Furr's, Inc. v. United Specialty Advertising Company

385 S.W.2d 456, 144 U.S.P.Q. (BNA) 513, 1964 Tex. App. LEXIS 2445
CourtCourt of Appeals of Texas
DecidedNovember 25, 1964
Docket5664
StatusPublished
Cited by42 cases

This text of 385 S.W.2d 456 (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, 385 S.W.2d 456, 144 U.S.P.Q. (BNA) 513, 1964 Tex. App. LEXIS 2445 (Tex. Ct. App. 1964).

Opinion

PRESLAR, Justice.

This is a “trade secret” case which also involves unfair competition and conspiracy. After a trial by jury, appellees (as plaintiffs) recovered judgment against appellants Furr’s and the Webster, Harris & Welborn Advertising Agency for damages in the amount of $60,000.00, and a permanent injunction by which the appellant-defendants were enjoined from making, using or distributing a system and device known as the “Cash Circle Card” program, or any other advertising program, scheme or device the same, or substantially the same, as plaintiffs’ ■Bonus Card program or system. Plaintiffs obtained a temporary injunction which was reversed by this court in Furr’s Inc. v. United Speciality Advertising Company, Tex.Civ.App., 338 S.W.2d 762 (1960), writ of error refused, n. r. e., and reference is made to that case for greater details.

Appellants present some 48 assignments of error, grouped for convenience of argument. We do not feel it necessary to discuss each individually, as the disposition of some will make the consideration of others unnecessary. The case will be reversed and rendered.

We first take up appellants’ contention that this court’s prior decision on the temporary injunction phase of the case determined, as the law of the case, that no trade secret existed and no confidential relationship existed between the parties. We feel that those issues were so distinctly put into issue and so fully developed and brought forward on appeal as to make their determination final as to the parties here involved and their privies. They were so tried and determined as to come within the rule followed by this court in Texaco Inc. v. Parker, Tex.Civ.App., 373 S.W.2d 870 (err. ref., n. r. e.), which held that, even though in the strict sense, the decision on appeal from the granting or refusal of a temporary injunction may not be res judicata of the issues on final hearing, it may become the law of the case as to the legal principles declared. This is an exception to the general rule that an interlocutory judgment will not support a plea of res judicata, but it is a well-founded exception where the parties elect to distinctly put in issue a right or question of fact, as a ground of recovery or defense, and have it directly determined by the courts. It is supported by the authorities. Birchfield v. Bourland, Tex.Civ.App., 187 S.W. 422; International Longshoremen’s Ass’n., Independent v. Galveston Mar. Ass’n., Tex.Civ.App., 358 S.W.2d 607; Baker v. Hill, Tex.Civ.App., 35 S.W.2d 779 (wr. dism.); Hayden v. City of Houston, Tex.Civ.App., 305 S.W.2d 798 (wr. ref., n. r. e.); Hudspeth v. Guggenheim, Tex.Civ.App., 12 S.W.2d 238 (wr. dism.) Its application depends in each case on what was done. Wilson v. Abilene Independent School Dist., Tex.Civ.App., 204 S.W.2d 407 (err. ref., n. r. e.). In the case before us, the parties fully litigated the two issues in question. This is reflected by this court’s prior opinion:

“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?”

The opinion then reviews the evidence and wealth of exhibits and the applicable law, and reaches the conclusion which was decisive of the appeal:

“Therefore, because we do not believe there is a trade secret here involved, and because we do not believe that any information that appellant’s advertising agency might have used was improperly obtained or obtained through breach of confidence, we must hold that there was not sufficient reason or justification to *459 warrant tlie trial court in granting the injunction.”

Appellees seek to avoid this holding by urging that they have now obtained jury findings as to ultimate facts, and that an additional party defendant has been added. We do not think that has any particular bearing on the res judicata question, because the evidence and established facts being the same, what matter if found by the court or the jury? On the issue of trade secret, the evidence is more voluminous, but its quality is unchanged, and no contention is made that there have been any additional developments or changes in the factual set-up which brought about the suit. On the issue of confidential relations the evidence is unchanged. And the addition of a party privy, appellant Furr’s advertising agent, has not brought about any change in the facts passed on, and it does not in any way alter the question or issues of trade secret and confidential relationship.

In addition to our holding that the law of the case has been established, we are of the further opinion that the facts of the present trial do not permit appellees to recover on the theory of what they call “theft of trade secrets”, or any other theory of protection of trade secrets, for the evidence on the present hearing fails to establish any confidential relationship existing between the parties for the breach of which an action would lie. Assuming a trade secret, the existence of some duty owed in connection therewith, and its breach, becomes our pertinent inquiry.

One who does not wish to make disclosure of his secret in return for the term protection of the patent laws, or otherwise protect it specifically by contract, can still be protected if his disclosure is made in confidence so as to place .the other party under a duty to keep his secret. It is a well-settled rule that equity will grant relief when one breaches his confidential relationship in order to unfairly use a trade secret. Luccous v. J. C. Kinley Company, 376 S.W.2d 336 (S.Ct.1964); Hyde Corporation v. Huffines, 158 Tex. 566, 314 S.W.2d 763; K & G Oil Tool & Service Co. v. G & G Fishing Tool Serv., 158 Tex. 594, 314 S.W.2d 782. The owner of the secret must do something to protect himself. He will lose his secret by its disclosure unless it is done in some manner by which he creates a duty and places it on the other party not to further disclose or use it in violation of that duty. The rule of the American Law Institute Restatement of the Law, as set forth in Hyde v. Huffines, supra, by the Supreme j Court, is:

“ ‘One who discloses or uses another’s trade secrets, without a privilege to do so, is liable to the other if (a) he discovers the secret by improper means, or (b) his disclosure or use constitutes a breach of confidence reposed in him by the other in disclosing the secret to Mm * * 4 Restatement of Torts § 757.” (Emphasis ours).

Hyde v.

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Bluebook (online)
385 S.W.2d 456, 144 U.S.P.Q. (BNA) 513, 1964 Tex. App. LEXIS 2445, Counsel Stack Legal Research, https://law.counselstack.com/opinion/furrs-inc-v-united-specialty-advertising-company-texapp-1964.