Grepke v. General Electric Company

• Decision Date: 11 August 1960
• Docket Number: No. 12956.,12956.
• Citation: 280 F.2d 508
• Parties: Henry D. GREPKE, Plaintiff-Appellee, v. GENERAL ELECTRIC COMPANY, a corporation, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

280 F.2d 508 (1960)

Henry D. GREPKE, Plaintiff-Appellee, v. GENERAL ELECTRIC COMPANY, a corporation, Defendant-Appellant.

No. 12956.

United States Court of Appeals Seventh Circuit.

July 1, 1960.

Rehearing Denied August 11, 1960.

Robert Y. Keegan, Quincy D. Baldwin, Fort Wayne, Ind., for appellant.

Albert L. Jeffers, Thomas D. Logan, Fort Wayne, Ind., for appellee.

Before DUFFY, SCHNACKENBERG and KNOCH, Circuit Judges.

SCHNACKENBERG, Circuit Judge.

This action was brought by plaintiff, Henry D. Grepke, an employee of defendant, General Electric Company, a corporation, to recover damages for its alleged appropriation of property rights he claimed to have in a novel method for inserting the balancing weights in the armatures of electric motors. After trial before a jury, a verdict for plaintiff for $5,000 damages was returned. Judgment on the verdict was entered and defendant has appealed. Defendant relies for reversal on the failure of the trial court to grant its motions to direct a verdict, one such motion having been made at the conclusion of the plaintiff's case and another at the conclusion of all of the evidence. Defendant also moved unsuccessfully for a judgment notwithstanding the verdict.

There is competent evidence in the record tending to prove, inter alia, the facts which we now set forth.

Plaintiff had been employed by defendant for over 33 years, including 1940 to 1959, when he worked as an armature balancer in the Finishing Armature Section of the Series or Specialties Motors Department 401, in Division 1, Building 4, on the third floor of defendant's Fort Wayne, Indiana, plant. In 1940, William Wickliffe was a supervisor or foreman in said Division 1.

In 1940 plaintiff conceived what he believed to be a new and novel method for balancing an armature by the way he inserted balancing weights therein, which idea he submitted to defendant in accordance with a suggestion system which it maintained, while a confidential relationship existed between them.

The operation of the suggestion system was as follows: Ideas received found their way to a suggestion office where they were typed up, assigned a number and "acknowledged". That office filed the original typed copy and a duplicate typewritten copy was sent to a secretary of a subcommittee within a particular section or department where the suggestion would be expected to be used. This subcommittee normally consisted of men similar to a cost reduction man, a cost accountant, or a cost man, a time study man, generally a general foreman and an engineer or a planning engineer. The subcommittee in the department normally passed on whether the idea would be used and made the reward or referred the matter to a "central committee" composed of three or four additional men. If the subcommittee did not return the typed duplicate copy to the suggestion office within some several weeks, it was notified, but there were no regulations that prevented the subcommittee from creating its own files or records of ideas. If any "problems" arose, or if the person originating the idea requested it, the invention would then be reviewed by the secretary and a central committee. In some instances inventions would be referred to an "overall committee" at Schenectady, New York, or to a planning engineer or planning people employed in the Fort Wayne plant to improve motors, but no record was kept when that was done. Such planning people would also have access to the original ideas on file upon request, and they sometimes kept a separate file or group of ideas for future reference and no record was kept when this was done. In 1953 all suggestion records were turned over to and kept by the department to which they would have been referred. However, since 1947 it was customary to destroy after six years the suggestion records except a log book.

Plaintiff submitted his idea to the foreman and, under date of November 19, 1940, the committee on suggestions acknowledged receipt thereof and assigned a number to the suggestion. Defendant rejected plaintiff's idea and notified him accordingly. His idea was to insert balancing weights from the top of armatures. Under the old method, balancing weights were inserted from the end of armatures and this method continued until 1953. In that year, foreman Wickliffe determined that a large number of armatures were damaged and rejected as a result of the use of the old method. Wickliffe then assigned the task of finding a different way to balance armatures to one John Pugh, who had been a foreman in training under Wickliffe for some six months in the same Department 401, in Division 1, and later became a "motion time survey specialist".

