Opinion
No. 48/710.
08-16-1921
CAMERON MACH. CO. v. SAMUEL M. LANGSTON CO. et al.
Merritt Lane, of Newark, and A. V. Beeken, of New York City, for complainant. Bleakly & Stockwell, of Camden, and C. W. Fairbank, of New York City, for defendants.
Bill for injunction by the Cameron Machine Company against Samuel M. Langston Company and others. Bill dismissed.
Merritt Lane, of Newark, and A. V. Beeken, of New York City, for complainant.
Bleakly & Stockwell, of Camden, and C. W. Fairbank, of New York City, for defendants.
FOSTER, V. C. Complainant seeks an injunction to restrain the defendant Sieg from divulging secret features of slitting and rewinding machines designed and manufactured by it, and to restrain the defendant company and Samuel M. Langston individually from using any information respecting such secret features which they, or either of them, obtained from Sieg.
The two companies have been engaged for years in the manufacture and sale of slitting and rewinding machines, used principally by paper manufacturing plants. The manufacture of such machines is the only business of complainant, and the manufacture of such slitting and rewinding machines constitutes only about one-third of the paper machinery manufactured by the defendant company.
From time to time each company has placed upon the market new and improved types of their machines. From 1915 to 1919 complainant had in its employ an erector named Schatten; and about October 1, 1919, Schatten entered the employ of the Langston Company. The defendant Sieg was employed by complainant from March, 1917, until May. 1920, when he also entered the employ of the Langston Company.
The bill charges that the Langston Company, on learning from Schatten after he entered its service that Sieg had designed for complainant an improved Type 18 machine, and also having later learned from Schatten that Sieg was engaged in designing for complainant a new machine which it intended to manufacture as its Type 14, induced Sieg to leave the services of complainant and to enter into the employ of the Langston Company. That the Langston Company employed Sieg for the purpose of obtaining from him knowledge of the secret features which complainant had embodied in the design for the improved Type 18, and particularly for the purpose of obtaining from him knowledge of the secret features which complainant had adopted in its design for Type 14.
The bill further charges that Sieg, in violalion of his duty to complainant, disclosed to the defendant company the secret features; of Types 18 and 14, and that defendants thereupon designed and manufactured a new slitting and rewinding machine known as Type D-A, in which they copied and made use of all the secret features which complainant had placed in its Types 18 and 14, with the result that defendants' Type D-A is alleged to be similar to the machines designed by complainant and dissimilar to the machines previously designed and manufactured by the Langston Company.
Defendants' answers deny each and every one of these allegations, and in addition they assert that there are no secret features in either Type 18 or 14; that most, if not all, of the so-called secrets are old in the art; that most, if not all, of them were used in the Langston machines, and in machines manufactured by others, years before either Type 18 or 14 were designed by the complainant; that Sieg did not have and did not divulge any knowledge of any secret features of the Cameron designs or machines; and that there is no similarity in design or detailbetween Langston's Type D-A, and Cameron's Types 18 and 14. And they further assert that the complete designs for complainant's Types 18 and 14 were not in existence when Sieg left Cameron's employ; that the exhibits used by complainant to establish such similarity are fictitious designs, made solely for the purposes of the case; and made after complainant became possessed of a copy of the completed design for Langston's Type D-A.
These allegations present two questions for determination:
(1) Did complainant possess and embody in its improved Type 18 and in its' design for Type 14 any secret features or elements for the manufacture of a slitting and rewinding machine?
(2) Did the defendants Langston and the Langston Company obtain knowledge of these secret features or elements from Sieg under such circumstances that they should be enjoined from the use of it?
Considering these questions together, it appears from the record, which is very voluminous, that complainant has attempted to establish an affirmative answer to both questions, principally (1), by the testimony of Schatten, (2) by the circumstances attending the employment of Sieg, and (3) by detailed comparison of every part of its designs with those of the defendant company.
