separate firms within the Dentons verein, asserting that they did not share client files or confidential information unless acting as co-counsel and maintained separate financial operations. Dentons US stated that its attorneys had not accessed any files from Dentons Canada related to Gap and that an ethical screen was in place to prevent any prejudice to Gap. They contended that a retainer agreement signed by Gap with Dentons Canada included a provision waiving potential future conflicts, suggesting Gap consented to any conflicts that arose. Dentons US further claimed that Gap only identified the conflict after failing to settle and acknowledging challenges in their case against RevoLaze. Gap was granted leave to file a reply, disputing Dentons US's timeline and conduct during discovery and settlement negotiations. Gap raised additional disqualification grounds, noting that Dentons had informed RevoLaze of a conflict as early as February 2014 and highlighted a partial contingency fee arrangement that suggested Dentons had a vested interest in the outcome. They questioned why the conflict was disclosed to RevoLaze but not to them. Subsequently, the ITC's Chief Administrative Law Judge disqualified Dentons US from representing RevoLaze on May 7, 2015, ruling that the Dentons verein constituted a single law firm for conflict purposes. Following this disqualification, RevoLaze engaged Global and later MoloLamken and attorney Cindy Ahn for assistance, leading to a need for additional funding from Longford, which agreed to reallocate funds but not to provide new financing. Dentons sought review of the disqualification, but the ITC found the issue moot on April 12, 2016, since the investigation concluded through settlement or withdrawal. Modification of the Funding Agreement necessitated significant work from replacement attorneys, including preparing for and defending over 12 depositions, handling discovery requests, formulating "claim construction" arguments, researching evidence related to RevoLaze's domestic industry, and negotiating potential settlements. RevoLaze accrued over $1 million in debt to these attorneys and subsequently settled with each respondent involved in the ITC litigation. In October 2015, RevoLaze sought to terminate the investigation and indicated it would no longer pursue a General Exclusion Order (GEO), leading to the ITC's termination of the litigation in November 2015. In April 2016, RevoLaze filed a civil complaint against Dentons US in Cuyahoga County for legal malpractice, alleging multiple breaches of professional conduct. Specific claims included: conflicted representation (Rule 1.7), inadequate preparation for the ITC complaint, failure to engage necessary experts, improper delegation of litigation tasks, ineffective negotiation strategy, limited pre-suit investigations, unauthorized disclosure of the Funding Agreement, and lack of communication about conflicts of interest (Rule 1.4). Additional allegations included inadequate discovery efforts, failure to adhere to the joint discovery plan, neglect in addressing respondents’ inadequate responses, inability to identify manufacturers of infringing products, unconsulted stipulations regarding reliance on previous settlements, and inappropriate submission of a settlement demand without RevoLaze's consent. RevoLaze claimed that Dentons US’ negligence led to several injuries, including loss of enforcement rights on patents, financial expenditures on claims, diminished leverage in litigation due to improper document production, less favorable terms in a renegotiated funding agreement, and ongoing patent protection costs due to failure to secure a general exclusion order (GEO) in ITC litigation. The case proceeded to a ten-day jury trial involving 21 witnesses, including nine experts. RevoLaze asserted that it incurred significant damages due to Dentons US’ false assurances regarding a conflict with Gap, leading to increased costs in the funding agreement, higher legal fees, and lost licensing revenues tied to the GEO. Testimony revealed that Dentons US failed to inform Gap of the conflict and did not secure consent for concurrent representation, nor did it communicate the risk of disqualification to RevoLaze. Experts estimated that RevoLaze could have obtained between $23,049,769 and $39,280,337 in additional licensing revenues if not for the disqualification. The jury ruled in favor of RevoLaze, finding Dentons US responsible for increased costs and lost licensing revenues, awarding $32,262,488.50 in compensatory damages. Dentons US filed a motion for judgment notwithstanding the verdict, arguing insufficient evidence of breach, proximate cause, or damages, which the trial court denied, affirming that the evidence supported the jury's verdict. Dentons US subsequently appealed, citing errors in the trial