In April 1953, Pugh submitted a "cost improvement project", consisting of a method of balancing armatures, which was placed in production in 1954.

Pugh, as a witness for defendant, testified that in 1953 he independently invented the method now employed by defendant, that it consisted in inserting the balancing weights from the top instead of the ends of armatures, and that he was unacquainted with Grepke at the time and had no access to or knowledge of Grepke's earlier 1940 suggestion.

Defendant's instruction No. 1, which was given by the court to the jury, reads:

"The Plaintiff Henry Grepke\'s complaint alleges that in 1954, the Defendant General Electric Company in effect utilized a novel method for inserting balancing weights in the armatures of electric motors that was identical to the method previously suggested to it by the Plaintiff in 1940. By its answer, the Defendant General Electric Company denies that the methods are similar but, on the contrary, claims that its present method of so inserting such balancing weights is entirely dissimilar and different from that suggested by the Plaintiff. You are instructed that the burden of proving such methods are substantially equivalent or similar is upon the Plaintiff, and if you find from a fair preponderance of the evidence that such methods are not substantially equivalent or similar and that the Defendant\'s present method differs in material respects from that suggested by the Plaintiff, you should find against the Plaintiff and for the Defendant, General Electric Company."

1. Was Pugh's alleged invention in 1953 an appropriation of plaintiff's suggestion to defendant in 1940? Under proper instructions, to which no objection by either party was made, the jury in effect answered this controlling question in the affirmative. Defendant focused the attention of the jury upon the issue between the parties as to whether plaintiff's method and Pugh's method were substantially similar or equivalent, by defendant's instruction No. 1, and the jury by its verdict for plaintiff thereby found that issue against defendant.

We might add that this court in Smith v. Dravo Corp., 203 F.2d 369, 377, said:

"As a general rule the similarity standing alone is an adequate basis upon which to find misappropriation. Thus, in Hoeltke v. C. M. Kemp Mfg. Co., 4 Cir., 80 F.2d 912, 924, the court said:

"`The similarity of defendant\'s device to that of complainant is strong proof that one was copied from the other\'."

It is important to note that there is no question raised on this appeal as to the new and novel nature of plaintiff's idea or as to the existence of a confidential relationship between plaintiff and defendant. Plaintiff's idea was at all times in possession of defendant from and after 1940. Moreover, Pugh worked for plaintiff's foreman, Wickliffe, he had conversation with that foreman concerning the balancing of armatures, he had access to the files, and he worked in the same building, division and department as plaintiff.

As the court said in Golding v. R. K. O. Pictures, 1950, 35 Cal.2d 690, 221 P. 2d 95, 98:

"* * * Was the plaintiff\'s material copied by the defendant? There will seldom be direct evidence of plagiarism, and necessarily the trier of fact must rely upon circumstantial evidence and the reasonable inferences which may be drawn from it to determine the issue. An inference of copying may arise when there is proof of access coupled with a showing of similarity. * * Where there is strong evidence of access, less proof of similarity may suffice. * * *"

In Bowles v. Zimmer Mfg. Co., 277 F.2d 868, 875, we said, in discussing the defendant's motion for a directed verdict:

"On such a motion, it is the duty of the court to consider the evidence in the light most favorable to plaintiff and to consider as proven facts those which the evidence tends to prove, drawing against the party requesting a directed verdict such inferences as the jury might reasonably draw from the evidence. Johnson v. Gaugh\'s Estate, 125 Ind.App. 510, 124 N.E.2d 704 (1955); Hammerbacher v. Babechenko, 348 Mich. 139, 82 N.W.2d 456 (1957)."

Defendant argues:

"The only way the jury could possibly fix liability on the defendant for the misappropriating and stealing of Grepke\'s suggestion would be to speculate that Pugh somehow and in some manner was told about the Grepke suggestion and utilized the same rather than that he developed his method by his own inventive efforts. Under the established rules of law, such conjecture and speculation cannot be indulged in and in the face of the positive denial of such fact by unchallenged evidence, the Trial Court should have accepted its responsibility and directed a verdict for the defendant as a matter of law."

However, in Lavender v. Kurn, 327 U.S. 645, 66 S.Ct. 740, 90 L.Ed. 916, the court made it clear that a jury may draw...