Harris Manufacturing Company v. Williams

• Decision Date: 12 August 1958
• Docket Number: Civ. A. No. 704.
• Citation: 164 F. Supp. 626
• Parties: HARRIS MANUFACTURING COMPANY, Plaintiff, v. Glenn J. WILLIAMS, and Arkansas Parquet Flooring Company, an Arkansas Corporation, Defendants.
• Court: U.S. District Court — Western District of Arkansas

164 F. Supp. 626

HARRIS MANUFACTURING COMPANY, Plaintiff, v.Glenn J. WILLIAMS, and Arkansas Parquet Flooring Company, an Arkansas Corporation, Defendants.

Civ. A. No. 704.

United States District Court W. D. Arkansas, Hot Springs Division.

August 12, 1958.

Owens, McHaney, Lofton & McHaney, Little Rock, Ark., Bryant & Brandt, Johnson City, Tenn., for plaintiff.

McMath, Leatherman & Woods, Little Rock, Ark., for defendants.

JOHN E. MILLER, District Judge.

Originally this case was tried to the court without a jury on October 28, 29, and 30, 1957, and on December 31, 1957, the court filed its written opinion and judgment was rendered thereon.Briefly stated the court found that plaintiff's trade secrets with regard to its domestic mastic and the V-3 assembly machine had been unlawfully appropriated and used by the defendants, Glenn J. Williams and Arkansas Parquet Flooring Company, an Arkansas corporation.

The court enjoined said defendants, their agents, successors, servants, and employees from further use of two assembly machines then in the possession of the defendant corporation and from the use of any assembly machines based in substantial part upon plaintiff's V-3 assembly machine.The court further enjoined the defendants from further use of the A.P. No. 7 mastic then being used by the defendant corporation and from the use of any mastic based in substantial part upon plaintiff's domestic mastic.The judgment further provided that the case would be set for hearing on the question of the damages, if any, to which plaintiff was entitled, and upon the question of proper disposition of the defendant corporation's assembly machines.See, Harris Manufacturing Co. v. Williams, D.C.W.D.Ark., 157 F. Supp. 779, 788-789.

The case was set for hearing on July 29, 1958, and at the conclusion of the hearing the court took the case under advisement pending receipt of briefs from the parties and the deposition of a witness concerning certain records at Dallas, Texas.The briefs and a stipulation in lieu of the deposition have been received, and the case is now ready for final disposition.

Plaintiff contends very earnestly that it is entitled to recover compensatory damages in the sum of $160,287.39; punitive or exemplary damages in the sum of $250,000; more effective injunctive relief; and the destruction of a part of defendants' assembly machine.Just as earnestly, however, defendants contend that plaintiff is entitled to none of the relief requested and particularly is not entitled to recover any damages.

The possible remedies of the injured party in a case of this nature are set out in the Restatement of Torts, Sec. 757, Comment e, as follows:

"One who has a right under the rule stated in this Section is entitled to a remedy or remedies appropriate under the circumstances.He may recover damages for past harm, or be granted an injunction against future harm by disclosure or adverse use, or be granted an accounting of the wrongdoer's profits, or have the physical things embodying the secret, such as designs, patterns and so forth, surrendered by the wrongdoer for destruction.Moreover, he may have two or more of these remedies in the same action if the court is competent to administer them."

The court has already granted plaintiff injunctive relief, and the remaining question is whether plaintiff is entitled to recover the profits, if any, made by defendants and the damages, if any, sustained by plaintiff.See, E. L. Bruce Co. v. Bradley Lumber Co., D.C.W.D. Ark., 79 F.Supp. 176, 189;Annotation, 170 A.L.R. 449, 491.

There was no direct evidence in the case at bar that defendants made a profit from the sale of their bondwood; the only evidence on this question was that they sustained a substantial loss.With regard to compensatory damages this leaves only the question of whether the plaintiff suffered any damage by reason of defendants' appropriation of its trade secrets, and if so, the amount of said damages.

At the hearing plaintiff sought to prove that its actual damage was over $160,000, said damages consisting especially of loss of profits by plaintiff and market disruption caused by defendants' competition.In the opinion of the courtplaintiff's evidence fell far short of establishing damages in such an amount.The computations made by Mr. Hinderer, a Certified Public Accountant, were based on so many assumptions that his conclusion is entirely unreliable.Moreover, his calculations did not take into account market conditions, and the effect of valid competition as opposed to competition solely by use of plaintiff's trade secrets.In this connection, plaintiff...