court's denial regarding breach, proximate cause related to licensing damages, and the completeness of jury instructions on damages. Civ.R. 50(B)(1) permits a party to move for judgment notwithstanding the verdict (JNOV), allowing the court to either uphold the verdict or reopen the judgment to order a new trial or direct a different judgment. A JNOV motion evaluates whether the evidence is insufficient to support the verdict, focusing on the materiality of evidence rather than the credibility or weight of the evidence. The court must view the evidence favorably for the opposing party, and if substantial evidence exists supporting that party's case, the motion must be denied. A favorable ruling on a JNOV motion is challenging to achieve, and appellate courts review denials under a de novo standard. In the context of legal malpractice, Dentons US contends the trial court incorrectly denied its JNOV motion concerning the breach element of the malpractice claim. To succeed in a legal malpractice claim in Ohio, a plaintiff must prove an attorney-client relationship, a breach of duty, and a causal link to damages. These elements are conjunctive, meaning the failure to establish any one of them is critical. The duty element is typically shown by the attorney-client relationship, which Dentons US acknowledges existed while representing RevoLaze until its disqualification. The second element of breach of the duty of care is examined, focusing on an attorney's obligation to exercise the standard knowledge, skill, and diligence typical of legal professionals in similar circumstances. Dentons US challenges the trial court's denial of a Judgment Notwithstanding the Verdict (JNOV), arguing that the risk of disqualification was unforeseeable. They assert that a conflict of interest alone has never been grounds for disqualification in the International Trade Commission (ITC) context. Relevant to this case is Ohio’s Prof.Cond. R. 1.7, which details conflicts of interest for current clients, specifying conditions under which a conflict arises. Dr. Costin provided testimony indicating that after securing litigation funding, Dentons US acknowledged potential conflicts with several companies, including Gap. He recounted Hogge's assurances that the conflict with Gap was resolved. Dr. Costin noted an email from Hogge on August 16, 2014, stating that Calvin Klein, initially listed as a respondent, was excluded due to prior representation by Dentons' Hong Kong office, implying a desire to avoid a disqualification motion. Further, on February 4, 2015, Hogge conveyed that Gap’s attorneys claimed Dentons US had a conflict and needed to withdraw. Despite Dr. Costin's concerns, Hogge reassured him of no conflict. However, when Gap eventually filed a motion to disqualify, Dr. Costin was shocked to learn via email from Hogge on May 8, 2015, that Dentons US had indeed been disqualified, contradicting previous assurances. This sequence of events suggests that Hogge's earlier statements undermine Dentons' assertion that disqualification was not foreseeable. Hogge’s statement acknowledges the potential for disqualification due to previous work done by Dentons Hong Kong for Calvin Klein, despite Dentons US's assertion of being "separate firms." This acknowledgment suggests an understanding of the risks associated with filing a motion to disqualify, which had a 50% chance of success. By involving Gap in the ITC litigation, Dentons US violated Rule 1.7(a), as its representation of RevoLaze was directly adverse to Gap, a current client. Expert testimony is generally required to substantiate claims of legal malpractice unless the issue is evident to a layperson. RevoLaze provided expert testimony, including from Walter J. Rekstis III, who indicated that Dentons US had a conflict of interest in representing both RevoLaze and Gap. Rekstis argued that there was no substantive separation between Dentons US and Dentons Canada, as they operated under a common conflicts framework, shared client information, and presented themselves as a single entity. His findings were supported by the collective representation of lawyers on the Dentons verein's website and the shared email domains. Ultimately, the evidence suggests that Dentons US's claim of separation from Dentons Canada is untenable, as they initially recognized a conflict with Gap, indicating their belief in an interconnected relationship within the verein. Model rules regarding conflicts of interest necessitate that Dentons obtain informed written consent from both Gap and RevoLaze before proceeding with representation due to an existing conflict, as outlined in Rule 1.7(b). This rule prohibits a lawyer from accepting or continuing a client representation if a conflict arises unless specific conditions are met: competent and diligent representation must be possible, informed