289 Mass. 277 | Mass. | 1935
The plaintiff and the defendant Milton Bradley Company are corporations engaged in manufacturing toys from cardboard. The defendant Church was employed by the plaintiff prior to April 27, 1929, and some time thereafter entered the employment of the defendant corporation.
This suit in equity was brought to establish the plaintiff’s right, as to a trade secret, to a process of manufacturing toys from cardboard, to enjoin the defendant Church from further disclosure of this trade secret, to compel the return to the plaintiff of data relating thereto, to enjoin unfair competition in the sale of toys and for an accounting for damages and profits. The case was referred to a master who made a report. He was not required to report the evidence and did not do so. A "Stipulation as to Modification of Master’s Report and Concerning Certain Evidence” was filed by the parties.
Thereafter a motion, as amended, to recommit .the report was denied and an order was made for an interlocutory decree overruling the plaintiff’s exceptions to the master’s
The basic contentions of the plaintiff are (a) that the plaintiff had a trade secret in a process of manufacturing toys from cardboard which the defendant Church wrongfully disclosed to the defendant corporation, (b) that the plaintiff is entitled to relief not only against the defendant Church but also against the defendant corporation, and (c) that the defendant corporation is competing unfairly with the plaintiff in the sale of toys. The plaintiff also makes the subsidiary contentions that it was error to overrule the plaintiff’s exceptions to the master’s report, and to deny the plaintiff’s motion, as amended, to recommit that report.
Findings of the master include the following: The toys made by the plaintiff and the defendant corporation “are animal and cart designs, made of five or six layers of light cardboard, of a grade called newsboard or chipboard, laminated together with glue to a thickness of about one quarter of an inch. They are dipped in a coating substance and decorated in bright colors.” In “general appearance to a casual observer the whole line of toys made by . . . [the defendant corporation] taken together, is similar to the line' made by the . . . [plaintiff].” The plaintiff and the defendant corporation use “very much the same process” of manufacture, though some of the machines used are different.
The defendant Church was employed by the plaintiff from some time in 1924 until April 27, 1929, when he was discharged. During this time the plaintiff “developed its process” of manufacturing toys “by continual experiment, trial and improvement” and “the officers of [the] plaintiff and the defendant Church have worked hard to develop the process.” The defendant Church first called on the defendant corporation about May 9, 1929. On May 16, 1929, he was asked by the defendant corporation to sub
The defendant “Church has described in detail most of this process” of manufacturing toys used by the plaintiff to the defendant corporation, and the defendant corporation “now uses substantially the same process.” The defendant corporation, “although familiar with the elements of the process, never considered combining them in the manner and order . . . [in which they are combined] for the purpose of making toys of the construction and thickness of the toys referred to in this case, fintil Church persuaded them to make toys of his designing.” The defendant corporation “had undoubtedly been aided in economy of design and in avoiding expensive experiments by Church’s experience with . . . [the plaintiff].”
The defendant Church, when he left the employment of the plaintiff, “took no documentary manufacturing data, cost figures, or customers’ lists” and no drawings which were a part of the plaintiff’s files or were “final drawings which had been used by the . . . [plaintiff] for the manufacture of toys.” He kept certain “preliminary sketches of . . . [his] ideas made as he developed them,” which were at his home but which, if they were the property of the plaintiff, were “entirely inconsequential.”
1. The plaintiff had no trade secret in a process of manufacturing toys from cardboard which the defendant Church wrongfully disclosed to the defendant corporation.
The question on this branch of the case is whether the knowledge possessed by the defendant Church of the process of manufacturing toys used by the plaintiff, considered in its entirety, was information secured by him solely through his employment by the plaintiff, which, though he did not take away any documents or drawings
There was no express contract that the defendant Church would maintain secrecy in regard to the process. Compare Peabody v. Norfolk, 98 Mass. 452. The master found that this defendant “did not agree that he would maintain secrecy if his employment should cease,” and that neither he nor the plaintiff “made continued secrecy a condition of his employment.” And no duty on the part of this defendant to maintain secrecy can be implied, in the absence of other facts creating such a duty, from his knowledge that the plaintiff’s officers wished the process to be kept secret or from the fact, as found by the master, “that he agreed that secrecy was desirable for the welfare of the company on which his earnings depended, and in fact urged while he was employed by the . . . [plaintiff] that secrecy be maintained.” Furthermore, this defendant “made no agreement whereby any inventions or improvements in the processes, tools, formulas, machinery or apparatus used for the manufacture of the plaintiff's products, or otherwise relating in any manner to the plaintiff’s business, which . . . [he] might make or assist in making while in the employ of plaintiff, should belong to and be the property of the plaintiff.” See Wireless Specialty Apparatus Co. v. Mica Condenser Co. Ltd. 239 Mass. 158, 162.