Schatten it appears was not loyal to defendant company while in its employ, for he induced one of Langston's customers to purchase a Cameron machine, and after he left Langston's employ he received from the Cameron Company a present of about $90, which defendants contend was his commission for effecting this sale. On the hearing his testimony was shown to be in conflict with statements he made in his affidavit attached to the bill respecting blueprints of the Cameron Type 14 design, which he stated he had seen in Sieg's possession shortly after Sieg had entered Langston's employ, and which admittedly were not made and could not be made from the sketches for this design in the condition these sketches were in when Sieg left Cameron's employ. The effort was made, through Schatten, to show that Sieg had told Schatten in October, 1919, that he was then working for Cameron on the design for Type 14, while the fact is that work on this design was not begun until the following December or January. Further comment on or reference to Schatten's testimony need not be made.
The circumstances attending the employment of Sieg by the Langston Company are: That the subject of Sieg's entering Langston's employ was first broached to him by Schatten in October, 1919, but nothing came of it. In March and April, 1920, Langston's chief designer being ill, and desiring to reorganize their designing department, and learning from Schatten and others of Sieg's ability and experience, negotiations were opened with him which led to his employment by Langston on May 10, 1920, as the second in charge of its designing department at a weekly salary of $80. Sieg had been receiving from the Cameron Company about $60 weekly. Sieg, it appears, has been a machine designer since 1905, and designed and studied in actual operation slitting and rewinding machines and other machinery connected with paper manufacturing in various places in Germany and Sweden, until 1913, when he came to this country. Since then he has been engaged in similar work here, and in 1917 he entered complainant's employ. Since 1907 he has been collecting photographs, illustrations, and advertisements of machinery, including slitters and rewinders, manufactured here and abroad, including those manufactured by the Langston and Cameron Companies.
In October, 1919, Schatten told Sieg that Langston contemplated building a heavy type of rewinder, and Sieg expressed to Schatten his willingness to enter Langston's employ, but received no offer to do so until the end of March following. From about January, 1920, until he left Cameron in May, he was engaged on the design for Type 14 which combined the good features of Cameron's Types 9 and 18, both of which had been marketed for some time, and he had practically completed the sketches for this design a day or two before leaving Cameron. He gives as his reasons for leaving Cameron that his work there confined him to one line; that he desired more diversified work, and Langston offered him more salary than Cameron was paying him.
On entering Langston's employ Sieg was placed at work upon the design for Type D-A, and completed his sketches of this work in June or July following. Complainant contends that it was impossible for Sieg to have completed this design in such a short time without photographs, blueprints, or copies of its design for Type 14, or from his recollection of the details of this design, but there is no proof that any such photograph or blueprints then existed. Defendants claim that, considering Sieg's ability and experience, and the assistance he received from Langston, with 35 years' experience in the manufacture of such machines, the time he used in designing D-A was much too long. And it also appears that part of Sieg's work on this design bears date July 6, and that a more completed drawing of the design bears date August 16. From the testimony of Mr. Johnstone, the chief designer of the Cameron Company, it appears that the final and complete drawings for Type 14 were not finished until August, 1920, and were then completed only for the purpose of this case.
It further appears that Sieg's ability and experience qualified him to design slitting and rewinding machines without assistancefrom either Cameron or Langston, and that in the designs he prepared for both companies he embodied many features which had been in use in machines manufactured by others in this country and abroad.
It has been the practice of both companies and of other manufacturers of such machines to give publicity to every feature of their machines by circularizing the trade with advertising matter, illustrated by photographs or cuts, of the various types of their machines, and the machines are so large and their construction and parts so open to inspection that it is conceded any one could easily copy every feature of them, and readily note the effectiveness of their operation; and this apparently has frequently been done by both companies and by other manufacturers, and not always with due regard to those features that were protected by patents.
A mass of exhibits and exhaustive testimony have been placed in the record establishing this appropriation of ideas and features by one manufacturer from another, and showing in the most minute detail the similarity or dissimilarity between complainant's Types 18 and 14 and defendant's Type D-A, and between them and other slitting and rewinding machines manufactured by them and by others.
From the mass of evidence it appears that the structural features of these machines are old and varied, and none is exactly the same in the Langston and Cameron machines, and most of them were adopted by Cameron, Langston, or Sieg as a result of their experience, and some of them were apparently appropriated from machines of other manufacturers.
