K & G Tool and Service Company, Inc. v. G G Fishing Tool
158 Tex. 594, 314 S.W.2d 782, 117 U.S.P.Q. (BNA) 54, 117 U.S.P.Q.
(BNA) 471 (1958)
Mr. Justice Norvell delivered the opinion of the Court. [*596]
This is a "trade secret" case . . . At the conclusion of a jury trial
the district court rendered judgment for $ 22,000 against defendants, G
& G Fishing Tool Service and others and issued an injunction perpetually
restraining [*597] defendants from wrongfully copying, making and
using a magnetic fishing tool which was substantially the same as the tool
devised by plaintiff, John J. Kirby, II and manufactured by his licensee
and co-plaintiff, K & G Tool & Service Co., Inc. The magnetic tool
was a device for recovering parts of broken drilling bits, drill stems and
other foreign metallic materials from oil wells. The Court of Civil
Appeals reversed the judgment of the trial court and rendered judgment that
plaintiffs take nothing.
* * *
It appears that J. J. Kirby, II had been working upon a magnetic fishing
tool for a number of years. He secured one patent on January 30, 1951
and on August 2, 1951 he filed another application. An amended or
additional application was filed on January 30, 1952 which was described
as being in part a continuation of the application of the preceding August.
The 1952 application referred to the device as a "Magnetic Fishing
Tool" and described the same as follows:
[*598] "This invention pertains to tools for removing undesired
materials from a well and more particularly to a magnetic tool for fishing
magnetic junk out of a hole in the earth drilled by the rotary method,
from which hole oil or gas is to be produced. * * *
"It is the principal object of the invention to provide a magnetic fishing
[**785] tool which will be more efficient in the removal
"Still another object of the invention is to provide a magnetic fishing
tool which will more nearly assure a one hundred percent removal of all
"Another object of the invention is to provide a magnetic fishing tool
that is more easily manufactured and repaired and maintained."
[*599] It appears that the idea of using a magnet to remove "fish"
or metallic substances from the hole of a drilling well was not new to the
oil industry. Articles concerning the use of a magnet for such purposes
had appeared in technical journals prior to the date of business negotiations
between the parties to this litigation. In fact the record discloses
that some five or six patents upon magnetic devices for removing foreign
metallic matter from well holes had been applied for or issued prior to
March of 1951. A number of these inventions bore the same descriptive
designation as that used by Kirby, namely, a "Magnetic Fishing Tool." It
further seems that the metallurgy Division of the Chemical Department of
the General Electric Corporation had widely advertised a magnet made of
metal which was called "Alnico." These magnets were said to be suitable
for a number of uses, such as holding necktie racks in place, providing
fasteners for metal doors and removing nails from parking areas and driveways.
It appears that the Kirby tool utilized an Alnico magnet as an effective
feature in its operation.
In 1951 K & G Oil Tool & Service Co., Inc. was formed and licensed by Kirby
to manufacture his magnetic tools and some of them were leased for oil field
use. In the early part of 1952 K & G entered into an agreement with
G & G Fishing Tools Service whereby G & G agreed to sub-lease the K & G
tool to drilling operators for twenty-five per cent of the rentals charged.
K & G also leased from G & G certain space in a warehouse located
in Duncan, Oklahoma for the storage of its magnetic tools.
The jury made a number of special issues findings as to agreements between
K & G and G & G as well as actions taken by G & G in violation of such agreements.
The jury found:
1. That during March 1952 it was mutually agreed between Robert
Garrett (representing K & G) and Cecil Bond [**786] (representing
G & G) that during the time the G & G Fishing Tool Service Co., Inc. was
handling the K & G magnetic fishing tool, no one was to disassemble said
2. That, in making such agreement, it was mutually understood that
the purpose of such agreement was to guard against anyone determining
the internal construction of the tool by way of examining the interior
3. That, at some time before August 15, 1952, the G & G Fishing
Tool Service, Inc., acting by or through some of its agents, servants,
incorporators or directors, disassembled the [*600] K & G fishing
tool for the purpose of making an examination thereof.
4. That such act was done for the purpose of making an examination
of the interior construction of the K & G tool in question.
5. That a K & G magnetic fishing tool was disassembled by the G
& G Fishing Tool Service, Inc., acting by or through some of its agents,
servants or representatives, for the purpose of making a similar tool.
6. That the defendant G & G Fishing Tool Service, Inc., acting through
its agents, servants or representatives, used the information obtained
by disassembling the K & G magnetic fishing tool to make one substantially
the same as the K & G magnetic tool.
7. That the fishing tool constructed from information gained by
disassembling the K & G tool is substantially the same tool that is now
being used by the G & G Fishing Tool Service, Inc., G & G Fishing Magnets,
Inc., and their affiliated interests in their operations.
8. That before March 1952 the internal construction of the K & G
magnetic fishing tool was not known to persons engaged in the oil well
fishing tool business.
The defensive issues submitted and their answers were as follows:
9. Do you find from a preponderance of the evidence that the G &
G Magnetic Fishing Tool was constructed from information obtained exclusively
from sources other than the disassembly, if any, of the K & G Magnetic
Fishing Tool? Answer: We do not.
10. When do you find from a preponderance of the evidence that the
plaintiffs or either of them or their officers acquired knowledge that
A. C. Green, Jr., (connected with G & G) was making a magnetic fishing
tool? Answer: August, 1952.
11. Do you find from a preponderance of the evidence that from the
date that you have stated in response to Special Issue No. 9, Sic.