consent must be obtained in writing from each affected client, and representation must not be prohibited by other provisions. Rekstis testified that Dentons failed to obtain the necessary informed consent, thereby breaching its standard of care in managing the concurrent representation of RevoLaze and Gap. He emphasized that, had Dentons sought informed consent, RevoLaze should have received a thorough explanation of the conflict and its potential litigation implications, including the typical outcome of disqualification. Rekstis noted that the failure to obtain consent left RevoLaze unprepared, as they could have been advised to seek independent legal counsel or have conflict counsel ready in case of disqualification. Expert witness Robert Krupka supported this view, arguing that Dentons had a clear conflict of interest due to its concurrent representation and that the risk of disqualification was foreseeable, particularly given Gap's multiple client relationships with Dentons. Krupka highlighted that Gap did not expect to be sued by a Dentons member, as evidenced by a letter sent to Dentons prior to the disqualification motion, asserting that the firm had no right to initiate such a suit. Additionally, Krupka criticized Hogge for inadequately communicating the conflict's status to Dr. Costin, arguing that a more comprehensive explanation of the risks associated with including Gap in the litigation was necessary. Krupka testified that the structure of a verein, particularly how the Dentons verein operated compared to their client representations, created a conflict that warranted disqualification. He noted that vereins constitute a minuscule fraction of law firms and cited literature, including an article by expert Douglas Richmond, highlighting the inherent risks and difficulties associated with such organizational forms. Krupka asserted that Dentons US failed to meet the standard of care by not seeking independent advice or consulting regulatory bodies before involving Gap in litigation. He argued that without authority allowing such action, Dentons US's approach would inevitably lead to disqualification. The court found sufficient evidence for a jury to conclude that Dentons US breached the standard of care by including Gap, identifying a clear conflict of interest and countering Dentons US's assertion that disqualification was unforeseeable. In the second assignment of error, Dentons US contended that the trial court wrongly denied its motion for judgment notwithstanding the verdict (JNOV) regarding RevoLaze's lost-licensing damages claim. Dentons argued that RevoLaze did not provide adequate evidence linking lost revenues to a breach of duty, specifically failing to show they would have succeeded in obtaining a General Exclusion Order (GEO) and that they opted to pursue the GEO with other counsel. The analysis referenced the standards for proving damages in legal malpractice actions established in Vahila and further clarified in Environmental Network Corp. v. Goodman Weiss Miller. The Supreme Court of Ohio indicated that while some evidence of the underlying claim's merits may be necessary, a blanket requirement for proof of success in all cases is not endorsed. The context noted that plaintiffs in Vahila claimed significant financial losses due to alleged negligence. Plaintiffs may experience damage or loss even if they cannot prove success in the underlying case. The court emphasized that causation in malpractice actions often hinges on the merits of the underlying case. In Environmental Network Corp., the Supreme Court of Ohio clarified that while not all malpractice cases require proof of success in the underlying matter, some do. Specifically, if a plaintiff's theory for recovery is based on the assumption that they would have achieved a more favorable outcome at trial, they must provide evidence of the merits of that underlying claim. The court ruled that the plaintiffs must demonstrate they would have been successful in the underlying case, making it insufficient to present merely "some evidence" of its merits. The case-within-a-case doctrine applies, requiring plaintiffs to establish causation and damages by showing that, but for the defendant's actions, they would have received a better outcome than what was settled. In the current matter, Dentons US asserts that RevoLaze did not present adequate evidence to prove it would have succeeded in obtaining a favorable outcome regarding the GEO without Dentons US' disqualification, thus failing to meet the case-within-a-case standard as specified in Environmental Network Corp. Dentons US claims that RevoLaze needed to prove the same elements in the malpractice case as it would have in the ITC, specifically regarding the importation and sale of respondents' products in the U.S. RevoLaze demonstrated a valid patent