Sandlin v. Johnson

• Decision Date: 27 March 1944
• Docket Number: No. 12702.,12702.
• Citation: 141 F.2d 660
• Court: U.S. Court of Appeals — Eighth Circuit
• Parties: SANDLIN et al. v. JOHNSON.

141 F.2d 660 (1944)

SANDLIN et al. v. JOHNSON.

No. 12702.

Circuit Court of Appeals, Eighth Circuit.

March 27, 1944.

Tyree G. Newbill, of Kansas City, Mo., and Reuben Singer, of Philadelphia, Pa. (W. Arnold Brannock, Jr., of Kansas City, Mo., on the brief), for appellants.

Charles W. Gerard, of Kansas City, Mo. (Roy E. Hamilton, of Kansas City, Mo., on the brief), for appellee.

Before STONE, THOMAS, and JOHNSEN, Circuit Judges.

JOHNSEN, Circuit Judge.

The action is one for an injunction, accounting of profits, and damages, for using and disclosing an improvement in a poultry-picking device, which plaintiffs claimed to have discovered and kept a trade secret, but which they had revealed to defendant in alleged confidence during licensing negotiations with him. The district court held that plaintiffs could have no possible cause of action against defendant, because the discovery did not constitute a patentable invention and hence it was immaterial whether "the ideas involved had been confidentially conveyed". This holding is erroneous.

The rule in Missouri, as well as generally, is that, though a trade secret be unpatentable, it will nevertheless be protected from use or disclosure by one to whom it has been revealed in confidence. Restatement, Torts, § 757; Germo Mfg. Co. v. Combs, 209 Mo.App. 651, 678, 240 S.W. 872, 881; Godefroy Mfg. Co. v. Lady Lennox Co., Mo.App., 134 S.W.2d 140, 141; Luckett v. Orange Julep Co., 271 Mo. 289, 196 S.W. 740; A. O. Smith Corp. v. Petroleum Iron Works Co., 6 Cir., 73 F.2d 531, 538, 539; Id., 74 F.2d 934; American Dirigold Corp. v. Dirigold Metals Corp., 6 Cir., 125 F.2d 446, 452; Peabody v. Norfolk, 98 Mass. 452, 458, 96 Am.Dec. 664; Stewart v. Hook, 118 Ga. 445, 45 S. E. 369, 370, 63 L.R.A. 255; Salomon v. Hertz, 40 N.J.Eq. 400, 2 A. 379, 380, 381.

"A trade secret may consist of any formula, process, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it." Restatement, Torts, § 757, comment b. The discoverer's property right¹ in a trade secret ceases prospectively to exist — except perhaps as against the continuing obligation of a contract, such as a licensing agreement — once the matter has become public property by a general disclosure on the part of the discoverer, or by a legitimate discovery and rightful general disclosure on the part of another. Cf. American Dirigold Corp. v. Dirigold Metals Corp., 6 Cir., 125 F.2d 446, 452; Godefroy Mfg. Co. v. Lady Lennox Co., Mo.App., 134 S.W.2d 140, 141. The fact, however, that another has legitimately discovered the trade secret will not permit one to whom a confidential disclosure has been made to violate the confidence, where the matter has not been generally disclosed by any of the discoverers, so as to have become public knowledge and property.

It appears from the record that plaintiffs have made application for a patent on the improvement involved, and that this application is still pending. An application to patent a discovery is not of itself a general disclosure of the discoverer's secret, and hence is not a release of the obligation of a confidential disclosee. A. O....