(10) to the date of the filing of this suit, the plaintiffs or either
of them or their officers knew that the defendants [*601] were
manufacturing magnetic fishing tools? Answer: We do.
12. Do you find from a preponderance of the evidence that the plaintiffs
or either of them or their officers were familiar in a general way with
the cost of the manufacturing of magnetic fishing tools such as those
which were being manufactured by the defendants herein? Answer:
13. Do you find from a preponderance of the evidence that the plaintiffs
or their representatives, either before or during the use of the warehouse
at Duncan, Oklahoma by the K & G Oil Tool and Service Company, Inc., ever
disclosed to any person, other than employees or others in a confidential
relationship, the internal construction of the K & G magnetic fishing
tool? Answer: We do not.
14. Do you find from a preponderance of the evidence that the internal
construction of the K & G magnetic tool can be determined by an examination
of the tool without disassembling it, to the extent that another tool
can [**787] be constructed that would perform the same function
by substantially the means employed in the K & G magnetic tool? Answer:
The trial judge upon motion disregarded the jury's answer to Special Issue
No. 14 on the ground that there was no evidence to raise such issue or to
sustain the finding of the jury thereon and because such interrogatory did
not constitute an ultimate fact issue in the case. Judgment was accordingly
rendered for petitioner-plaintiffs.
The Court of Civil Appeals was of the opinion that petitioners' magnetic
fishing tool was not subject to protection as a "trade secret," primarily
because of the jury's answer to Special Issue No. 14. There were witnesses
who testified that they could reconstruct the Kirby tool without first disassembling
it. It may be that they could, but this hardly reaches the controlling
point or issue in the case. According to the jury's findings, where
they were not attacked, G & G did not learn how to make the Kirby tool or
a device similar thereto by observing it in an assembled or unbroken condition
but learned of its internal proportions, qualities and mechanisms by taking
it apart despite an agreement that it would not do so. We have here
the violation of a confidence and the breach of a contract. Under
such [*602] circumstances, the injured party is entitled to full
relief, both legal and equitable, unless there exists some compelling reason
of public policy or practicability which directs the withholding of such
* * *[*605] * * * [**790] * * *
The record in the present case indicates that the K & G tool is no simple
device, the construction of which is ascertainable [*606] at a glance. The
use of a magnet to attract metallic substances is of course devoid of novelty.
The making of a tool embodying this principle which is effective in
meeting the needs of the industry in clearing well holes of deleterious
metal particles is another matter. The record shows numerous patents
have been issued for "magnetic fishing tools" and that much work and ingenuity
has been applied to the development of a practical and successful device.
The evidence indicates that the K & G tool was successful and hence
the owners of the device and manufacturing process should be protected in
the fruits of their engenuity against those who, according to the jury's
findings, are attempting to deprive them of such advantages by a breach
of confidence and a failure to abide by their contractual obligations.
In the law of trade secrets, embracing mechanical engines, chemical formulae,
confidential lists and the like, matters ranging from sugar in tea for sweetening
purposes to the most complicated machines will be encountered. Questions
as to classification will arise and their solution may not always be free
from difficulties. Examples may be more helpful than definition or
attempted redefinition. In our opinion the K & G tool cannot be classified
as a simple and obvious device belonging in the same category as [a] combination
fishing rod and walking stick . . . and [an] aluminum foil oven lining.
This being true, injunctive relief cannot be considered a futile thing like
enjoining one from make use of knowledge that is common to all. Nor
does the injunction run counter to a public policy which discourages contracts
which tend to lessen competition. The protection of a trade secret
is a well-recognized objective of equity . . . .
* * * [*607] * * * [**791]
Respondents' complaint as to the form of the injunction will [*608]
not warrant a reversal. There are a number of ways in which
a decree may be worded in cases such as this, and certain methods may
be superior to others. The trial judge in the present case summarized
the jury's finding and recited in the decree that respondents in breach
of a confidential relationship had copied the magnetic fishing tool of
petitioners "and after copying same did manufacture, lease, operate, use,
and distribute for use by others, said magnetic fishing tool and did so
from at least August 1952, and have so engaged down to the present time"
and will continue to do so, unless restrained
"to the irreparable injury of plaintiffs herein because of the inability
of plaintiffs to trace each and every such tool and determine how much
loss of revenue would result to plaintiffs from such illegal and unlawful
use of the copied tool, and particularly since the magnetic fishing tool
so manufactured, used, leased, and distributed and operated by defendants
is substantially the same as the magnetic fishing tool of plaintiffs and
works in substantially the same fashion, so that person using the magnetic
fishing tool of defendants would in large measure fail and refuse to hire
and use plaintiffs' magnetic fishing tool; * * *."
Based upon such findings and recitals, respondents were ordered to
"desist from making, using, leasing, selling, manufacturing, operating,
copying or otherwise representing them selves to be the makers, manufacturers,
lessors of magnetic fishing tools substantially the same as that of the
plaintiffs (petitioners) herein, and from using in any way the confidential
information obtained by defendants (respondents) from an examination of
plaintiffs' magnetic fishing tool."
Future problems of enforcement applicable to most every type or form
of injunction may be imagined. The decree is, however, to be interpreted
in the light of its recitals and findings. It was found that respondents
were wrongfully making a tool substantially the same as that of petitioners.
They were ordered to desist. The decree is sufficiently definite
to be enforced.
The judgment of the Court of Civil Appeals is reversed and that of the
trial court affirmed.