106 A.D.2d 368 | N.Y. App. Div. | 1984
—In an action, inter alia, for an assignment of defendant Lowey’s patent No. 4,259,314, injunctive relief and damages for breach of contract, plaintiff appeals from stated portions of a judgment of the Supreme Court, Westchester County (Buell, J.), dated November 30, 1982, which, among other things, dismissed the first, second and fourth causes of action of plaintiff’s complaint insofar as it was directed at compelling Lowey to assign his patent and sought to enjoin Lowey from using or commercially exploiting certain of its pharmaceutical product formulations disclosed in this patent.
Judgment affirmed, insofar as appealed from, with costs.
Defendant Lowey had been founder, president, chairman of the board, chief executive officer, and, after resigning from his other positions, consultant for plaintiff Forest Laboratories, Inc. (Forest). During his employment with Forest he was granted several patents relating to time-release pharmaceutical processes. In particular, in 1975,.Lowey and Robert Stafford were granted a patent on a sustained-release base and the process for making that base known as the “Synchron” process, which was assigned by them to Forest. Also during Lowey’s employment with Forest, the parties entered into an agreement in which, inter alia, Lowey agreed to assign to Forest all trade secrets and patents developed by him during the “term of the Employment Agreement”. Following Lowey’s resignation as chairman of the board on January 31,1977, the parties signed what is referred to as a consulting agreement, paragraph 5 of which is set forth below: “5. Lowey confirms that all inventions, discoveries, and patents and patent applications and improvements and modifications thereof heretofore made or obtained by Lowey are, and under prior agreements between Lowey and Forest have been,
Paragraph 6 of the consulting agreement sets forth Lowey’s obligation with respect to Forest’s trade secrets and confidential information: “6. Lowey recognizes that Forest has developed and is continuing to develop formulae, designs, business plans, processes, devices and materials pertaining to its research and the production and marketing of its products which are secret and confidential in character and are of great and unique value to Forest and which are now or may be used in its business (hereinafter referred to as ‘Secret Information’). It is acknowledged (1) that Lowey may have participated in the development of all or part of such Secret Information, (2) that all or part of such Secret Information may have been disclosed to Lowey in connection with his prior employment by Forest, and (3) that Secret Information may be disclosed to him in connection with the performance of his duties as a consultant hereunder. It is therefore acknowledged and agreed that such disclosure has been and will be made to Lowey with the understanding and on the condition that all such Secret Information, whether or not Lowey participated in its development or was otherwise received by Lowey, will be kept and maintaned [sic] by Lowey as confidential and in complete secrecy. Lowey agrees that he will not dislose [sic] at any time, in writing or otherwise, in any manner, directly or indirectly, to any person, persons or party, except
On June 15,1979, more than a year after Lowey’s termination as a consultant on June 8, 1978, the parties executed a third agreement (settlement agreement). It confirmed that the obligations and provisions set forth in paragraphs 5 and 6 of the consulting agreement remained in full force and effect. In addition, clause (b) of paragraph 5 of the settlement agreement contained a noncompetition provision as follows: “Lowey acknowledges that it is not inappropriate, that he agree not to compete with Forest for the term and to the extent set forth herein. Accordingly, Lowey agrees that for a period beginning on the date hereof and terminating at 12:00 midnight on June 8, 1981, he will not directly or indirectly either as an employee, officer, director, stockholder owning shares in any amount in a corporation whose shares are not publicly traded and a stockholder owning more than 1% of the outstanding common stock of a corporation whose shares are publicly traded, partner, joint venturer, consultant, or otherwise engage in and perform services for or have a financial interest in any business which directly or indirectly sells or distributes or offers to sell or distribute ‘controlled release’ or ‘sustained action’ pharmaceutical products to certain persons, firms or corporations who, on or prior to June 9, 1978, were (1) customers of Forest or (2) had been engaged in discussions with Forest with a view to becoming customers of Forest”.
On December 10, 1979, Lowey filed a patent application for a new sustained-released pharmaceutical process referred to as the “Simetry” process or the new Lowey patent, which was granted on March 31,1981. That patent, patent No. 4,259,314, is the subject of this action.
Forest thereafter commenced the instant action against Lowey alleging, inter alia, that Lowey violated and continues to violate paragraphs 5 and 6 of the consulting agreement by (1) disclosing part of Forest’s “sustained-relief” technology; and (2) disclosing trade secrets. (First and second causes of action in Forest’s second amended complaint.) In addition, Forest claimed Lowey violated clause (b) of paragraph 5 of the settlement agreement and his obligations as a former director, officer and employee of Forest by disclosing trade secrets and other confidential information.
Following a lengthy trial, Special Term permanently enjoined Lowey from using or exploiting the buccal nitroglycerin formulation set forth as example 1 in the subject patent. In its decision, Special Term made extensive fact findings, concluding