infringement claim, establishing the existence of a domestic industry related to the patented products at the time of the ITC proceeding. A General Exclusion Order (GEO) was deemed necessary to prevent circumvention of a limited exclusion order due to challenges in identifying all sources of infringing products. The adverse outcome of RevoLaze not receiving the GEO was linked to the actions or inactions of Dentons, which affected the case's trajectory. Dr. Costin testified that RevoLaze’s patent, referred to as “972,” revolutionized laser abrading technology by allowing variable speed application of the laser on denim, creating a worn appearance. Following unauthorized use of its technology by other companies, RevoLaze sought legal counsel, eventually leading to a Funding Agreement with financiers after Dentons declined a contingency fee arrangement. To secure a GEO, RevoLaze needed to prove three elements: first, that laser-abraded jeans were being imported into the U.S., which they substantiated by purchasing jeans from various retailers and verifying their origins through laboratory analysis. Second, they needed to prove infringement, an area where Hogge believed RevoLaze needed further work. Dr. Costin indicated that RevoLaze could substantiate this claim, aided by their major investor, Lear, who had significant expertise in textiles and infringement proof. Dr. Costin indicated that Guilford Mills recommended scanning electron microscopy (SEM) for demonstrating that RevoLaze's denim products were subject to infringement. This method provided high-resolution images of the sample's surface and composition by analyzing electron interactions, enabling RevoLaze to illustrate that the worn appearance of jeans resulted from laser treatment. RevoLaze submitted samples from all denim brands involved in the litigation to specialized laboratories, which confirmed the presence of pores in the fibers indicative of laser use. To establish its status as a legitimate business rather than a patent troll, RevoLaze needed to present evidence of its operational scale over the past two decades, including expenditures, employee counts, equipment, warehouse space, and inventions. Dr. Costin testified that site visits by respondents confirmed the substantial business operations of RevoLaze, showcasing significant investments in laser technology and ongoing production activities. Despite Dentons U.S. and Hogge expressing confidence in RevoLaze's ability to meet the requirements for obtaining a general exclusion order (GEO), challenges remained. Dr. Costin highlighted the widespread infringement by numerous denim brands globally and the use of lasers in multiple countries as strong arguments for the case. Dentons U.S. was so convinced of the case's merits that they sought third-party funding, capped their fees, and aimed to share in any resultant royalties. Although Dentons U.S. contended that RevoLaze did not present expert testimony on infringement during the trial and failed to provide garments for jury examination, the court did not view this as detrimental to RevoLaze’s overall case. Dr. Costin effectively explained how SEM was utilized to demonstrate infringement. Dr. Costin provided an affidavit to the ITC, including scans of jeans from all respondents to substantiate claims of infringement. Despite Dentons US’ current claims, Hogge testified that RevoLaze had established infringement against the respondents. The record shows that neither Hogge nor Dentons US raised concerns about RevoLaze's ability to prove its case for obtaining a General Exclusion Order (GEO). Testimonies indicated that RevoLaze likely would have secured the GEO if not for Dentons US' disqualification, a belief also held by Longford, the third-party funder. William Farrell Jr., managing director and general counsel of Longford, explained that their investments target companies with strong commercial legal claims, specifically in business-to-business disputes, antitrust, and intellectual property. Longford's funding structure is an equity investment, not a loan, meaning they only profit if the case is successful, absorbing losses in unsuccessful cases. Farrell noted that Longford declines 90% of funding opportunities after a detailed evaluation process that includes two underwriting stages: an internal review by Longford's lawyers and an independent legal review by an outside firm. The internal review assesses case strengths and weaknesses and requires a detailed budget and case-management plan. Only 20% of opportunities advance past this stage for independent evaluation, which must confirm the case's strength for funding to be approved. Farrell indicated that Longford rejected approximately 40% of opportunities after an independent legal review. In 2013, Longford was introduced to RevoLaze by Steve Stein, an attorney from Dentons