Central Pharmacal Co. v. Salb

• Decision Date: 29 March 1938
• Docket Number: 15470.
• Citation: Central Pharmacal Co. v. Salb, 106 Ind.App. 495, 13 N.E.2d 875 (Ind. App. 1938)
• Parties: CENTRAL PHARMACAL CO. v. SALB et al.
• Court: Indiana Appellate Court

13 N.E.2d 875

106 Ind.App. 495

CENTRAL PHARMACAL CO. v. SALB et al.

No. 15470.

Appellate Court of Indiana, in Banc.

March 29, 1938

Thos H. Branaman, of Brownstown for appellant.

Montgomery & Montgomery, of Seymour, Baker, Richman & Sharpnack of Columbus, and Pickens, Gause, Gilliom & Pickens, of Indianapolis, for appellees.

CURTIS Judge.

The appellant's action in the trial court was tried upon its second amended complaint in two paragraphs alleging in substance that it was the owner of a trade secret of which the appellee Salb, as its employee, had acquired knowledge and was intending to use it and to divulge the secret to others in violation of his obligations to the appellant and to its great and irreparable damage unless the injunction sought by the second amended complaint be granted. Each paragraph was answered in general denial.

Trial was had before the court, and upon proper request a special finding of facts was made and conclusions of law stated. The conclusions of law are as follows: "The court concludes as a matter of law:--First, that the law and the equity of the case is not with the plaintiff. Second, that the plaintiff is not entitled to recover against the defendants or either of them." The judgment was in accordance therewith.

The appellant seasonably filed a motion for a new trial which was overruled and this appeal then prayed and perfected. The errors assigned are that the court erred in each of its conclusions of law and in the ruling on the motion for a new trial. The causes or grounds of the motion for a new trial are that the decision of the court is not sustained by sufficient evidence and is contrary to law.

The finding of facts is not lengthy, and we set it out in full as follows:

"1. That the plaintiff, The Central Pharmacal Company is now and for more than fifteen years continuously last past has been a corporation duly organized and existing under the laws of Indiana, with its place of business at Seymour Indiana. That it is and has been during all of that period engaged in the business of manufacturing, compounding and selling drugs, medicines and chemical preparations to physicians and druggists throughout a considerable territory of the United States.

"2. That during all of the above period it was engaged in chemical research and experimental work in the discovery, development and perfection of new drugs and chemical compounds, and in such work employed skilled chemists and assistants and expended large sums of money for that purpose. "3. That on the 8th day of August, 1921, the plaintiff employed the defendant Oscar G. Salb, who was a skilled chemist. That under the terms of his employment, said defendant was to engage for plaintiff generally in research work in chemicals and remedies, to analyze chemicals and drugs and make the labels for the same conform to the Pure Food and Drug Acts of the United States and the various states of the Union in which plaintiff was doing business. That he was to aid in the development and perfection of new drugs and chemical compounds for the use and benefit of plaintiff. That nothing was said specifically between said parties as to the right and ownership in any new chemical compound which might have been discovered and perfected by said defendant while he was in the employ of the plaintiff either full time or part time.

"That defendant was continuously in the employ of the plaintiff from August 8, 1921, to about June 1, 1932, except that he left said employment in October, 1929, for a short period, when he was reemployed generally to assist in such research work for the plaintiff and to aid it generally as its chemist. That during all of said time the defendant Salb was engaged by other persons, as a chemist, and with the full knowledge of the plaintiff.

"4. That from the * * * day of October, 1929, to the time he left the employ of the plaintiff he was no longer occupying the premises of the plaintiff and was maintaining and occupying his own quarters in a building separate and apart from that of the plaintiff and during all of said latter period was engaged in part time work only for the plaintiff, and was during said time maintaining a separate laboratory and engaged in work for himself and others.

"5. That during the period of said employment, and as a part of defendant's said employment, the plaintiff and the defendant, Salb, made research and study of a compound and remedy for syphilis, to be used either orally or intra-muscularly by hypodermic injection. That a formula for a compound to be used intra-muscularly was developed and was attempted to be used and experiments were made with it, but it was unsuccessful and it was learned by the parties that a similar article was already patented and claimed by another person and the same was abandoned by the plaintiff and the defendant.

"That later and during said employment the defendant, Salb, as a part of said employment by plaintiff, worked in collaboration with officers and employees of plaintiff upon the development of a chemical compound for the treatment of syphilis orally and used in said work chemicals, materials, supplies and equipment of the plaintiff provided therefor; that in the course of said employment and as a result of his said work, defendant, Salb, prepared and delivered to plaintiff quantities of a chemical compound or compounds for such purpose and use and which are each and all within the description contained in plaintiff's second amended Exhibit A to Plaintiff's complaint herein.

"That the principal chemical ingredients of the same are Bismuth, Iodine and Hexamethylenetetramine is the solvent. That the description of and formula for said compound has been on file with the Court and kept away from the public as a trade secret, but the Court finds that the same is not a secret, but was and is a copy in all practical respects as a formula developed by a German chemist in 1893. That the formula, process for and description of said compound, which it is claimed the defendant Salb perfected for the use and benefit of the plaintiff, is described and set out in the second amended Exhibit A to plaintiff's complaint herein as furnished to the Court, and which said exhibit at the request of the plaintiff is sealed by the Court and filed in the office of the clerk of this court subject to such further use and disposition as the Court may order in the future in the interests of the parties hereto.

"6. That said formula for said compound was not known to the plaintiff during the period of employment of said Salb and was not known by it at the time of the commencement of this action. That said formula is an analysis of the compound 'Bisiodide' which was put upon the market by said Salb after he left the employ of the plaintiff.

"7. The Court finds that said defendant Salb applied for a patent upon the said formula process and compound so developed by him in March, 1932, in the Patent Office of the United States under the trade name 'Bisiodide.' That said application is still pending. That said process was not perfected by him prior to June, 1932. "8. That the plaintiff has developed a formula and compound similar in all respects and to all practical purposes as that developed by said defendant. That the exact proportions of the content of the compound developed by plaintiff is not known by the Court.

"Nor is the method of compounding the same known to the Court. That the plaintiff has put its compound on the market under the

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