Juliano v. Hobart Manufacturing Company

• Decision Date: 28 December 1961
• Docket Number: Civ. A. 61-469-C.
• Citation: 200 F. Supp. 453
• Parties: Michael H. JULIANO, Plaintiff, v. HOBART MANUFACTURING COMPANY, Defendant.
• Court: U.S. District Court — District of Massachusetts

200 F. Supp. 453

Michael H. JULIANO, Plaintiff, v. HOBART MANUFACTURING COMPANY, Defendant.

Civ. A. 61-469-C.

United States District Court D. Massachusetts.

December 28, 1961.

Harold Cole, Boston, Mass., for plaintiff.

Robert L. Meade, John Kimball, Jr., Hale & Dorr, Boston, Mass., Lawrence B. Biebel, Dayton, Ohio, for defendant.

CAFFREY, District Judge.

The complaint in this removed action, originally filed by plaintiff Michael H. Juliano, a citizen of Massachusetts, in the Superior Court for Suffolk County, Massachusetts, alleges, in substance, that he invented a machine for the dicing of vegetables; that at the request of an agent for the defendant, an Ohio corporation, he delivered his invention to the defendant in confidence, on the condition that defendant would not copy the machine; that the defendant paid the plaintiff $100.00, by check, for the machine and further agreed to pay plaintiff an additional amount if the machine was commercialized by the defendant; and that thereafter, although the defendant did manufacture and sell machines substantially the same as plaintiff's machine, it wrongfully refused to recompense plaintiff therefor.

On August 21, 1961, the defendant filed its answer to the complaint, wherein it admitted that it bought a machine from the plaintiff for $100.00 but denied that it acquired the machine in confidence under the condition alleged by plaintiff. As one of several affirmative defenses the defendant avers in its answer that the plaintiff did not have any secret, confidential, or proprietary right in the machine because such a right was lost by public disclosure through earlier sales of the machine and the acquisition of a patent by the plaintiff.

On September 27, 1961, the defendant filed a motion for summary judgment under Rule 56, Federal Rules of Civil Procedure, 28 U.S.C.A. The defendant argues that upon the pleadings, the stipulation of the parties, and plaintiff's deposition with its accompanying exhibits, there is no genuine issue as to any material fact in dispute. The defendant contends, in this motion, that the facts indisputably show that there was a lack of confidential disclosure because of earlier public sales; that any rights which plaintiff had in his machine were terminated upon the issuance of his patent; and that even assuming plaintiff did have substantial rights in his machine the defendant did not violate those rights because it did not utilize the ideas embodied in the machine.

Thereafter, on October 6, 1961, plaintiff amended his complaint by adding another count to his declaration. The allegations in this additional count differ from those in the original declaration in the following respects: it is alleged that the machine is an attachment to a machine which the defendant already had on the market; that plaintiff had introduced a limited number of his machines to the trade for testing purposes; that he had delivered a machine to the defendant under the condition that the defendant would not use the machine without compensating plaintiff therefor; and that after defendant had paid plaintiff $100.00 plaintiff notified defendant that this did not give it the right to reproduce his invention. It is not alleged in this count that the defendant received the machine in confidence.

The parties have argued the motion for summary judgment and briefs have been filed. On the basis of the pleadings, the stipulations of the parties, and the testimony given and exhibits introduced at the deposition of the plaintiff, there would appear to be no genuine issue as to any of the following facts:

1. Some time in April 1956, after several months of development, the plaintiff designed a rough metal model of a machine for dicing vegetables.

2. This machine was made up of a Bloomfield french-fry cutter and the Hobart hopper front. It was a hand-operated machine which could be attached to a Hobart machine already on the market. The dicing of a vegetable by the machine involved two cutting operations: first, the slicing of a vegetable as it was forced through the grid by a hand-operated pusher, and second, the cutting of these slices into sections by a knife. No part of the machine was new to the industry.

3. At least 5 of these machines were manufactured for the plaintiff on or prior to April 30, 1956.

4. Thereafter, during the next five months, the plaintiff, through an authorized representative, sold 4 of these machines to food vendors in and around Boston. The plaintiff admits that these sales on the public market had no restrictions and were not made in confidence so as to prevent disclosure of his idea.

5. In the latter part of September 1956, the plaintiff, then a salesman for the defendant, delivered one of his machines to Mr. A. S. Bates, Sales Manager for Hobart, at the Boston Sales Office. This machine was delivered at Bates' request and was forwarded by Bates to the defendant in Troy, Ohio. Bates suggested, either then or at a later time, that the plaintiff might be paid something for it.

6. On November 26, 1956, plaintiff applied for a patent on his machine.

7. Some time in December 1956, Bates asked plaintiff how much he would sell the machine for and plaintiff said that he was "perfectly willing to sell it to the company for $100.00." Plaintiff described this as "another commercial sale at regular wholesale price."

8. The defendant thereafter issued to the plaintiff a check dated December 31, 1956, in the amount of $100.00. This check was cashed some time prior to February 25, 1957.

9. On January 8, 1957, counsel for plaintiff sent a letter to the defendant in Ohio stating that plaintiff was willing to sell his machine but wanted to make clear that the defendant was not authorized to make or sell the machine since it was disclosed to the defendant in confidence.

10. On February 25, 1957, Mr. F. D. Houser, defendant's Secretary and Chief Engineer, sent a letter to plaintiff stating that defendant had no desire to license his machine for manufacture or sale because it did not appear to be patentable.

11. The plaintiff continued to make and sell his machine, through his authorized representative, to customers in the Boston area. Approximately 25 machines were sold in all.

12. On November 11, 1958, a patent was issued to plaintiff by the United States Patent Office. This patent covered the "ornamental design for the vegetable and fruit cutting machine" which the plaintiff had developed.

Regarding the choice of law question, the law of the State in which a Federal District Court sits is controlling as to substantive issues, including the law of Conflicts Of Laws of the State. Klaxon Company v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1940). Under Massachusetts law, which is controlling here, the ordinary rule of conflicts in torts cases is to apply the law of the place of the wrong. Kelly v. Loew's, Inc., 76 F.Supp. 473 (D.Mass. 1948), and Barber SS Lines v. Quinn...