US. Subsequent meetings included detailed presentations illustrating potential damages, which Longford found compelling, estimating damages could reach hundreds of millions, potentially approaching a billion dollars, though Farrell expressed skepticism regarding the billion-dollar figure. Longford categorized its analysis of the RevoLaze opportunity into four key areas: validity of the patents, evidence of infringement, damages (the primary focus for Longford as an investment firm), and strategy, which emphasized the legal team's strengths and expected outcomes. Following the initial evaluation, Longford opted to advance with an independent legal review through a patent-experienced law firm. During the second phase, Dentons US was tasked with providing a budget for the enforcement campaign stages, influencing Longford's investment decision. Farrell detailed the vetting process for patent validity, which included reviewing the patents and prior art, resulting in no concerns. For infringement, an independent review was conducted with assistance from Dentons and RevoLaze, identifying companies using laser-abraded technologies on jeans as significant evidence supporting infringement claims. Farrell noted compelling independent articles on the subject and highlighted the marketing advantages of laser abrading, which were favorable to Longford's investment considerations. Ultimately, Farrell concluded that the evidence strengthened the case for infringement. Compelling evidence was found regarding the infringement of certain patents, specifically through microscopic analysis of fibers in jeans, indicating laser use rather than sanding. Discussions with Dentons revealed no significant concerns about patent validity, despite some prior art identified that warranted responses. However, there were questions about identifying infringing companies, particularly those manufacturing overseas. Farrell noted that when a motion to disqualify was raised, Hogge reassured him it was a typical defense tactic without merit. A related incident involved Dentons inadvertently sharing a funding agreement, leading to a motion to compel from respondents despite their request for the document's return. Subsequently, concerns grew about addressing the motion to disqualify, which was escalated to Dentons’ general counsel. During a meeting between Farrell and Hogge, it was suggested that Gap was using the motion to disrupt RevoLaze’s case, with Hogge expressing doubts about reaching an ITC hearing. This information was new to Farrell, who had initially viewed achieving an exclusion order as crucial, especially given the difficulty in identifying foreign companies allegedly infringing on RevoLaze's patents. A general exclusion order (GEO) broadens the injunction to encompass any company attempting to enter the U.S. market, beyond just named respondents such as the Gap. Achieving this GEO required a hearing. Farrell testified that prior to the Gap's motion to disqualify, there were no expressed concerns about the case's strength, and Hogge indicated that the case was progressing well, particularly when the investigation was initiated, a key aspect of an International Trade Commission (ITC) action. Evidence presented by RevoLaze supported the jury’s conclusion that RevoLaze would likely secure a GEO. Longford's $8 million investment in RevoLaze's campaign followed a thorough assessment of the case’s merits, including the validity of patents, with no concerns raised about obtaining a GEO. Despite Dentons US later suggesting validity issues, Farrell confirmed that there were no prior concerns from Hogge or Dentons US regarding patent validity, and that confidence in the case's progress was high. Additionally, Dentons US's agreement to cap fees indicated their belief in the potential for a GEO. Expert testimony from Charles Schill, an ITC veteran, reinforced the idea that obtaining a GEO is feasible with the right case, particularly one involving many respondents and manageable technology. Schill opined that RevoLaze's situation aligned with successful cases he had previously handled, highlighting the ease of manufacturing and the challenge of tracking product origins due to multiple supply routes. The assessment indicates that RevoLaze had a strong case for obtaining a general exclusion order (GEO) based on several favorable factors, including compliance with commission rules and the successful initiation of their case by the full commission. Expert testimony from Schill highlighted that RevoLaze's situation mirrored successful cases he previously handled, with numerous respondents and easily testable technology, enabling swift operations for overseas companies to produce infringing products. Additionally, the settlement of several companies reduced the number of potential trial participants, further strengthening