GTI corporation v. Calhoon
| Decision Date | 28 November 1969 |
| Docket Number | No. 68-207.,68-207. |
| Citation | 309 F. Supp. 762 |
| Parties | G T I CORPORATION, Plaintiff, v. Rollin G. CALHOON, Harold L. Davis, Robert G. King, Metpar Manufacturing, Inc., Defendants. |
| Court | U.S. District Court — Southern District of Ohio |
COPYRIGHT MATERIAL OMITTED
N. Hart Cohen, Steubenville, Ohio, Walter T. McGough, Charles C. Cohen, and Roger C. Wiegand, of Reed, Smith, Shaw & McClay, Pittsburgh, Pa., for plaintiff, Patrick E. Dressler and John S. McGeeney, of Cummings & Lockwood, Stamford, Conn., of counsel.
Lyman Brownfield, Columbus, Ohio, for defendants Calhoon, Davis, King and Metpar Mfg., Inc.
FINDINGS OF FACT, CONCLUSIONS OF LAW, JUDGMENT
The Court, having considered the evidence presented at the trial of this action and the briefs and arguments of counsel, makes the following Findings of Fact and Conclusions of Law:
FINDINGS OF FACT
1. Plaintiff GTI Corporation ("GTI") is a Rhode Island Corporation with its principal place of business at Meadville, Pennsylvania. Defendants Calhoon, King and Davis are individuals residing in Nelsonville, Ohio and defendant Metpar Manufacturing, Inc. is an Ohio Corporation with its principal place of business at Nelsonville, Ohio.
2. GTI acquired a plant which was nearing obsolescence by industrial standards, at Hadley, Pa., from Beal Brothers Co., Inc. in September of 1965.
At the time of said acquisition, the equipment at the Hadley Weld Plant was inferior to the machinery of Sylvania and further modifications were required to render the equipment capable of producing the types of welded metal products manufactured by Sylvania. GTI acquired the Hadley Weld Plant with a view to converting the equipment to produce dumet-to-dumet welded leads and moly-to-dumet welded leads so that it could compete with Sylvania in this field.
3. Defendants, Calhoon, Davis and King were employed by plaintiff respectively in March and September, 1965 and January, 1966. Each individual defendant left the employ of Sylvania Electric Products Co. in order to work for plaintiff.
4. Plaintiff employed defendants Calhoon, Davis and King in the respective capacities of Plant Manager, Project Engineer and Chief Engineer.
5. Plaintiff employed defendants Calhoon, Davis and King for the purpose of bringing Sylvania capabilities in the manufacture of welded stud leads to plaintiff's Hadley Plant.
6. Prior to employment by plaintiff, defendants Calhoon, Davis and King had been employed by Sylvania 19, 12 and 15 years respectively. Before that, defendant Calhoon had been employed by General Electric for eight years and defendant Calhoon, while at Sylvania, had discovered the process now used by plaintiff and the industry for welding molydumet stud leads.
7. In early March, 1965 while defendant Calhoon was employed by Sylvania, Marshall Smith, General Manager of plaintiff's Saegertown division wrote Calhoon offering him employment. The letter offering employment did not reveal that plaintiff would require Calhoon to execute an Employment Agreement as a condition of employment. In reliance upon plaintiff's offer, Calhoon gave Sylvania notice that he was terminating his employment. When Calhoon reported for work at the Saegertown plant on March 22, 1965, he was informed, for the first time, that he was required to execute an Employment Agreement.
8. On March 22, 1965 defendant Calhoon signed an Employment Agreement which so far as is pertinent provided:
9. In September of 1965, Calhoon was assigned as Plant Manager of the Hadley Weld Plant and was given the responsibility of renovating the equipment at said Plant and bringing the equipment up to Sylvania standards.
