Walker v. University Books, Inc.
602 F.2d 859, 202 U.S.P.Q. (BNA) 793 (9th Cir. 1979)
Before Browning and Wallace, Circuit Judges, and Curtis, District Judge.
Honorable Jesse W. Curtis, United States District Judge, Central
District of California, sitting by designation. [*860]
This is an appeal by the plaintiff from a summary judgment in favor of
the defendants. Appellant originally brought this action for copyright
[*861] infringement, unfair competition resulting from misappropriation
of trade secrets, and fraud. The latter count has been dismissed
and is not in issue on appeal. For reasons hereinafter appearing,
we affirm in part, reverse in part, and remand.
Walker copyrighted and published a set of 72 cards which she entitled
"I Ching Cards" and which are designed to aid in the instruction of an
ancient Chinese method of divination or fortune-telling. Appellant
concedes that her cards were an adaptation of the James Legge translation
of the I Ching, a work in the public domain. The validity of her
original copyright of the format is not in issue on appeal. In the
fall of 1971, the appellant determined to enlist the aid of a professional
New York publishing firm in the marketing of her cards and, pursuant to
this goal, met and conferred with Defendant-Appellee Sol Weinreich, president
of Appellee Noble Offset Printers, Inc. Weinreich introduced Appellant
to Felix Morrow who had some expertise in the area of publishing with
which the Appellant was concerned. Appellant attempted to interest
both men in a joint publishing venture regarding her cards and in this
connection, revealed to them, allegedly in confidence, her ideas for improving
the format and appearance of the I Ching cards. These proposed embellishments
consisted of the use of a higher quality stock, brighter colors, rounded
corners, red borders, larger hexagrams on the face of each card, and a
higher quality container in which the cards would be sold.
Initially, Morrow appeared to be willing to participate in the venture;
however, this interest was apparently short-lived and no agreement was
forthcoming. Later in the fall of 1971, Appellant received a letter
from Appellee Robert Salomon, then vice-president of Appellee Lyle Stuart,
Inc. and president of Appellee University Books, requesting a sample deck
of her cards pursuant to their possible use by Lyle Stuart's Mystic Arts
Books Society. Appellant provided the requested set to Lyle Stuart,
Inc. and also sent one to Sol Weinreich.
In December of 1971, Appellant became aware of a promotional flyer then
being circulated to booksellers by Lyle Stuart, Inc. which advertised
its upcoming publication of "I Ching Cards" based on the original James
Legge translation. Indicated was a prospective distribution date
of sometime in February, 1972 and potential purchasers were urged to "order
now."
* * * [*862] * * *
The Appellant's contentions before the district court, briefly stated, were
as follows. Appellees published their I Ching cards in violation of
her copyright, copying her work and utilizing the improvements which were
the product of her creative efforts and disclosed to them in confidence
as trade secrets. Appellees assert that, although they admittedly
had access to Appellant's version of the I Ching, they, like her, based
their presentation on the original James Legge translation which could be
freely copied since it was in the public domain. Further, Appellees
contend that their cards were developed without incorporation of the Appellant's
suggested improvements and that the alterations which were revealed to them
are standard practices and common knowledge in the area of the publishing
industry at issue and thus can not form the basis for a claim of misappropriation
of trade secrets.
* * * [*863] * * * [*864]
* * *
TRADE SECRETS
The court [below] granted summary judgment to the Appellees on the issue
of misappropriation of trade secrets on the basis that the improvements
which the Appellant revealed, allegedly in confidence to the Appellees,
could not constitute protectible "trade secrets" as that term is defined
in Restatement of Torts § 757,(1) admitted by both
parties to be controlling here. [*865]
The improvements which were communicated to the Appellees
consisted of the following: use of a higher quality stock for the cards,
brighter colors, rounded corners, wide red borders, larger hexagrams on
the face of the cards and a higher quality box in which the cards would
be packaged for sale. The Appellant asserts on appeal that the grant
of summary judgment against her precluded her efforts to demonstrate at
trial the validity of her contention that the embellishments listed above
represented "trade secrets" using the factors applicable under Restatement
of Torts, § 757, Comment (b).(2)
The district court refused to view the improvements listed above as protectible
in that they are "both vague and obvious, and as a matter of law (do) not
constitute ‘information . . . which gives (a party) an opportunity
to obtain an advantage over competitors . . .' Restatement of Torts, § 757,
Comment (b)."
With this finding we agree and therefore affirm the lower court on the issue
of unfair competition.
* * *
Affirmed in part, reversed in part, and remanded.
<
Back to Top
Footnotes
1. [court's footnote 1] § 757. LIABILITY
FOR DISCLOSURE OR USE OF ANOTHER'S TRADE SECRET GENERAL PRINCIPLE.
One who discloses or uses another's trade secret, without a privilege
to do so, is liable to the other if
(a) he discovered the secret by improper means, or
(b) his disclosure or use constitutes a breach of confidence reposed in
him by the other in disclosing the secret to him, or
(c) he learned the secret from a third person with notice of the facts
that it was a secret and that the third person discovered it by improper
means or that the third person's disclosure of it was otherwise a breach
of his duty to the other, or
(d) he learned the secret with notice of the facts that it was a secret
and that its disclosure was made to him by mistake.
Back to Text
2. [court's footnote 2]
"A trade secret may consist of any formula, 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. It may be a formula for a chemical compound, a process of
manufacturing, treating or preserving materials, a pattern for a machine
or other device, or a list of customers. * * * Generally it
relates to the production of goods, as, for example, a machine or formula
for the production of an article. It may, however, relate to the
sale of goods or to other operations in the business, such as a code for
determining discounts, rebates or other concessions in a price list or
catalogue, or a list of specialized customers, or a method of bookkeeping
or other office management.
"Secrecy. The subject matter of a trade secret must be secret. Matters
of public knowledge or of general knowledge in an industry cannot be appropriated
by one as his secret. Matters which are completely disclosed by
the goods which one markets cannot be his secret. Substantially,
a trade secret is known only in the particular business in which it is
used. It is not requisite that only the proprietor of the business
know it. He may, without losing his protection, communicate it to
employees involved in its use. He may likewise communicate it to
others pledged to secrecy. Others may also know of it independently,
as, for example, when they have discovered the process or formula by independent
invention and are keeping it secret. Nevertheless, a substantial
element of secrecy must exist, so that, except by the use of improper
means, there would be difficulty in acquiring the information. An
exact definition of a trade secret is not possible. Some factors
to be considered in determining whether given information is one's trade
secret are: (1) the extent to which the information is known outside of
his business; (2) the extent to which it is known by employees and others
involved in his business; (3) the extent of measures taken by him to guard
the secrecy of the information; (4) the value of the information to him
and to his competitors; (5) the amount of effort or money expended by
him in developing the information; (6) the ease or difficulty with which
the information could be properly acquired or duplicated by others."
Back to Text
|