FMC Corp. v. Taiwan Tainan Giant Indus. Co., Ltd.
| Decision Date | 06 March 1984 |
| Docket Number | D,No. 820,820 |
| Citation | 730 F.2d 61 |
| Parties | FMC CORPORATION, Appellant, v. TAIWAN TAINAN GIANT INDUSTRIAL CO., LTD., and Frederick G. Fierch, Appellees. ocket 83-7945. |
| Court | U.S. Court of Appeals — Second Circuit |
Mari M. Gursky, Philadelphia, Pa. (Paul H. Haagen, Dechert, Price & Rhoads, Philadelphia, Pa., Alexander C. Cordes, Phillips, Lytle, Hitchcock, Blaine & Huber, Buffalo, N.Y., of counsel), for appellant.
Richard T. Sullivan, Buffalo, N.Y. (Joseph G. Makowski, Albrecht, Maguire, Heffern & Gregg, Buffalo, N.Y., of counsel), for appellees.
Before OAKES and CARDAMONE, Circuit Judges, and BONSAL, District Judge. *
Plaintiff, FMC Corporation (FMC), has taken an expedited appeal from a Memorandum and Order of the United States District Court for the Western District of New York dated October 27, 1983 (John T. Elfvin, Judge). Judge Elfvin denied FMC's request for a preliminary injunction to protect against disclosure of its alleged trade secrets. We reverse and remand. In addition, we order that the case be set for trial as soon as possible and that discovery be conducted in an expedited manner.
FMC manufactures and distributes formulated carbofuran, an agricultural insecticide, under the trade name Furadan. Appellee Frederick G. Fierch was an employee at FMC who, from 1975 until his employment was terminated in 1981, became familiar with the processing and distribution of Furadan as a Furadan shift supervisor and later as FMC's Supervisor of International Sales. While at FMC Fierch signed an "invention agreement" in which he promised not to divulge information learned while at FMC.
In 1983, Fierch allegedly became an employee of appellee Taiwan Tainan Giant Industrial Co., Ltd. (TGI), as Marketing Manager. 1 One of his responsibilities was to be the marketing of TGI's brand of carbofuran. In a letter to prospective TGI customers, Fierch promised to apply his experience in manufacturing of carbofuran gained at FMC in his new job at TGI.
FMC sought a temporary restraining order and later a preliminary injunction preventing Fierch from using his knowledge of FMC's trade secrets relating to Furadan. In particular, FMC alleged a breach of its confidentiality agreement, tortious interference with contract on TGI's part, misappropriation of trade secrets, unfair competition, and breach of the fiduciary duty of loyalty.
There are three aspects of carbofuran manufacture and distribution which FMC asserts are protectable trade secrets. Carbofuran, which is created in a patented process not at issue here, is converted into "dustless base carbofuran" by FMC as part of the process by which the dangerous chemical is made into a commercially useful product. This dustless base is then shipped to various wholesale customers, who, pursuant to confidentiality agreements with FMC, convert the dustless base into a commercially acceptable product in their own "formulator" plants. FMC wishes to enjoin Fierch and TGI from making use of three distinct trade secrets: the processes used to make dustless base carbofuran, the processes used in the formulator plants, and the names of Furadan customers allegedly retained by Fierch.
The district court found, for purposes of preliminary injunctive relief: (1) that the invention agreement was enforceable; (2) that the process of converting the dustless base carbofuran into a commercially usable product was a trade secret; (3) that the process of making the dustless base carbofuran, as well as customer lists, are not protectable trade secrets; and (4) that the protectable formulator information is not in fact protected under trade secret laws because it is currently protected by patent in the United States. We can agree with only the first two of these findings. 2 Applying the standard for preliminary injunctive relief, Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir.1979), we find that appellant has demonstrated both irreparable harm and likelihood of success on the merits, and we therefore order that the district court should issue the preliminary injunction.
FMC's formulator process would appear to be a paradigmatic trade secret under New York law, consisting as it does of formulae for compounds, processes of manufacturing, methods for treating material, and equipment specifications. See Minnesota Mining & Manufacturing Co. v. Technical Tape Corp., 23 Misc.2d 671, 192 N.Y.S.2d 102, 112-13 (N.Y.Sup.Ct.1959), aff'd, 15 A.D.2d 960, ...
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