FALL 2010

Trade Secrets


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

ID No. 85737 & 85736

Time:  W 6:30 - 9:30 p.m.
Room:  W-215
Professor Jay Dratler, Jr.
Room Across from 231D (IP Alcove)
Home: 330-835-4537
Copyright © 2000, 2002, 2003, 2006, 2008, 2010   Jay Dratler, Jr.   For permission, see CMI.

Questions and Notes on Wexler v. Greenberg,
B. F. Goodrich Co. v. Wohlgemuth,
and Bimbo Bakeries USA, Inc. v. Botticella

1.  What was the main issue in these three cases?  Was it whether trade secrets existed, or whether they were misappropriated?  In each case, on what facts and legal doctrine does resolution of that issue depend?

2.  Are the Wexler and Wohlgemuth reconcilable, or was one wrongly decided?  What about Wexler and Botticella?  All three defendants wanted to improve their position in life, didn't they?  Didn't they all take what opportunities were offered them?  What specific facts, if any, were responsible for the court reversing the injunction in Wexler, granting a broad injunction in Wohlgemuth, and affirming a broad preliminary injunction in Botticella?

3.  What about the "smell test"?  Did what the defendants do all three cases smell the same?  Were there any odoriferous facts or testimony in the latter two cases that might have influenced the courts?

4.  Apart from the smell test, do the results in the three cases make economic sense?  Weren't roughly the same countervailing economic policies at work in all three cases?  If so, then why the different results?  In balancing the policies, did one court weigh some policies more heavily than the other court did?  If so, what policies?  Did the facts of the cases justify the weights that each court put on the particular policies that it stressed?

5.  Some courts and commentators refer to cases like Wohlgemuth as "inevitable disclosure" cases.  To see why, consider what might have happened if Wohlgemuth actually had gone to work for International Latex.  Over the long run, could he have kept himself from using trade-secret information acquired at B.F. Goodrich, perhaps unconsciously, even if acting in the utmost good faith?  As you think about this question, consider the large number of trade secrets to which he had access in his various positions at B.F. Goodrich and the competitive pressure that he would face in his new job.

 Is the Bimbo Bakeries case similar?  In conceptual outline, try to draft a non-disclosure injunction against Botticella that would preserve Bimbo Bakeries' trade secrets but let him work for Hostess Brands.  Is that an easy task?   If you were an executive in Bimbo Bakeries, would such an injunction make you feel secure?

"Inevitable disclosure" cases like these are among the few in which courts will grant broad permanent injunctive relief, without any time limit.  Was such relief appropriate in Wohlgemuth?  What are the economic policies for and against it?  Was it fair to Wohlgemuth under the circumstances?  Would a time-limited injunction have been fair to B.F. Goodrich, in light of the longevity and productivity of its research in the space-suit field?  What about Bimbo Bakeries?

6.  Could the chemical formulas that Greenberg developed at Buckingham still be trade secrets?  If so, who owns the trade secrets?  Suppose a third party, C, steals the formulas from a safe in Brite's office.  Would Brite have an action for misappropriation against C?  Would Greenberg?  Would Buckingham?  Suppose C steals the formulas from a safe in Buckingham's office.  Would Buckingham has a cause of action for misappropriation against C?  Would Greenberg?  Would Brite?  What is the best was to do justice in this situation, to apportion ownership of the trade secrets, or to limit the persons who can sue for misappropriation?

7.  Wexler is the first case we have studied that contains a serious and extended discussion of the social and economic policies underlying legal protection of trade secrets.  Are those policies limited to cases of alleged misappropriation by former employees, or are they more general?   Make two lists of economic and social policies—those that favor the plaintiff, and those that favor the defendant.  As you read the cases in this course, add to both lists.  Is there more to the polices underlying trade-secret protection than just encouraging innovation and promoting commercial morality?

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