Liggett Group, Inc. v. Sunas

437 S.E.2d 674, 113 N.C. App. 19, 30 U.S.P.Q. 2d (BNA) 1678, 9 I.E.R. Cas. (BNA) 208, 1993 N.C. App. LEXIS 1310
CourtCourt of Appeals of North Carolina
DecidedDecember 21, 1993
Docket9114SC957
StatusPublished
Cited by124 cases

This text of 437 S.E.2d 674 (Liggett Group, Inc. v. Sunas) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Liggett Group, Inc. v. Sunas, 437 S.E.2d 674, 113 N.C. App. 19, 30 U.S.P.Q. 2d (BNA) 1678, 9 I.E.R. Cas. (BNA) 208, 1993 N.C. App. LEXIS 1310 (N.C. Ct. App. 1993).

Opinion

JOHN, Judge.

This action for declaratory and injunctive relief and for compensatory and punitive damages arises out of the issuance on 9 May 1989 of U.S. Letters Patent No. 4,827,949 (the patent) to defendant Ernest C. Sunas (Sunas), a retired employee of plaintiff Liggett Group Inc. (Liggett). Sunas contends the trial court erred by entering partial summary judgment on 22 January 1991 which (1) ordered Sunas to assign the patent to Liggett, and (2) dismissed his counterclaims. He also argues the trial court erred by denying his motion for a new hearing and to amend the summary judgment order. We agree in part and reverse the entry of summary judgment as to Liggett’s initial claim and as to one of Sunas’ counterclaims.

The pleadings, depositions, affidavits and other materials before the trial court indicate Sunas, from 1954 until his retirement in 1987, worked as an analytic chemist in the Research Department of Liggett, a Durham-based corporation engaged in the manufacture of tobacco products. Throughout his employ, Sunas served as an employee-at-will with no written contract.

The function of Liggett’s Research Department was to study problems facing the tobacco industry with an aim towards developing new products and reducing manufacturing costs. One concern centered upon the cost of storing cured tobacco which must be properly aged before it can be manufactured into cigarettes. “Aging” is the chemical process where, over time, tobacco aroma and taste characteristics are enhanced resulting in tobacco suitable for consumer uses.

In the 1970s, Liggett began to experience financial difficulties, and a large number of Research Department employees consequently were discharged. Concerned about both his future and that of Liggett, Sunas began to consider ways of improving Liggett’s fortunes. In 1979, while watching his mother-in-law bake bread, Sunas hypothesized that the same chemical process which creates a “wonderful aroma” in baking bread could be used to age tobacco *22 rapidly. If so, this would have financial benefit for Liggett by reducing storage costs.

Sunas began researching the chemical process at work in baking bread, commonly known as the “Maillard reaction.” He eventually formulated an experiment by which he heated unaged tobacco treated with a simple sugar mixture. After a single experiment conducted on 19 February 1981, Sunas contacted Robert Kersey, Liggett’s Director of Research. Kersey, impressed with the results, authorized Sunas to continue work on this method of quick-aging tobacco.

After further experimentation and refinement, Liggett’s management approved a patent application for the quick-aging process. Sunas prepared a description and forwarded it to Liggett’s patent counsel. The initial patent application designated Sunas, Kersey, and R.H. Wallick as co-inventors, but Sunas objected to inclusion of the others. A revised patent request was prepared listing Sunas as sole inventor, but at some point Liggett decided against patenting the procedure. Nevertheless, Sunas continued to work on refining it and making it commercially useful.

In November 1986, Liggett offered some of its employees, including Sunas, a special early retirement program whereby the employee would receive an increase in pension benefits by taking early retirement. At the time of this limited offer, Sunas was 66 years old and the mandatory retirement age at Liggett was 70. Sunas accepted the program and retired on 1 March 1987. Sunas claims, and Liggett denies, he was induced to accept early retirement by a verbal promise to be re-hired as a special consultant earning $200 per day.

After learning he would not be re-hired, Sunas decided to patent the quick-aging process and employed a Durham law firm as his patent counsel. In preparing a description, Sunas used copies of the original Liggett patent request forms he had retained. He also utilized an official Liggett laboratory notebook regarding the procedure which he had obtained after his retirement.

Sunas never notified Liggett he was seeking a patent, but an application was ultimately submitted to the U.S. Patent Office in September of 1987. Thereafter, Sunas began to contact Liggett’s competitors in an effort to lease the process. Following an initial rejection of the application and subsequent modification thereto, *23 Sunas was issued Patent No. 4,827,949, entitled “Method of Treating Tobacco and Tobacco Produced Thereby.”

On 23 June 1989, after receiving notice of Sunas’ patent, Liggett instituted the instant lawsuit alleging six (6) claims: (1) a request for declaratory relief ordering Sunas to assign the patent to Liggett; (2) misappropriation of the quick-aging process; (3) breach of confidentiality by informing others of the process; (4) breach of fiduciary duties; (5) misappropriation of trade secrets; and (6) a request for injunctive relief to prohibit Sunas and others from utilizing the patented process.

After the trial court ordered temporary injunctive relief, Sunas answered the complaint, denying all material allegations and asserting several counterclaims.

On 18 October 1990, Liggett moved for summary judgment. By order entered 22 January 1991, the trial court granted Liggett partial summary judgment which (1) ordered Sunas to assign the patent to Liggett, and (2) dismissed all of Sunas’ counterclaims, but (3) expressly withheld determination regarding Liggett’s remaining claims.

On'28 January 1991, Sunas moved for (1) a new hearing and (2) an amendment to the summary judgment order. By order entered 14 May 1991, these motions were denied.

I.

Initially, we must resolve Liggett’s motion, filed in this Court, seeking dismissal of Sunas’ appeal as interlocutory. A grant of partial summary judgment, because it does not completely dispose of the case, is an interlocutory order from which there is ordinarily no right of appeal. N.C.R. Civ. P. 54(b) (1990); Britt v. American Hoist & Derrick Co., 97 N.C. App. 442, 444, 388 S.E.2d 613, 615 (1990). Such a prohibition promotes judicial economy by preventing fragmentary appeals. Blue Ridge Sportcycle Co. v. Schroader, 53 N.C. App. 354, 358, 280 S.E.2d 799, 801-02 (1981).

Nonetheless, in two instances a party is permitted to appeal interlocutory orders: first, where there has been a final determination of at least one claim, and the trial court certifies there is no just reason to delay the appeal, Rule 54(b); Davidson v. Knauff Ins. Agency, Inc., 93 N.C. App. 20, 24, 376 S.E.2d 488, 490-91, disc. review denied, 324 N.C. 577, 381 S.E.2d 772 (1989); and second, *24 if delaying the appeal would prejudice a “substantial right.” Knauff Ins., 93 N.C. App. at 24, 376 S.E.2d at 491. As the court below made no certification, the first avenue of appeal is closed.

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437 S.E.2d 674, 113 N.C. App. 19, 30 U.S.P.Q. 2d (BNA) 1678, 9 I.E.R. Cas. (BNA) 208, 1993 N.C. App. LEXIS 1310, Counsel Stack Legal Research, https://law.counselstack.com/opinion/liggett-group-inc-v-sunas-ncctapp-1993.