RevoLaze's position. Schill concluded that the evidence presented by RevoLaze was sufficient to meet the burden of proof for a GEO, particularly emphasizing Hogge’s admissions that were critical to the case. Despite these findings, Dentons US contended that the trial court did not adequately instruct the jury on proximate cause, which is essential for the jury to understand the legal standards applicable to the case. The case revolves around the interpretation and application of jury instructions related to a legal malpractice claim involving the case-within-a-case doctrine. Dentons US asserts that the jury should have been instructed on the underlying case rather than just the malpractice elements. They proposed specific jury instructions tailored for patent cases, which the trial court rejected. Instead, the trial court instructed the jury to consider if Mark Hogge's negligence directly caused harm to RevoLaze, emphasizing that any alleged losses must be evaluated separately. Specifically, for the fourth type of harm—lost licensing revenue from a potential general exclusion order in the ITC action—the jury needed to find that RevoLaze would have successfully obtained the order but for Hogge’s negligence, thus meeting an additional causation requirement under Ohio law. The Supreme Court of Ohio established that plaintiffs in legal malpractice cases must prove, by a preponderance of the evidence, that they would have achieved a more favorable outcome had the attorney not been negligent. The trial court's instructions were deemed sufficient to meet this burden. Dentons US further contended that RevoLaze did not provide adequate evidence of proximate cause regarding lost licensing damages because they abandoned the pursuit of the general exclusion order shortly after discontinuing their relationship with Dentons US. However, the reliance on precedent from E.B.P. Inc. v. Cozza. Steuer was found to be misplaced, as the court clarified that a settlement does not automatically waive a malpractice claim unless it results from reasonable attorney judgment, which was not asserted in this case. In DePugh v. Sladoje, the court established that a legal malpractice claim can proceed if an attorney acts unreasonably or commits malpractice per se, even if a settlement is available. Clients should not be forced to reject settlement offers while pursuing malpractice claims, especially if the attorney's errors compromise their case. In this context, RevoLaze’s decision to terminate its ITC campaign and settle was influenced by Dentons US's disqualification, which left them in a dire financial situation after significant investments in legal fees and expenses. Testimonies indicated that RevoLaze was struggling to maintain operations and could not continue pursuing their goal of obtaining the GEO post-disqualification, countering Dentons US's argument that they could still proceed. The court found that RevoLaze's actions did not constitute a waiver of their right to file a malpractice claim. In terms of lost licensing damages, the court noted that to succeed in a legal malpractice case, a plaintiff must demonstrate that the malpractice directly caused their damages, showing a calculable financial loss connected to the attorney's conduct. Dentons US contended that RevoLaze did not adequately prove this connection or their claim for lost licensing damages, reiterating that RevoLaze could still seek licensing revenues through further litigation. The court ultimately overruled Dentons US's arguments regarding both the waiver of malpractice claims and the issue of lost licensing damages. RevoLaze demonstrated that Dentons US' disqualification severely hindered its ability to pursue a General Exclusive Order (GEO) and negotiate settlements, with expert witness Krupka stating that RevoLaze's disarray during negotiations led to less favorable outcomes. Despite reaching settlements with various respondents, the disqualification adversely affected RevoLaze's negotiating position, reducing leverage and increasing the likelihood of respondents seeking more advantageous deals. The jury found sufficient evidence that Dentons US’ actions compromised RevoLaze's efforts to secure the GEO and negotiate effectively. Dentons US contended that RevoLaze failed to prove lost licensing damages, asserting that the testimony from RevoLaze's expert witness, Justin Lewis, was flawed and speculative. Under Ohio law, a plaintiff must demonstrate lost-profit damages with reasonable certainty, as established in precedent cases. Lewis, hired to calculate economic damages, presented a methodology for determining damages related to lost licensing opportunities resulting from the inability to obtain the GEO. He estimated that securing the GEO would have allowed RevoLaze to capture 80% of the U.S. laser abraded denim market, potentially