Course No. 9200-704 (& 804)-801
ID No. 85737 & 85736
Time: W 6:30 - 9:30 p.m.
Room Across from 231D (IP Alcove)
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The B.F. Goodrich Co. v. Wohlgemuth117 Ohio App. 493, 192 N.E.2d 99, 24 Ohio Op.2d 290, 137 USPQ (BNA) 804 (1963)
Doyle, J.: [*494]
* * *The B. F. Goodrich Company, appellant, seeks a permanent injunction against Donald W. Wohlgemuth, a former employee, from doing any of the following things:
In November, 1962, Wohlgemuth was offered a position of employment by the International Latex Corporation, of Dover, Delaware, which corporation operates in the pressure-space equipment field, and is a competitor in this field of operation with The B. F. Goodrich Company; the offer of employment by Latex to Wohlgemuth resulted in his resignation from Goodrich and his employment soon thereafter by Latex.
The B. F. Goodrich Company, as the record shows, has been in the high-altitude, full-pressure space suit business since the year 1934, and over the years it has acquired, through experiment and development of processes, a high degree of scientific knowledge and advanced technology required in the research, design, construction, and testing, of space suits. It may be concluded from the evidence, as stated by appellant, that
There is no doubt that Wohlgemuth was one of a few top executives and developers in this field of operation with the Goodrich Company, and that he had, and has, full knowledge of many of the secrets and confidential facts which have come into existence through not only his own work, but also that of his fellow scientists and engineers with whom he has been closely associated. In fact, he stated that he was (1) technically responsible "for complete engineering of pressure suits and ancillary equipment, both the development and production phases"; (2) "responsible for the co-ordination between development engineering and The B. F. Goodrich's research center's efforts in pressure suit research design and development"; (3) responsible for keeping himself and subordinates abreast of the latest advancements and "state of the art in the space suit field"; (4) responsible for the direction of proposal writing aimed toward further space suit development.
It further appears that Wohlgemuth, while employed by Goodrich, was in technical charge of practically all research in space suits, and as a result had detailed knowledge of the scientific and engineering principles involved in the production of space suits for use in space flight. The evidence also shows that he was required, in the course of his employment with Goodrich, to co-ordinate the activities of the research center and the development engineering group in the space suit field; approve or veto new designs and direct changes in designs; approve or direct changes to new manufacturing specifications and revisions, standard operating procedures, suggestions and new simplifications; review and direct technical action on customer specifications, requests to quote, purchase order inquiries, contracts and contract modifications; direct compounding operations on pressure-suit items; check out new materials and designs; and, check out changes in product engineering policies.
Directing attention again to the pleadings of Goodrich, we find the following assertions upon which it bases its claim for injunctive relief:
Evidence further establishes the fact that Goodrich's former employee, Wohlgemuth, is in possession of many of these secrets; in fact, he was a part of the various Goodrich teams of highly-skilled men, which, through research and development, brought them into existence. The evidence further establishes the conclusions of fact of the Court of Common Pleas (which court, nevertheless, denied the injunction) that:
He explained that he had been contacted "by an employment agency regarding this new job," and that he subsequently visited International Latex, where he was then offered an "increase in salary and a better position." It was then said to Wohlgemuth that in leaving Goodrich "he was taking with him a body of information which did not belong to him or to any individual, but did belong to the company, and that there was a matter of company loyalty and ethics involved." Wohlgemuth replied that "loyalty and ethics had their price; insofar as he was concerned, International Latex was paying the price."
In further conversation, Wohlgemuth said that Latex knew of him because of his pressure-suit work, and when he was asked if he felt that he "could go into this position with a competitor and not use information which was proprietary to Goodrich," he replied that: "Once he was a member of the Latex team, he would expect to use all of the knowledge that he had to their benefit."
The appellee, Wohlgemuth, defends this action in part with the claim that Goodrich has not shown, by the evidence, a "clear right" to an injunction, in that "Goodrich's proof does not sustain its claim of trade secrets."
No attempt will be made to define trade secrets . . . . We adopt, for the purposes of this case, the elements of trade secrets as they are set forth in 4 Restatement of the Law of Torts, 5, Section 757 b [(1939)] . . . . [*499] . . .
We have no doubt from the testimony of many witnesses, and the exhibits, that Goodrich possessed a number of trade secrets in the space-suit area which resulted from a multitude of experiments and expensive research, and that it had put into practice close security measures for maintaining the secrecy of many of the processes and scientific knowledge employed in space-suit manufacture and its future development.
The subject matter of a trade secret must be secret, and matters of public knowledge or of general knowledge in an industry cannot be classified as trade secrets; however, the fact that a number of engineers, scientists and technicians employed by a corporation for research and development in an area pertinent to the manufacture of an article, such as a space suit, are possessed of knowledge of the secret processes and devices discovered and created by their joint or individual efforts, does not make their knowledge general or public knowledge; and the processes and devices, if they are in fact trade secrets, remain trade secrets of their employer.
We find from the evidence that Wohlgemuth is possessed of knowledge of Goodrich trade secrets, and that any revelation of them to a Goodrich competitor is in equity a breach of faith and reprehensible to a court of equity.
There is no evidence before this court that Goodrich trade secrets have been revealed by Wohlgemuth; however, the circumstances surrounding his employment by Latex, and his own attitude as revealed by statements to fellow Goodrich employees, are sufficient to satisfy this court that a substantial threat of disclosure exists. We have no doubt that an injunction may issue in a court of equity to prevent a future wrong although no right has yet been violated.
In cases of this character the law does not require an agreement between an employer and employee restricting the employee from securing employment with a competitor before an injunction may issue.
It is a rule in equity jurisprudence that, if an employee gains knowledge of his employer's trade secrets as a result of [*500] the confidential relationship existing between employer and employee, and, in violation of the confidence, discloses such secrets to competitors after the termination of his employment, such abuse of confidence may be enjoined. The basis for equitable intervention is the employee's wrongful conduct in violating the confidence. Equitable intervention is sanctioned when it appears, as it does in the instant case, that there exists a present real threat of disclosure, even without actual disclosure.
While we could base the decision in this case upon the general rules of equity stated above, there is an additional ground for injunctive relief. When Wohlgemuth re-entered his employment with Goodrich, following his army service, he entered into a contract with his employer in which he promised,
This written contract expressly binds the employee not to breach the
trust and duty accepted by himthat is, not to misuse special confidential
knowledge of trade secrets secured by him while the contractual relationship
of employment existed. Injunction may be employed to prevent such
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