Bolt Associates, Inc. v. Alpine Geophysical Associates, Inc. And Walter C. Beckmann

365 F.2d 742, 151 U.S.P.Q. (BNA) 520, 1966 U.S. App. LEXIS 5034
CourtCourt of Appeals for the Third Circuit
DecidedSeptember 6, 1966
Docket15750_1
StatusPublished
Cited by21 cases

This text of 365 F.2d 742 (Bolt Associates, Inc. v. Alpine Geophysical Associates, Inc. And Walter C. Beckmann) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bolt Associates, Inc. v. Alpine Geophysical Associates, Inc. And Walter C. Beckmann, 365 F.2d 742, 151 U.S.P.Q. (BNA) 520, 1966 U.S. App. LEXIS 5034 (3d Cir. 1966).

Opinion

OPINION OF THE COURT

FORMAN, Circuit Judge.

The appellant herein, Alpine Geophysical Associates, Inc. (hereinafter Alpine), a New Jersey corporation having its principal place of business in Norwood, New Jersey, and Walter C. Beckmann, its president and one of its directors, were named as defendants in a complaint for *744 breach of contract and breach of trust filed by the appellee herein, Bolt Associates, Inc. (hereinafter Bolt), a Connecticut corporation having its principal place of business in East Norwalk, Connecticut.

In substance Bolt alleged that in the spring of 1961 it was engaged in the business of manufacturing, selling and leasing oceanographic equipment and in pursuance thereof it had discovered a system of conducting ocean floor surveys using echo sounders in which the sound source is the explosive release of air under pressure, an alleged improvement over the existing high voltage “sparkers” and combustible gas explosives used for such purposes.

Specifically, Bolt charged that it had designed and developed a sounding device for seismic profiling of ocean floors under the trademark name “PAR” gun (pneumatic acoustical repeater). Both the survey system and the underwater pneumatic acoustical repeater were allegedly a secret process and device. The complaint further alleged that Bolt in early June 1961 informed Lamont Geological Observatory of Columbia University, Palisades, New York (hereinafter Lamont) that it had developed the system and device and had demonstrated both to Lamont, following which one or more of Lamont’s representatives suggested that Bolt communicate with Walter C. Beckmann, President of Alpine, to ascertain his interest in them.

About the last week in June 1961 Bolt demonstrated the process and device in secret to Mr. Beckmann at Alpine’s place of business in Norwood, New Jersey, after which Mr. Beckmann discussed with Bolt the matter of a license agreement under which Alpine would manufacture the device and use the system. On July 19, 1961, as a condition of seeing the working drawings of the device, Mr. Beckmann signed an agreement for Alpine providing that Alpine and associate companies would neither divulge Bolt’s pneumatic sound source design to others nor incorporate it in the design of other devices until a patent had been issued or denied. 1 At the time of the filing of the complaint the patent had not been issued or denied.

In the last week of July Bolt rented a PAR gun to Alpine and furnished a technician to operate it in connection with a survey Alpine was making in Baychester, New York. Alpine thereafter expressed no interest in taking a license and discussions thereon were terminated.

Bolt charges that Mr. Beckmann and Alpine misled it as to their interest in the PAR gun and in violation of their written obligation disclosed the secrets reposed in them to Lamont and others. It is further alleged by Bolt that Alpine sold to Lamont devices embodying such secrets, each knowing that the other had received Bolt’s disclosures of such discoveries in trust and confidence.

In 1964 Bolt heard that Alpine was interested in pneumatic echo sounders and reopened discussion with Mr. Beckmann with a view to granting a license to Alpine to use, but not to make and sell, the PAR gun and the process of using it. During such discussions Bolt reminded Mr. Beckmann of his and Alpine’s obligation under the secrecy agreement and warned against making disclosures or assisting others to make the gun or use the system.

During the discussions Mr. Beckmann induced Bolt to place one of its latest models in Alpine’s and his hands for use in testing it aboard their survey ships. They had that model in their possession at least three days. The negotiations continued for two months, Mr. Beck *745 mann and Alpine representing that they desired to evaluate the apparatus completely before they decided whether to conclude a license agreement. The complaint further alleged that during these negotiations Mr. Beckmann admitted that Alpine had made six devices and Lamont had made twenty-six.

Bolt prayed:

That Mr. Beckmann and Alpine should be enjoined during the pendency of the action and permanently thereafter from:

1. Divulging any features of its underwater pneumatic acoustical repeater and system as disclosed to them in July 1961 and November 1964;
2. building, using or incorporating any of the features thereof in the designs of others; and
3. from using them in geophysical surveys or like applications.

Bolt demanded the loss of profits, exemplary damages, court costs and attorneys’ fees.

Filed with the complaint was an affidavit by Mr. Chelminski, President of Bolt, who deposed that a study had been conducted during the year prior to April 6, 1965 of the feasibility of constructing a tunnel from France to England in connection with which surveys had been made of the configuration of the English Channel; that Alpine had done at least a portion of the Channel study; that Bolt had been contacted by the company that had made the study and informed that not as much detail of the Channel as it desired appeared in its study and that inquiry was made as to whether Bolt could supply the detail using its underwater pneumatic acoustical repeater and survey system.

Mr. Chelminski averred that Bolt’s device was ideally suited to provide the desired detail and that Alpine, being aware of Bolt’s secrets, might be tempted to unlawfully use them to obtain the Channel survey work in place of Bolt.

Upon the verified complaint the District Court issued an order directing that Mr. Beckmann and Alpine show cause why an injunction pendente lite should not issue against them in accordance with the prayer of the complaint. The order meanwhile temporarily restrained them from divulging the alleged secret features of the Bolt’s device and system and from building or using them in designs of others or in their own operations. Mr. Beckmann filed an affidavit in opposition to the application for the preliminary injunction in which he denied, among other things, the accuracy of the •version of the facts set forth by Bolt in its complaint and that of Mr.-Chelminski in his affidavit.

On an adjourned day of the order to show cause the District Court took evidence following which it filed an opinion 2 in which, among other things, it found that Bolt disclosed a trade secret to Mr. Beckmann in July 1961 and that Alpine was obligated not to “divulge the design to others, to build or use, or incorporate [it] in the design of other devices until a patent has been issued or denied.” It further found, however, that the “exact working plan of the devices manufactured by Alpine [for Lamont and others] differs from the design of the Bolt device * * *” and that “the construction of the word ‘design’ is a substantial issue and that issue is presently unresolved.” The application for preliminary injunction was therefore denied.

Thereafter Mr. Beckmann and Alpine filed an answer in which, among other things, they admitted that Bolt demonstrated its device to Mr.

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365 F.2d 742, 151 U.S.P.Q. (BNA) 520, 1966 U.S. App. LEXIS 5034, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bolt-associates-inc-v-alpine-geophysical-associates-inc-and-walter-c-ca3-1966.