yielding between $26 million and $39 million in royalties. Dentons US dismissed these projections as speculative, but Lewis provided detailed methods to substantiate his calculations. Lewis conducted a comprehensive analysis to assess the U.S. market share of denim units potentially affected by the General Exclusion Order (GEO). He consulted with industry experts, including Ken Kiser, and reviewed various research reports, which indicated that 1.3 billion denim units were imported in 2016 and 1.4 billion in 2017, with an anticipated growth rate of 8.9% through 2021. This growth rate was deemed reasonable for estimating future imports subject to the GEO. Next, Lewis evaluated the percentage of laser-abrasion in denim units, finding that 27.5% of the global market consisted of laser-abrasioned products in 2017, projected to increase to 50% by 2020. He used these figures to estimate that approximately four billion units would be laser abraded by 2021. Lewis then estimated the market share RevoLaze could have expected to license if the GEO had been granted. He determined that it would be unrealistic to expect 100% licensing due to the presence of larger and smaller companies. After consultations, he concluded that an 80-85% licensing potential was reasonable, opting for the conservative estimate of 80%, especially since RevoLaze had previously licensed about 50% of the market without the GEO. To refine his analysis, Lewis subtracted units already licensed by RevoLaze from the anticipated 80% of potential units. He used market share data from companies like Levi’s, which held an 11.4% market share, to adjust his calculations accordingly. Lastly, Lewis analyzed the royalty rates per unit based on existing license agreements, categorizing them into three groups: pre-disqualification rates for major companies (15-40 cents per unit), post-disqualification rates for new firms (10-25 cents per unit), and post-ITC rates, which generally hovered around 10 cents, with some variation. Lewis applied royalty rates between 10 and 15 cents per unit to unlicensed denim units, estimating lost royalties between $53.7 million and $80.5 million. He acknowledged the inherent uncertainty in projections and calculated a discount rate to reflect this risk. Using "risk adjusted hurdle rates" based on venture capital expectations, Lewis categorized RevoLaze's technology as low-risk at 20-30% due to its introduction in a familiar denim industry, ultimately applying a 20% discount rate. This adjustment resulted in present values of lost royalties estimated at $26,186,891 for 10 cents per unit and $39,280,337 for 15 cents per unit, effectively halving the initial estimates. Dentons US argued that the expectation of RevoLaze licensing 80% of the U.S. denim market highlighted the speculative nature of Lewis’ opinion. However, Lewis maintained confidence in this projection, citing RevoLaze's successful licensing of 50% of the market without a GEO (Government Exclusive Order), suggesting that capturing an additional 30% would be feasible with a GEO. Expert testimony from Kiser, an industry professional with 27 years of experience, supported the notion that RevoLaze could license most of the industry shortly after obtaining a GEO, as major denim importers would avoid the risks of litigation and penalties associated with infringing products. Additionally, Lewis addressed concerns raised by Dentons US’ damage expert, Robert Brlas, regarding the source of market data. Lewis recalculated using Euromonitor’s data, which focused solely on the U.S. jeans market, adjusting for non-jeans denim garments. His findings indicated that even with this alternative data, the damage estimates remained consistent with his original calculations, reinforcing that the assumptions from both parties were closely aligned and therefore not speculative. Dentons US contended that the 80 percent market share projection was speculative and should be excluded as it relied on a withdrawn expert opinion. Under Ohio law, an expert may draw upon various sources, including treatises, discussions with colleagues, and insights from other experts, to form their opinions. Lewis, the expert in question, consulted with industry experts, including Kiser, and reviewed industry reports and data to support his calculations. The court found that Lewis established an adequate foundation for his testimony regarding the market share figure and was effectively cross-examined on it. The court also noted that Lewis's projection was not speculative, as it aligned closely with the assumptions of Dentons US's own damage expert. Consequently, the court overruled Dentons US's third assignment of error, affirmed the judgment, ordered the appellants to pay the costs, and directed the Cuyahoga Common Pleas Court to execute the judgment. The judges concurred in this decision.