Furr's Inc. v. United Specialty Advertising Company

338 S.W.2d 762, 127 U.S.P.Q. (BNA) 551, 1960 Tex. App. LEXIS 2510
CourtCourt of Appeals of Texas
DecidedAugust 3, 1960
Docket5450
StatusPublished
Cited by17 cases

This text of 338 S.W.2d 762 (Furr's Inc. v. United Specialty Advertising Company) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Furr's Inc. v. United Specialty Advertising Company, 338 S.W.2d 762, 127 U.S.P.Q. (BNA) 551, 1960 Tex. App. LEXIS 2510 (Tex. Ct. App. 1960).

Opinion

FRASER, Justice.

This is an appeal from an injunction order emanating from the District Court of Midland County, Texas. The temporary injunction enjoined appellant from continuing the use of an advertising plan in its grocery stores, which plan was known as the “Cash.Circle Card”, with accompanying store banners and bag staffers. This controversy arose in the following manner:

In May, 1959, a Mr. Goulding, sales representative for appellees, called on appellant at its home or general office, .in Lubbock, Texas. Goulding made this appointment and call in an effort to persuade appellant to purchase the product of his employer, which was called the “Cash Surprise Bonus Card.” Bag staffers and bankers were to be furnished along with the purchase. These bonus cards had been prepared and developed by appellees. They were oblong cards with various money amounts printed around the periphery of the card. These amounts were from ten cents up to five dollars, and were to be punched out by the checker at the grocery store in accordance with the amount of the *764 customer’s purchase. When the card was fully punched out, the customer would receive $1 as a bonus, and then an opportunity to get a surprise bonus. There was a small black square sewed in the card which could only be removed by a store employee or official. If the customer could answer the simple question contained therein, he might receive a bonus from one to one thousand dollars. Another feature of the card was that the customer could come in on Monday and get a free $2 punch, without having to purchase anything. There was no charge for these cards, and they were solely for the purpose of promoting sales in the grocery store. The card also contained a calendar device to keep track of the free punches, and the name of the store and some additional information or instruction. The appellant did not purchase any of these cards at the May meeting. In September of the same year, appellant called Goulding, or ap-pellees, for another conference, at which time they purchased $10;000 worth of these cards, bag stuffers and banners. Shortly thereafter, they purchased another $2,200 worth. The record indicates that Goulding notified them that they could not buy cards for use in Midland or Odessa, as he had given the exclusive use of such cards in those two towns to a competitor of appellant, known as “Food Mart.” Appellant bought the merchandise for use in a number of its other stores.

Shortly after this purchase, in September 1959, Food Mart began using the cards in the Midland-Odessa area. Appellant then asked an advertising agency in Lubbock to produce a promotion that would meet the competition of the use of appellees’ cards by Food Mart in Midland and Odessa. A Mr. Webster, óf the advertising agency, after some time produced the design involved here, and which was named “Cash' Circle Cards”. The Cash Circle Card involved the same method as appellees’ card. It seems to differ only in that it is round, or circular; and, instead of punching out amounts of money, they are “branded”. The arrangement of the card is somewhat different, but it must be admitted' that it is substantially the same, and has the sewed-in square for the surprise bonus,, as does appellees’ card.

Appellees brought suit for a considerable-sum of money, and asked that appellant be-restrained from using .its Cash Circle Cards..

As stated in the briefs, this is a “trade-secret” case, and does not involve copyright or patent problems. Appellees state-in their brief that it does not involve a claim of unfair competition, as such is-generally considered.

We believe that the issues that are here-decisive are: Do the Cash Surprise Bonus-Cards of appellees constitute a trade secret;, and, if so, was such obtained unfairly by-appellant by means of a breach of confidence ?

There is some discussion of unfair competition, but we do not believe that principle-applicable here, because the necessary elements, which we will not detail, are not in: evidence.

We will take up, first, the question of whether or not the bonus cards of appellees were so constructed and developed', as to constitute a “trade secret”. After-studying the record and the authorities, we-have reached the conclusion that they were-not. The idea of punch cards, or bonus-cards, was not only old, but had been used in many forms and manners and cards similar to these were currently in use at the-time of the sale, in many other cities and. states, and had been advertised in the newspapers very extensively. The card speaks-for itself. The newspaper advertisements,, the bag stuffers and banners merely advertise and urge people to take advantage of' these cards, which were given out free. The cards themselves were self-explanatory-on the face thereof. Appellant testified that it had used a somewhat similar device in. 1950, whereby a customer, by virtue of his-purchases, could buy cooking ware at a. reduced price. Cards similar to these here involved were, and had been, in active use- *765 in grocery stores in Los Angeles, Chicago, Fort Worth, etc. There are other types of punch cards, or bonus cards, in the record as evidence, and examination of these, coupled with the testimony of witnesses, does not establish, in our opinion, anything about these cards that would constitute a trade secret. It is true that the cards were developed and improved over the years by the appellees, but they were exhibited to and used by the public, and had been explained and advertised to the public for many months before appellant purchased them. We do not believe that the sewed-in square creates sufficient distinction to make this particular card such as could be protected under the trade secret doctrine. As was said by the Supreme Court: “The subject matter of a trade secret must he secret.” Wissman v. Boucher, 150 Tex. 326, 240 S.W.2d 278, 280.

The court, in the above case, further says:

“ * * * the exposure of the device to the public by advertisement or sale definitely operates to destroy any legal protection the claimed originator might otherwise assert on the basis of a trade secret * * * matters which are completely disclosed by the goods which one markets cannot be his secret.”

Again, these cards are completely explained by the language on the face thereof. It constitutes a complete disclosure of the method or scheme. The store in the cities named above had informed the public, by newspaper advertising, banners and bag stuffers, of the entire method of this cash bonus card. In other words, the entire device, or method, had been exhibited to the general public for many months before appellant made its purchase. It seems to us to be a merchandising device, not especially new in design or method, and containing no particular secret. While the cards here involved are certainly similar, we believe it is only that similarity which would necessarily occur when anyone used the punch card bonus idea, which is by no means a new or secret idea. To hold otherwise, we think, would be to encourage and condone a monopoly and create the effects of a copyright where no copyright exists. It seems to us that these cards are not a secrét, but more of a promotion of doing business or advertising.

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Bluebook (online)
338 S.W.2d 762, 127 U.S.P.Q. (BNA) 551, 1960 Tex. App. LEXIS 2510, Counsel Stack Legal Research, https://law.counselstack.com/opinion/furrs-inc-v-united-specialty-advertising-company-texapp-1960.