10. To assist in improving the weld machine capabilities of the Hadley Weld Plant, Calhoon caused GTI to employ defendant Harold L. Davis on September 20, 1965 as Project Engineer. Davis signed an Employment Agreement on that date which provided, among other things, that "I will * * * promptly disclose and assign to GTI * * * any and all ideas, improvements and inventions, patentable or unpatentable, which I have made or may hereafter make, alone or jointly with others, relating to or suggested by GTI's business * * * between the date of my employment by GTI and the date of termination of my employment * * *."
11. Upon Calhoon's recommendation, GTI hired defendant Robert G. King as Manager of Engineering for the Hadley Weld Plant in order to obtain his knowledge and experience in the renovation of machinery that would produce welded leads of the type produced by Sylvania. King signed an Employment Agreement on January 3, 1966 (the form of which is identical to that executed by Davis) and assumed his duties on that date.
12. Effective March 29, 1968, defendants Calhoon, Davis and King terminated their employment with plaintiff as the result of a management decision by the plaintiff overruling defendant Calhoon as Plant Manager with respect to the position and responsibilities of defendant Davis.
13. During their employment by plaintiff, defendants Calhoon, Davis and King built the Hadley welding machines, which were the same basic machines as those used by Sylvania, to equal the Sylvania capability, and in the course thereof continued their learning process with respect to the design and use of stud lead welding machines.
14. During their employment by plaintiff the individual defendants who were hired by plaintiff from its competitor Sylvania to introduce Sylvania know-how into the Hadley plant did not acquire any confidential information or trade secrets from plaintiff with respect to the design, manufacture or use of stud lead welding machines. The individual defendants brought their knowledge and experience acquired during their employment by Sylvania to plaintiff's Hadley Weld Plant. During the two and one-half years of their employment with plaintiff, defendants Calhoon, King and Davis successfully renovated between fourteen and sixteen Hadley Plant weld machines to meet Sylvania capabilities. While employed by plaintiff the individual defendants did not draft specific plans or blue prints or conduct experiments for the development of the Metpar machine.
15. On April 1, 1968 the individual defendants, commencing operations as Metpar Manufacturing, Inc. entered the business of manufacturing to buyer's specifications welded stud leads similar in specification and identical in purpose to the leads manufactured by the plaintiff, Sylvania and others.
16. After March 29, 1968 the defendants, working sixteen hours a day seven days a week designed and built a percussive stud welding machine for the purpose of their business and began to successfully produce welded stud leads about June 11, 1968.
17. The Metpar welding machine which the defendants designed and built after leaving their employment with plaintiff contained some features which were improvements over the machines used by plaintiff.
18. The defendants' machines were designed primarily by defendant King and built by defendants Calhoon, Davis and King.
19. During the time of their employment by plaintiff the individual defendants did not draft specific plans or detailed blue prints embodying the features of the Metpar weld machine. The features of the Metpar machine were designed and the machine built after the individual defendants terminated their employment with plaintiff.
20. The individual defendants had a total of 59 years experience in the field of stud lead welding machines as a result of their previous employment with Sylvania, General Electric and others. In designing and building the Metpar machine they relied upon their general knowledge and experience and did not receive the knowledge necessary to design and build the machine as a result of their employment with plaintiff.
21. The individual defendants did not conceive, develop or design the features of the Metpar machine while they were employed by plaintiff and did not fail to disclose to plaintiff any material information acquired or developed by them while in plaintiff's employ.
22. The stud lead welding machine designed and built by defendants is similar to such machines in common use throughout the industry originally patented and now in the public domain and does not utilize any design or process secret to plaintiff or in which plaintiff has any exclusive or proprietary interest.
23. Upon termination of his employment with plaintiff, defendant Calhoon took with him but later returned to plaintiff, a telephone directory containing the names and telephone numbers of customers. The customers in the directory were well known in the semiconductor industry and defendant Calhoon was acquainted with these customers through his association with Sylvania. The information contained in the telephone directory was in the public domain and was not secret and proprietary to plaintiff.
In this action plaintiff seeks an injunction restraining defendants Calhoon, King and Davis, its former employees, from utilizing trade secrets...
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