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A federal jury on Tuesday awarded nearly $18.9 million to The Graham Co., a Philadelphia insurance brokerage firm, in its copyright infringement case against one of its former employees and the brokerage firm he now works for. In the suit, Graham claimed that former employee Thomas Haughey took copies of two massive company manuals when he left in 1991 to join USI Holdings Corp., of Briarcliff Manor, N.Y., and that USI Holdings ignored the copyright notices on the books and began using them in its own sales proposals. In its verdict, the jury concluded that both Haughey and USI Holdings had infringed Graham’s copyrights and specifically rejected a defense argument that the suit had been filed too late, concluding instead that Graham had no opportunity to discover the violations prior to February 2005, when it filed the suit. The jury said USI Holdings should pay $16,562,230 and that Haughey should pay $2,297,397, for a total verdict of $18,859,627. Graham’s lawyer, David J. Wolfsohn of Woodcock Washburn, said yesterday that the judgment could swell by $8 million when prejudgment interest is added. Wolfsohn was assisted in the trial by Woodcock Washburn attorneys Aleksander J. Goranin and Loretta W. Weathers. Defense attorney Thomas Zemaitis of Pepper Hamilton declined to comment except to say that he intends to ask Chief U.S. District Judge Harvey Bartle III to overturn the verdict and, if necessary, to file an appeal challenging some of Bartle’s rulings. In his opening statement, Wolfsohn told the jury that the case centered on two books – one called the Standard Survey and Analysis, the other called the Standard Proposal. “Although those titles may not sound very catchy,” Wolfsohn said, “these two books became extremely important – indeed critical – to the businesses of two companies.” Each book was several hundred pages long, Wolfsohn said, and contained “descriptions of insurance coverage concepts divided into categories of the price of insurance policies that a business would get.” Wolfsohn said the books were the brainchild of Bill Graham who began developing them in the 1960s when he took over the company from his father. The purpose of the books, he said, was to assist Graham’s commercial insurance brokers by providing standardized advice in the complex maze of insurance issues that arise when advising corporate clients on their insurance needs. The evidence, Wolfsohn said, showed that when Haughey left Graham, he took copies of each of the books and that USI Holdings soon after copied the books by retyping them in their entirety, omitting only the copyright notices and references to the Graham company. For 14 years, Wolfsohn said, USI Holdings routinely used the books on a day-to-day basis, and the evidence showed that its employees were routinely reminded to consult the books on a regular basis when preparing sales proposals. “They knew they were violating the law,” Wolfsohn said in his closing argument. Wolfsohn also told the jury there was evidence that critical documents had been destroyed by a USI Holdings employee who at first denied destroying the documents in a deposition, but later admitted she had done so. That evidence, Wolfsohn said, “shows that these people know that what they did was wrong but, more importantly, that they know that they took something of value because they were trying to cover it up.” According to a transcript of Wolfsohn’s closing argument, he said “It’s not just that the files were destroyed, but that lies . . . were made in depositions and in this courtroom about what happened.” But Zemaitis, in his closing argument, urged the jury not to infer too much from the small number of documents destroyed in a single USI Holdings office in Allentown, since the evidence showed that “thousands upon thousands” of documents were produced from its other offices. “Mr. Wolfsohn is trying hard to make you believe that something bad happened, but the evidence just doesn’t add up,” Zemaitis said. Instead, Zemaitis said, the evidence showed the destroyed documents were more than 10 years old and were not even records relating to USI Holdings’ business. The Allentown office had “a serious document-storage problem,” and some documents dating from the period of 1992 to 1995 were thrown out. But, those files did not contain evidence in this case or documents that were called for by the court’s order,” Zemaitis said. But “even on the off chance that they did,” Zemaitis said, “you know it had to have been a very small amount relative to the mountain of documents that were made available to Graham in this case.” Zemaitis urged the jury not to place too much emphasis on the destroyed documents, saying they should “focus on the issues in the case and not on a side show.” The real issue, Zemaitis said, was that Graham had not proven its claim of copyright infringement. Although USI Holdings admits that some of the material from the books was copied and used in its proposals, Zemaitis insisted that the material was “not important and did not generate any revenues to USI.” Zemaitis told the jury that, despite Wolfsohn’s claim, the material from the two books was not “crucial” to USI Holdings’ business. “It’s not even important to USI,” Zemaitis said. “It’s not to say that it’s not useful, but it’s not important in generating business, despite what Mr. Wolfsohn says.” Wolfsohn, in his rebuttal speech, mocked Zemaitis’ argument, comparing it to a “fourth grader” who gets caught copying a social studies paper and tries to wriggle his way out of a sticky situation by saying “first of all mom, I didn’t copy my English paper, and secondly, you know, even if I hadn’t cheated, I would have gotten an ‘A’ anyway.”

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