Mead Corp., Diconix, Inc., Successor v. Lane

560 N.E.2d 1319, 54 Ohio App. 3d 59, 1988 Ohio App. LEXIS 3673
CourtOhio Court of Appeals
DecidedSeptember 8, 1988
Docket1089
StatusPublished
Cited by17 cases

This text of 560 N.E.2d 1319 (Mead Corp., Diconix, Inc., Successor v. Lane) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mead Corp., Diconix, Inc., Successor v. Lane, 560 N.E.2d 1319, 54 Ohio App. 3d 59, 1988 Ohio App. LEXIS 3673 (Ohio Ct. App. 1988).

Opinion

Whiteside, J.

Defendants, Paul M. Lane and Ink Jet Products, Inc., appeal from a judgment of the Ross County Court of Common Pleas and raise seven assignments of error as follows:

“1. The court erred as a matter of law in failing to require plaintiff to prove its cause of action by clear and convincing evidence.

“2. The court erred as a matter of law in holding that the fact of the existence of a non-exclusive license between plaintiff and the * * * [ABC] Ink Company can constitute a trade secret of plaintiff’s so as to create standing in plaintiff to prevent the use of a similar non-exclusive license between defendant and the * * * Ink Company.

“3. The court erred to the prejudice of the defendants in denying defendants’ motion to dismiss the complaint for failure to join an indispensable party, which motion was made at the conclusion of plaintiff’s case.

“4. The court’s finding that the plaintiff made a reasonable effort to prevent the production processes for its BW100 ink and the purge fluid from disclosure is against the manifest weight of the evidence.

“5. The trial court’s finding that the fluid formulas at issue were not in the public domain is against the manifest weight of the evidence.

“6. The court erred to the prejudice of defendants in denying defendants an opportunity to fully develop evidence relevant to the equitable maxim of clean hands by (1) vacating the joinder of the additional parties, Roger Gamblin and Bradford Chemical Company, and (2) quashing the subpoena duces tecum served upon Roger Gamblin and the Bradford Chemical Company. The court further erred in failing to consider competent, uncon-tradicted evidence indicating plaintiff’s lack of clean hands.

“7. The trial court erred as a matter of law in issuing a permanent injunction which does not comply with the mandates of Rule 65 of the Ohio Rules of Civil Procedure.”

Plaintiff, Mead Corporation, brought this action seeking a preliminary and permanent injunction en *60 joining defendants from utilizing trade secrets of plaintiff for the production of charge plates, orifice plates or jet printing inks, from selling any such plates or inks through use of plaintiff’s trade secrets, and from disclosing any such trade secret of plaintiff to any third party and enjoining defendant, Paul M. Lane, from making further disclosure of any trade secret of plaintiff to any officer, employee or agent of defendant, Ink Jet Products.

In the complaint, plaintiff alleged that it is a national leader in the development of ink jet printing systems, including charge plates and orifice plates, and that its systems require a jet printing ink having special characteristics, and that such plates and inks are produced through secret processes developed at great expense by plaintiff. The complaint further alleges that defendant Lane is an employee and principal shareholder of defendant, Ink Jet Products, which is producing or making preparation to produce charge plates, orifice plates and jet printing ink in competition with plaintiff.

The complaint further alleges that from September 22, 1964 to May 31, 1982, defendant Lane was employed by plaintiff in positions of special trust and confidence making him a key participator in the research leading to the development of plaintiff’s orifice plate and charge plate production processes and, also, had full access to plaintiff’s secrets relating to production of jet printing inks. The complaint further alleges that in 1970, defendant Lane signed an “Inventions Agreement” acknowledging an obligation of confidence in connection with secrecy of information. Defendants filed an answer to the complaint and plaintiff filed an amended complaint in which the allegations are concentrated upon defendants’ alleged use of plaintiff’s secrets relating to the production of jet printing ink and purge fluids. A 1964 Inventions Agreement allegedly signed by defendant Lane was attached to the amended complaint. Defendants denied both that the inks and purge fluids produced by plaintiff either have special characteristics or were produced by secret processes developed at great expense. Defendants also denied that defendant Lane was aware of the secrecy of information with which he was entrusted as an employee and denied that he violated any obligation of confidence by disclosing information to defendant Ink Jet Products. Defendants also assert other defenses, including those of satisfaction, release, laches, clean hands, and unlawful restraint of trade. Defendants attempted to assert two additional counterclaims, but eventually were denied leave to do so by the trial court.

During the course of these proceedings plaintiff has changed and, at this time, Diconix, Inc. has been substituted as party-appellee in place of plaintiff, Mead Corporation, and the title of the action has been amended to include the designation following “Mead Corporation,” of “Diconix, Inc., Successor.”

The matter eventually came on for trial, and the trial court found for plaintiff, making extensive and detailed findings of fact including the following:

“1. The plaintiff, Mead Corporation, is a major paper and forest products company headquartered at Dayton, Ohio. In the late 1960’s, plaintiff began work on the development of an ink jet non-contact printing process which eventually became capable of printing 60,000 lines of text per minute. It utilizes 48 million droplets of ink per second. The droplets are computer controlled — the printing droplets striking the paper and the nonprinted areas have droplets di *61 verted electrically so that they are recirculated back through the printing machine. * * *

“2. The defendant, Paul M. Lane, began work at the Mead Corporation, Chillicothe, Ohio, as a laboratory assistant on September 21, 1964. * * * Upon initial employment, he signed a ‘nondisclosure agreement’ which provided that he would never reveal to anybody any information, knowledge or data concerning inventions, processes; or, in general, secret or confidential affairs of plaintiff. * * * In 1969, defendant, Paul Lane, became involved in jet printing project.

“3. Early in the development process, fountain pen inks were available on the commercial market. From an early research publication, plaintiff discovered these inks could be used for jet printing. Ink manufactured by ABC company worked well in the print head. As modifications progressed, it was found that problems arose with the use of commercial ink. * * * The commercial ink caused corrosion of the orifice which affected the print life of the plate. Ink drying time was important. In short, chemical compounds were added to the commercially available ink to achieve compatibility with the print head. Environmental standards had to be met to protect the users of the product. * * *

“3 [sic]. A purge fluid also had to be developed to clean out the printer system after the printing job was completed.

“4. In the early 1970’s, the Chilli-cothe research on digital printing was transferred to Dayton, Ohio Research Park. Paul Lane was transferred with the project. At about this time, the plaintiff decided that the ink jet printing process had commercial possibilities. On September 21, 1970, Paul Lane executed a second agreement which essentially provided:

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Bluebook (online)
560 N.E.2d 1319, 54 Ohio App. 3d 59, 1988 Ohio App. LEXIS 3673, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mead-corp-diconix-inc-successor-v-lane-ohioctapp-1988.