FALL 2008

Trade Secrets


Course No. 9200-704 (and 804)-801

ID No. 16545

MW 3:00 - 4:30 p.m.
Room L-134
Professor Jay Dratler, Jr.
Room 231D (IP Alcove)
(330) 972-7972
Copyright © 2000, 2002, 2003, 2006, 2008   Jay Dratler, Jr.   For permission, see CMI.

Questions and Notes on Van Products

1.  Van Products deserves careful study, for it provides a good review of much of this course so far.  It involves four important themes of trade secret law:: (1) the difference between an employee's general knowledge, experience and skill, on the one hand, and the employer's trade secrets on the other; (2) the effect of an employee's own effort in developing the information at issue; (3) the "could have" defense, i.e., the defense that a secret was "readily ascertainable" through independent development, careful observation or reverse engineering, even if the employee got it otherwise; and (4) the effect of the specificity with which the plaintiff identifies the secret(s) allegedly taken.  How many of these themes provide convincing justification for the result reached by the appellate court here?

2.  The district court had found thirteen trade secrets, here labelled (A) through (M).  Consider each carefully.  Do you agree with the court that each was either not a trade secret or was not misappropriated?  Which of the four themes mentioned in Question 1 best justifies the "take nothing" result for each of the thirteen trade secrets?

Was the plaintiff's trade-secret claim better founded for some of the thirteen alleged secrets than for others?  Did the plaintiff's lawyer do his client a disservice by "shotgunning" the case with a "laundry list" of claims?  Or did the lawyer make the best of a bad case by attempting to add the weight of all the separate claims together?

3.  Remember Wohlgemuth, whose potentially "inevitable disclosure" of many trade secrets relating to B.F. Goodrich's space-suit research over many years resulted in a permanent injunction?  Can you distinguish this case, or was the appellate court wrong in not treating it like Wohlgemuth?  If you were the plaintiff's attorney, would you have followed the strategy of trying to fit this case within the Wohlgemuth pattern, or would you have focused on only a subset of the "laundry list" of secrets?  If the latter, which ones?

4.  Were there any "odoriferous" facts in this case?  If so, what were they?  Were there any "sanitizing" facts on the other side?  If so, what were they?  Do odoriferous facts work their magic in winning cases only when they are "unopposed" by sanitizing facts?

5.  In Henry Hope X-Ray Products, Inc., infra, the Ninth Circuit cited Van Products for the "could have" defense.  This is the proposition that a trade secret either does not exist or has not been misappropriated if the defendant could have ascertained it readily by independent development, careful observation, or reverse engineering, even if the defendant did not actually acquire the secret that way, but got it through improper means.  Is it an accurate characterization of Van Products to say that it applied the "could have" defense?

Compare Van Products to Smith v. Dravo Corp. (the case involving the shipping containers) and Water Services, Inc. v. Tesco Chemicals, Inc. (the case involving the water-treatment product comprising a combination of well-known components whose identities and suppliers the plaintiff had disguised).  Can you distinguish each of those cases?  Or is the different result in this case better explained by a different rule of law, such as the "could have" defense?

6.  The plaintiff's inventor, Norton, apparently had discovered the usefulness for this application of dessicants comprising a hygroscopic (water absorbing) compound dispersed in a water-soluble compound.  Norton's dessicant used sodium chloride (table salt) as the soluble compound, while defendant Rapp's used urea.  Norton tried but apparently failed to patent his sodium-chloride dessicant by itself, so we can assume that Norton's patent only covered his dessicant in combination with the rest of the drier.  Rapp was able to patent his dessicant by itself.  Sodium choride is an inorganic compound, while urea is organic (and therefore more complex).

What bearing did/should these facts have on the trade secret claim relating to the formula for the dessicant?  Was there a valid trade secret in the formula?  If so, did Rapp misappropriate it?

Remember Wexler v. Greenberg, the case involving the chief chemist and his formulas for santitation chemicals?  Note that both Wexler and this case were decisions by the Pennsylvania Supreme Court.  With regard to the formula for the dessicant, is Wexler good precedent for the result reached here on appeal?  If so, can that result accurately be characterized as relying on the "could have" defense?

The Wexler court devoted much of its opinion to the delicate policy balance in trade-secret cases involing former employees.  Did the court get the policy balance right in Van Products?

7.  What about the customer list?  What case would you cite to support the court's decision that it was not a trade secret under these circumstances?

8.  One other fact was important in this case: Rapp had no restrictive covenant with Van Products.  What difference does/should that make?  If Rapp had had a nondisclosure agreement, or a reasonable (and therefore enforceable) covenant not to compete, would/should the case have come out differently?  Could Van Products have protected the thirteen items (A) through (M) under a nondisclosure agreement even if they did not qualify as trade secrets?

If so, does that result make sense?  If the policy balance was right as the court saw it, why should an agreement shift that balance?

Back to Top