The process, considered in its entirety, had not been developed when the defendant Church entered the employment of the plaintiff. He did not learn about it from the plaintiff or solely by reason of his employment, apart from his own knowledge gained through previous experience and the use, in the course of his employment, of his faculties, skill and experience in developing the process. Cases like Essex Trust Co. v. Enwright, 214 Mass. 507, and Aronson v. Orlov, 228 Mass. 1, differ in this respect from the present case. The master found that “Many elements of the process were well known factory operations before the toys were thought of by any one. Much of the process was
The substance of the plaintiff’s contention is that the essential feature of its alleged trade secret is a novel combination of the elements of the process of manufacturing toys from cardboard in the process considered in its entirety. The plaintiff, however, does not suggest that it has a trade secret in any of the elements of the process unless in the ingredients of the paint used or in production costs. But it does not appear that the plaintiff’s paint formula is an essential element in the process or that it has been disclosed or used by the defendant Church. Nor does it appear that the plaintiff’s production costs have been so disclosed or used unless it may be implied that they incited the defendant Church to the use of the process — an insufficient ground for denying to him benefits of the process to which otherwise he would be entitled. See American Stay Co. v. Delaney, 211 Mass. 229, 232. On the findings of the master, if this defendant, unaided, had developed the process in the course of his employment by the plaintiff, he could have carried away and used in his own business, or in that of a later employer, his knowledge of the process, which would have been the product of his knowledge ac
2. The plaintiff does not contend that it is entitled to relief against the defendant corporation by reason of its use of the process of manufacturing toys from cardboard if, as we decide, the disclosure of such process to it by the defendant Church was not wrongful.
3. The defendant corporation, on the facts found by the master, is not competing unfairly with the plaintiff in the manufacture and sale of toys made from cardboard.
The question on this branch of the case is whether the defendant corporation is competing with the plaintiff “for public patronage by adopting intentionally means adapted to deceive the public into thinking that it is trading with the latter when in fact dealing with the former, and thus palming off his goods as those of another.” Summerfield Co. of Boston v. Prime Furniture Co. 242 Mass. 149, 155. The defendant corporation is not precluded from manufacturing and selling goods similar to those manufactured and sold by the plaintiff even if the desire for such goods was created by the plaintiff. But it has not the right to steal “the good will attaching to the plaintiff’s personality, the benefit of the public’s desire to have goods made by the plaintiff.” Flagg Manuf. Co. v. Holway, 178 Mass. 83, 91.
There is no finding that the defendant corporation ever represented that the toys sold by it were made by the plaintiff or that it intended to deceive its customers or the public into so thinking. If there is any actual or probable deception of the public by the defendant corporation it is the result of similarities between its product or the packages in which such product is marketed and the product or packages of the plaintiff.
The findings of the master, however, dispose of any contention that the packages in which the defendant corporation’s product is marketed are calculated to deceive. The toys made by the plaintiff and those made by the defendant corporation are packed in individual cardboard boxes. These boxes are described in detail in the master’s report. His conclusion on all the evidence — which the subsidiary findings do not show to be wrong — is that a “purchaser or merchant seeing the two lines packed in their regular shipping boxes could not possibly confuse them.” New England Awl & Needle Co. v. Marlborough Awl & Needle Co. 168 Mass. 154, Forster Manuf. Co. v. Cutter-Tower Co. 211 Mass. 219, and Grocers Supply Co. v. Dupuis, 219 Mass. 576, therefore, are readily distinguishable. This finding and the further findings that the “toys are ordinarily sold to dealers in their boxes” and that if “the purchaser is a dealer, jobber, mail order house or syndicate . . . such purchaser, if he has ordinary vision and exercises ordinary care, will not be confused by the two lines” also dispose of any question of deception of such purchasers. See Wallingford v. International Manuf. Co.
Both the plaintiff and the defendant corporation “sell principally to jobbers, mail order houses, syndicates such as five and ten cent stores, and dealers. Neither sells at retail.” But though the defendant corporation sells only to dealers and there is and can be no deception of them, there may be wrongful conduct where there is likely to be deception of “the ultimate consumer when the goods are distributed for use in the ordinary course of trade.” Forster Manuf. Co. v. Cutter-Tower Co. 211 Mass. 219, 222. See also George G. Fox Co. v. Hathaway, 199 Mass. 99, 103. The master, however, states that there is no evidence from which he can find that the general public buys “these toys by the trade name or the name of the manufacturer.” He finds that the “toys are ordinarily sold to dealers in their boxes,” and that if “the purchaser is an individual buying a toy at retail and desires to buy a particular toy known to him ... he will not ordinarily be confused, but if the marking happens to be obliterated or hidden and the toy out of the box, he might be confused between a few of the items bearing closest resemblance,” but if “the purchaser knows nothing of either trade name, and has no particular toy in mind, but simply wants a toy made of paper of the construction used in these toys, he would buy the toy of either manufacturer as willingly as the toy of the other.”
The findings of the master show that this limited degree of possible confusion is due to the fundamental nature of the product and not to nonessential resemblances in color, form or markings intended or calculated to mislead purchasers to the belief that the toys manufactured and sold by the defendant corporation were made by the plaintiff. Compare Reading Stove Works, Orr, Painter & Co. v. S. M. Howes Co. 201 Mass. 437; Forster Manuf. Co. v. Cutter-Tower Co. 211 Mass. 219. The “toys are for very young children, and are necessarily for the most part common animal shapes” and the “colors used on the toys are neces
4. There was no error in overruling the plaintiff’s exceptions to the master’s report or in denying the motion, as amended, to recommit this report.
The plaintiff’s exceptions are based on the failure of the master to make certain findings of fact, and on alleged vagueness, ambiguity, indefiniteness and inconsistencies in the findings. We find no error in the overruling of the exceptions. In the plaintiff’s motion, as amended, to recommit the report it sought to have the master ordered to report certain evidence, make additional findings, explain findings and expunge findings. Nothing in the record
It follows that the interlocutory decree overruling the plaintiff’s exceptions to the master’s report and confirming the report must be affirmed, and that the final decree dismissing the bill must be affirmed with costs.
Ordered accordingly.