Among such features common to machines of this type, which some manufacturers have abandoned, and which others have retained, are: The A-frame design; the location of the cutting mechanism; the style, size and location of the drums or pressure rolls, with or without helical or circumferential grooves; the location and entity of the power unit; the use and location of an I-beam; the use of one or more base plates; the rewind shafts and their method of suspension; the use of a shear cutter like the Koegel, instead of a score cutter; the use of a Hilliard clutch instead of a core clutch; and the use of a Hyatt bearing in place of others. The list could be continued indefinitely, showing detailed differences in the styles, sizes, and location of the various features of the machines.
The result of the comparison thus made between the designs of the complainant's machines and those of the defendant company are so contradictory and unsatisfactory that it cannot be said with certainty that there are any secret features or elements of complainant's designs for Types 18 and 14 which Sieg appropriated and divulged to the Langston Company or to Langston, and which are used or embodied in Langston's Type D-A.
The existence of any such secret feature or element is not only not clearly and satisfactorily established by complainant's proof, but the existence of any such feature or element is denied by Sieg and Langston and by other witnesses. If any such secret feature exists there is no proof to show that Sieg knew of it or divulged it to the Langston Company or to Langston; while defendant's evidence affirmatively shows that Sieg never knew of such secrets, and never made disclosure of any such secret to any one. There is no proof to support complainant's contention that Langston knew when he employed Sieg that Cameron was designing a new machine; nor that beyond the fact that Sieg knew he was engaged in designing a new type of machine for Cameron is there anything to show that Sieg obtained knowledge of Cameron's secrets, if he had any.
I am at a loss to understand what value these alleged secret features of Type 14 would be to Langston in designing and manufacturing its Type D-A, which the proofs show to be the largest sized, highest speed, heavy duty machine ever built, while Type 14 is a much smaller, medium-sized machine, intended for a different grade of work.
For the purposes of the case I have assumed that the relations between Sieg and the complainant were so confidential as to raise an implied contract which prevented him from divulging any information he obtained of complainant's trade secrets as a result of this relation. Such a "trade secret" has been defined to be:
"A plan, or process, tool, mechanism or compound, known only to its owner and those of his employees to whom it is necessary to confide it." 22 Cyc. 842, par. 6.
And the cases in this state are in accord, in holding that a manufacturer whose goods are made under an unpatented secret process is entitled to protection by injunction against the divulging of his secret in a proper case. Stone v. Graselll Chemical Co., 65 N. J. Eq. 758, 55 Atl. 736, 63 L. R. A. 344, 103 Am. St. Rep. 791; Solomon v. Hertz, 40 N. J. Eq. 400, 2 Atl. 379; Taylor Iron Co. v. Nichols, 70 N. J. Eq. 541, 61 Atl. 946; Vulcan Detiuning Co. v. American Can Co., 72 N. J. Eq. 387, 67 Atl. 339, 12 L. R. A. (N. S.) 102; Pomeroy Ink Co. v. Pomeroy, 77 N. J. Eq. 293, 78 Atl. 698; Globe Ticket Co. v. International Ticket Co., 90 N. J. Eq. 605, 104 Atl. 92, 106 Atl. 891; International News Service v. Associated Press, 248 U. S. 215, 39 Sup. Ct. 68, 63 L. Ed. 211, 2 A. L. R. 293.
These cases also adopt the principle that employees of one having a trade secret, who are under an express contract, or a contract implied from their confidential relationship to their employer, not to disclosethatsecret, will be enjoined from divulging the same to the injury of their employer, whether before or after they have left his employ, and that other persons who induce the employee to disclose the secret, knowing of his express or implied contract not to disclose the same, will be enjoined from making any use of the information so obtained.
Complainant's proofs fall far short of bringing the case within the application of this principle, as they fail to establish in complainant the trade secrets it claims; and, if such secrets were held to be established, the proofs further fail to show that Sieg had knowledge of them: that he divulged this knowledge to Langston, or to any one connected with the Langston Company; and that Langston, or his company, had made, or were making, any use of the information so obtained.
I will advise that the bill he dismissed.