Eastman Kodak Co. v. Powers Film Products, Inc.

189 A.D. 556, 179 N.Y.S. 325, 1919 N.Y. App. Div. LEXIS 4714
CourtAppellate Division of the Supreme Court of the State of New York
DecidedDecember 5, 1919
StatusPublished
Cited by31 cases

This text of 189 A.D. 556 (Eastman Kodak Co. v. Powers Film Products, Inc.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Eastman Kodak Co. v. Powers Film Products, Inc., 189 A.D. 556, 179 N.Y.S. 325, 1919 N.Y. App. Div. LEXIS 4714 (N.Y. Ct. App. 1919).

Opinions

Lambert, J.:

This action is brought in equity to restrain the defendant Warren from entering the employ of the defendant Powers Film Products, Inc., and to restrain both defendants from the turning over by Warren to the defendant company of various trade secrets, etc. A temporary injunction was procured, containing a return date and upon the return, after amendment of the pleadings, the Special Term modified the injunction by eliminating therefrom the provisions restraining the defendant Warren from entering the employ of the defendant company and retention of the injunctive provisions as to the turning over of the trade secrets. The defendant Powers Film Products, Inc., also moved for a judgment upon the pleadings, so far as it was concerned, and the Special Term has denied that application. The Kodak Company appeals from the order modifying the injunction and the Powers Film Products, Inc., appeals from the order denying its motion for judgment.

The controversy grows out of the following facts: Upwards of ten years ago the defendant Warren entered the employ of the plaintiff in a minor position. During the course of his employment he has been gradually promoted until his present employment has been in the department having charge of the spreading of the emulsion upon films from which are made kodak films and motion picture films. The defendant Warren [558]*558entered this particular branch of the work in December, 1911, and has continued therein to the time of the commencement of this action.

The plaintiff is probably the largest manufacturer of raw film stock in the world. It has for years employed chemists and others skilled in that work to continue perfecting the processes for the making of such product. Such processes are not patentable and no effort is made to patent them. The plaintiff has, however, jealously guarded its processes so far as possible and maintained them as a secret asset, endeavoring in every way to prevent their reaching competitors. To this end, in October, 1915, it required the defendant Warren to execute an agreement attached to the complaint as Exhibit “ A,” reciting his employment, the turning over to him of knowledge of various processes and formulas, secret in character, and containing an agreement upon his part, among other things, that he would not disclose, either orally or in writing, to any person, any knowledge or information he might gain in the course of his employment, as to any processes of manufacture or formulas used by the plaintiff, and further, that upon the termination of his employment for the period of two years he would not directly or indirectly, at any point in the United States, except in the Territory of Alaska, engage in photographic business, either as manufacturer, dealer or employee, for another.

The defendant company was recently organized to engage in the manufacture of raw film products, similar in character to those manufactured by the plaintiff. It established its place of business in Rochester close to the place of business of the plaintiff. It solicited and received large orders prior to its actual venture in manufacturing. It then began an endeavor to hire away from the plaintiff various of its employees. The defendant Warren was not employed for any particular period of time, although he had, as before stated, been engaged with the plaintiff for upwards of ten years. The defendant company approached the defendant Warren with an offer for his employment, and such offer came to the knowledge of the plaintiff. One of plaintiff’s officials then brought to the attention of the defendant company the contract above described. A conversation with the defendant Warren [559]*559developed from him that an offer of more compensation from the plaintiff would avail nothing, as the defendant company-proposed to raise any offer made by the plaintiff, whatever it might be.

From the affidavits it is apparent that the purpose of the defendant company, in connection with its new venture in manufacturing, was to hire away from the plaintiff, irrespective of their contractual obligations, such of its experienced employees in this line of work as it might need in its business, thereby acquiring to itself the benefits of the training given by the plaintiff to these various employees in this line of work, thus starting with an experienced manufacturing organization.

The complaint fairly sets forth that the process of manufacture by the plaintiff has been evolved from years of study and at great expense and is maintained as a secret process. It also fairly shows that the course of employment and training of the defendant Warren has been such as to bring him in personal touch with and to give to him personal knowledge of all of the secret processes of manufacture and formulas entering into composition of plaintiff’s product. This is the defendant Warren’s line of work. Such knowledge as he has of it he has gained from the plaintiff. It is for this particular fine of work that the defendant desires his services.

The propriety of the temporary injunction, so far as it concerns the turning over of trade secrets, is not before us, there being no appeal from that portion of the order. The Special Term has, however, held that the contract relative to entering into the employ of others in the like business, for the period of two years, is void, as against public policy, in that it undoubtedly restrains the liberty of the individual and prevents his gaining a means of livelihood, except in plaintiff’s employ. (See Eastman Kodak Co. v. Warren, 108 Misc. Rep. 680.)

The defendant company also urges that the business of the plaintiff, as it is conducted, constitutes an unlawful monopoly as was recently so held in the Federal court and that to restrain this employment is to give the aid of this court to the perpetration of a fine of conduct falling within the criminal anti-trust acts of the Federal government.

[560]*560These two theories we may dispose of in inverse order. This court is not concerned with whether or not the plaintiff is a trust, within the meaning of the Sherman and Clayton Acts. We have no province to enforce those acts and no jurisdiction to determine the. precedent fact of the existence of an unlawful combination. The Sherman Act is a criminal statute and provides within it for the means of its enforcement. Those means are exclusive and to the Federal courts alone is consigned the duty of enforcement of those provisions. The Clayton Act is supplementary to the Sherman Act and its scope is limited by the Sherman Act. (26 U. S. Stat. at Large, 209, chap. 647; 38 id. 730, chap. 323.)

The courts of this State are now committed to the holding that our equity courts will not take cognizance, as a basis for relief of any claimed violation, threatened or actually continuing, of either the Sherman or the Clayton Act. (Venner v. N. Y. C. R. R. Co., 94 Misc. Rep. 671, 679; affd., 177 App. Div. 296, 326; affd., 226 N. Y. 583; Locker v. American Tobacco Co., 121 App. Div. 443; Wilder Mfg. Co. v. Corn Products Co., 236 U. S. 165.) In the Venner case a minority stockholder sought to prevent the consolidation of the New York Central with various other railroad systems upon the ground, among others, that such consolidation would violate the plain provisions of the Sherman and Clayton Acts.

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Bluebook (online)
189 A.D. 556, 179 N.Y.S. 325, 1919 N.Y. App. Div. LEXIS 4714, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eastman-kodak-co-v-powers-film-products-inc-nyappdiv-1919.