316 F. Supp. 1122 | S.D. Miss. | 1970
SUPPLEMENTAL OPINION
The above styled case was remanded to this Court by the Fifth Circuit Court of Appeals, 422 F.2d 1290, the opinion stating that “the trial court may have employed a partially incorrect standard in determining if the equipment, techniques and processes claimed to be trade secrets actually were trade secrets.” The cause was remanded for “specific findings and conclusions, under correct standards, of whether Cataphote’s claims are in fact trade secrets, and if they are of whether defendants are illegally appropriating them.” This Court does not find it necessary to supplement the record with additional evidence, nor rehash in detail the entire history of the facts adduced from three hearings.
Following the initial hearing, the District Judge then presiding, found that defendant Hudson was engaged in the construction of a plant to make glass beads by means of a vertical up-draft furnace, a process he had learned, indeed materially contributed to, while employed in a confidential relationship with plaintiff, and that while he had not revealed this process to others, it was likely in the development of his own plant, later incorporated as Hudson Industries, Inc., and included herein as co-defendant, he would, in competition with plaintiff, make use of some knowledge and skill acquired while employed by plaintiff. Accordingly, that Court issued a temporary injunction restraining defendants from employing the use “of any plan, design, pattern, process or likeness or similarity of any feature or aspect of the vertical updraft furnace” used by
It seems obvious to this Court that each and every one of the processes outlined by plaintiff is an integral part of the successful production of beads, these processes being common and necessary to all vertical type furnaces, and known to the trade. The processes vary in the techniques applied according to the variances in design and dimensions of the stacks and appurtenances. The identical
As stated under Sub. Topic B. Trade Secrets in “Developments — Competitive Torts,” 77 Har.Law Rev. 888, 950: “Most of the difficult cases arise out of the employment relationship, often involving technically skilled employees who change jobs. * * * The courts have said that such employees may carry away their own ‘faculties, skill, and experience,’ but may not reveal ‘confidential information secured solely through their employment’.” Albeit Hudson’s skills may not be considered highly technical, he obviously has native mechanical ingenuity. The Court confesses it could be in error in concluding that plaintiff has not shown that its claimed techniques, reduced to six, are such that warrant protection as trade secrets; however, in weighing the competing interests, the Court again comes to its same eventual conclusion. The Court considered the factors listed on page 18 of its decision [422 F.2d 1295]. Plaintiff claimed all in its favor. On the other hand, defendant, with his mechanical deftness, showed the ease with which a glass bead plant could be built and operated. In this he was supported by witnesses. On separation from plaintiff’s employ, Hudson took no drawings, designs, plans, or any written matter with him. The knowledge he took with him was not acquired illegally, but through his employment and as a result of his own talents. He waited seven years before undertaking to be competitive. He was under no contract or written agreement not to compete, but solely under an implied legal obligation not to violate a confidential relationship. All of these facts and conclusions are set forth in the former opinion, and the Court has applied equitable doctrines. Although Water Services, Inc. v. Tesco Chemicals, Inc., 5 Cir., 410 F.2d 163, cited by the Appellate Court in its remand, involved a Georgia covenant not to compete, no such covenant being pled herein, Judge Wisdom said: “But since it may be difficult to determine, as a matter of law, what is a trade secret, the covenant not to compete is a pragmatic solution to the problem of protecting confidential information.” This, plaintiff Cataphote, failed to provide for itself.
The record is lacking with respect to the trade area covered by these two plants except that they do have a national market rather than local. The Court conjectures that the market for glass beads may well determine for defendants whether their risk and expense have been worthwhile.
The Court re-affirms its former decision that relief be denied to plaintiff. Costs, if any, are assessed to plaintiff.
The Court sees no need for the impounding of this supplemental opinion as it contains no recitation of the claimed trade secrets.
An order may be submitted by defendants.