|||SUPREME COURT OF THE UNITED STATES
244 U.S. 100, 61 L. Ed. 1016, 37 S. Ct. 575
|||May 21, 1917
|||E.I. DU PONT DE NEMOURS POWDER COMPANY ET AL.
MASLAND ET AL.
|||CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE THIRD CIRCUIT.
|||Mr. Edwin J. Prindle, with whom Mr. Warren H. Small, Mr. John P. Laffey
and Mr. Kenneth S. Neal were on the brief, for petitioners.
|||Mr. George Wharton Pepper, with whom Mr. John G. Johnson and Mr. Frank
Smith were on the brief, for respondents.
|||The opinion of the court was delivered by: Holmes
|||In a suit to enjoin defendant from using or disclosing secret processes
of plaintiff's business, defendant, while in effect conceding that he learned
them through his former confidential employment by plaintiff, denied that
they were secret and insisted on his right to use them as processes well
known to the trade and to reveal them to expert witnesses in making his
defense. Held, that, during the taking of proofs, defendant might properly
be enjoined from disclosing the processes to experts or other witnesses,
the restraint not extending to his own counsel, and that the trial Judge
in his discretion might reveal them to such persons, at such times, and
under such precautions as he might deem necessary in the progress of the
|||In such a case the right of the defendant to make a full defense is limited
by his duty to abstain from any fraudulent abuse of the trust which was
reposed in him by the plaintiff.
|||The word "property," as applied to trade-marks and trade secrets,
is an unanalyzed expression of certain secondary consequences of the primary
fact that the law makes some rudimentary requirements of good faith.
|||224 Fed. Rep. 689, reversed.
|||THE case is stated in the opinion.
|||MR. JUSTICE HOLMES delivered the opinion of the court.
|||This is a bill to prevent the defendant Walter E. Masland from using or
disclosing secret processes the knowledge of which was acquired by the defendant
while in the plaintiffs' employ. The defendant admits that he intends to
manufacture artificial leather, to which some of the plaintiffs' alleged
secret processes relate, but denies that he intends to use any inventions,
trade secrets, or secret processes of the plaintiffs that he may have learned
in any confidential relation, prefacing his denial, however, with the averment
that many of the things claimed by the plaintiffs are well known to the
trade. A preliminary injunction was refused at first. 216 Fed. Rep. 271.
But before the final hearing the defendant proposed to employ one or more
experts and to make such disclosures to them as the preparation of the defence
might require. Thereupon the District Court issued a preliminary injunction
against disclosing any of the plaintiffs' alleged processes to experts or
witnesses during the taking of proofs, but excepting counsel, with leave
to move to dissolve the injunction if occasion to consult experts arose.
Later a motion to dissolve was denied and the hearing was continued for
a decision by the Appellate Court. 222 Fed. Rep. 340. The Circuit Court
of Appeals reversed the decree. 224 Fed. Rep. 689. Before any further order
was entered the writ of certiorari was granted by this court.
|||The case has been considered as presenting a conflict between a right
of property and a right to make a full defence, and it is said that if the
disclosure is forbidden to one who denies that there is a trade secret,
the merits of his defence are adJudged against him before he has a chance
to be heard or to prove his case. We approach the question somewhat differently.
The word property as applied to trade-marks and trade secrets is an unanalyzed
expression of certain secondary consequences of the primary fact that the
law makes some rudimentary requirements of good faith. Whether the plaintiffs
have any valuable secret or not the defendant knows the facts, whatever
they are, through a special confidence that he accepted. The property may
be denied but the confidence cannot be. Therefore the starting point for
the present matter is not property or due process of law, but that the defendant
stood in confidential relations with the plaintiffs, or one of them. These
have given place to hostility, and the first thing to be made sure of is
that the defendant shall not fraudulently abuse the trust reposed in him.
It is the usual incident of confidential relations. If there is any disadvantage
in the fact that he knew the plaintiffs' secrets he must take the burden
with the good.
|||The injunction asked by the plaintiffs forbade only the disclosure of
processes claimed by them, including the disclosure to experts or witnesses
produced during the taking of proofs -- but excepting the defendant's counsel.
Some broader and ambiguous words that crept into the decree, seemingly by
mistake, may be taken as stricken out and left on one side. This injunction
would not prevent the defendant from directing questions that should bring
out whatever public facts were nearest to the alleged secrets. Indeed it
is hard to see why it does not leave the plaintiffs' rights somewhat illusory.
No very clear ground as yet has been shown for going further. But the Judge
who tries the case will know the secrets, and if in his opinion and discretion
it should be advisable and necessary to take in others, nothing will prevent
his doing so. It will be understood that if, in the opinion of the trial
Judge, it is or should become necessary to reveal the secrets to others
it will rest in the Judge's discretion to determine whether, to whom, and
under what precautions, the revelation should be made.
|||Decree reversed and case remanded for further proceedings in conformity
with this opinion.
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