Dutch Cookie Mach. Co. v. Vrede

• Decision Date: 22 June 1939
• Docket Number: No. 47.,47.
• Citation: 286 N.W. 612,289 Mich. 272
• Parties: DUTCH COOKIE MACH. CO. v. VANDE VREDE.
• Court: Michigan Supreme Court

289 Mich. 272

286 N.W. 612

DUTCH COOKIE MACH. CO.

v.VANDE VREDE.

No. 47.

Supreme Court of Michigan.

June 22, 1939.

Suit by the Dutch Cookie Machine Company against Isaac Vande Vrede for an injunction restraining defendant from using plaintiff's trade secrets or processes.From the decree, the plaintiff appeals and the defendant cross-appeals.

Decree in accordance with opinion.Appeal from Circuit Court, Kent, County; William B. Brown, judge.

Argued before the Entire Bench.

Warner, Norcross & Judd, of Grand Rapids, for plaintiff, appellant and cross-appellee.

Russell Van Kovering, of Grand Rarids, for defendant, appellee and cross-appellant.

NORTH, Justice.

This is a suit for injunctive relief.In the circuit court the relief sought was granted in part and denied in part.Both plaintiff and defendant have appealed.

The bill of complaint alleged that the defendant while an employee of plaintiff, an alleged co-partnership, had obtained knowledge of certain trade secrets and that he is about to engage in a competitive business using those trade secrets in violation of an express agreement existing between plaintiff and defendant.This agreement was entered into September 27, 1933, two years after defendant began working for plaintiff.In part it reads: ‘All discoveries and inventions referred to in the preceding paragraphs, together with all knowledge and information which the employee shall acquire during said employment respecting the business of the employer, shall be held by the employee in trust and in fiduciary capacity for the sole benefit of the employer, its successors, and assigns, and the employee agrees not to divulge or publish, or authorize anyone else to divulge or publish, either during his term of employment or subsequent thereto, knowledge of said discoveries or inventions, or any technical or other information acquired in the course of his employment under this agreement, or any confidential information concernig the employer's business that may be thus acquired.’

Plaintiff's business is that of developing and manufacturing machinery and cookie rolls to be used by bakers in making cookies and like products.Defendant continued in plaintiff's employ after signing the agreement until October 2, 1937, when he quit.For several days prior to leaving, defendant was engaged in completing arrangements for a business which would compete with plaintiff in the manufacture of bronze cookie rolls to be used on cookiemaking machines, including the machine made by plaintiff as well as others.Plaintiff claims that under the agreement of September 27, 1933, defendant is precluded from engaging in the business of making cookie rolls in competition with plaintiff, becuase the information now possessed by defendant regarding the making of cookie rolls was all obtained while he was employed by plaintiff and the agreement prevents defendant from using this information in a competitive business.The details of plaintiff's claim as to secret processes used in its business are outlined in the trial judge's opinion as follows: ‘Plaintiff claims that the method of mixing the bronze metal for casting the cookie rolls, the method of assembling and manufacturing the roll from segments rather than from continuous tube, the method of mixing the sand in the foundry for the casting of the parts for the rolls, the method of using smoke upon the sand moulds and cores for the purpose of obtaining smooth surfaces to the castings, the method of assembling the segments and pieces which finally constitute the finished roll, the aligning of such pieces and the soldering of such pieces of bronze together and the tightening of bolts by means of nuts which extended lengthwise through the center of the manufactured roll,-are all unusual and secret processes unknown to the trade and unknown to manufacturing concerns other than that of plaintiff.’

As against plaintiff's claims defendant denies he has violated the contract and asserts that the relief sought by plaintiff should not be granted for the reason that the processes which enter into the making of cookie rolls are matters of common knowledge to the trade and are not in the nature of trade secrets.Further, that the statute, Comp.Laws 1929, Secs. 16667-16672,Stat.Ann. 28.61-28.66, of this state prevents entering into a contract which will deprive defendant of the right to engage in any business in which he may be skilled.

After having heard the testimony of the respective parties the circuit judge found that only three of the processes used by the plaintiff in the manufacture of its rolls were trade secrets, viz., the secret formula of the component parts of the bronze used; the secret formula for mixing the sand used in the moulds in casting the bronze parts; and the method of smoking the moulds as developed by plaintiff.Injunctive relief was decreed restraining the defendant from using any of these trade secrets or processes.It is from this restricted injunctive relief that plaintiff has appealed, claiming that it should have been granted broader injunctive relief in the particulars about to be noted.

Plaintiff claims that in its business a jig of a peculiar type especially suited to plaintiff's business has been developed and has been kept as a trade secret.This is a device used to hold in place material being worked upon and being so held that it may be machined accurately.It would serve no beneficial purpose to detail the testimony pro and con upon the issue presented by defendant's claim that there was nothing novel or secret about this particular jig.Defendant procuced as witnesses two machinists of years of experience and the purport of their testimony is that there is nothing secret, extraordinary or unusual in the character of the jig which plaintiff claims it has developed in the course of its business but instead it only serves a purpose of a character commonly known to manufacturers and their machinists.We find nothing in this record that would justify reversal of ithe circuit judge's determination in consequence of which plaintiff was denied injunctive relief in this particular.

As disclosing the character of other claims made by plaintiff, we quote the following from its brief:

‘Appellant manufactures a cookie die roll, consisting of a great many identical cast segments, which are assembled into a cylinder by means of steel rings tied together by long bolts with nuts on the ends thereof.The entire roll is trued up into a perfect cylinder by the tightening of the nuts, which operation (to secure a true cylinder) is extremely difficult, if not impossible, without specific information as to which nuts to tighten and the application of a hammer to various parts of the roll to bring about a springing into true rather than out of true.

‘In order to bring about the release of the cookie dough from the individual dies in the roll, Appellant has caused the edges of the dies to be engraved at a slant, which slant varies, depending upon the texture of the dough for which the roll is designed.

‘After the cookie die roll manufactured by Appellant is assembled, the individual cast segments are joined together by electric welding.Appellant has learned at what degree of heat and at what distance from the metal the welding must be done to bring about the best results.’

The circuit judge found that the method used by plaintiff in tightening bolts incident to an attempt to true into a perfect cylinder the cookie roll being constructed, was not a trade secret.The conclusion seems almost self evident, but aside from that this finding was sufficiently sustained by the testimony of an engineer of years of experience who as a witness said in substance that there was nothing unusual in loosening and tightening bolts to obtain a complete or perfect circle.The circuit judge of necessity further held that there...