Sachs v. Cluett, Peabody & Co.

177 Misc. 695, 51 U.S.P.Q. (BNA) 93, 31 N.Y.S.2d 718, 1941 N.Y. Misc. LEXIS 2444
CourtNew York Supreme Court
DecidedSeptember 30, 1941
StatusPublished
Cited by8 cases

This text of 177 Misc. 695 (Sachs v. Cluett, Peabody & Co.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sachs v. Cluett, Peabody & Co., 177 Misc. 695, 51 U.S.P.Q. (BNA) 93, 31 N.Y.S.2d 718, 1941 N.Y. Misc. LEXIS 2444 (N.Y. Super. Ct. 1941).

Opinion

Shientag, J.

This is a motion by the defendant to dismiss the complaint on the ground that the cause of action set forth therein is barred by the Statute of Limitations. The action is to compel an accounting by defendant of all profits claimed to have been made by it in the use and employment of a certain secret process which plaintiff alleges he discovered, and to restrain the defendant from further use of this process in violation of the agreement entered into between the parties.

The complaint sets forth that prior to 1921 plaintiff had developed a novel, original and useful principle for use in the shrinking of cotton cloth and other fabrics, and invented and constructed a novel and original machine useful in practicing this principle and in the shrinking of cloth. The plaintiff maintained this principle and his machinery in complete secrecy, although he made commercial use thereof which resulted in profits to himself. Plaintiff applied the trade name of saxonizing ” to the process and the cloths and fabrics which had been processed were referred to by him as “ saxonized ” cloths.

The complaint then alleges that prior to the year 1921 the defendant was engaged in the business of manufacturing shirts, collars and other garments of cotton cloth. In that year plaintiff informed the defendant that he had conceived and developed the principle before referred to. The defendant requested the plaintiff to subject certain sample quantities of cloth and fabrics furnished by the defendant to the “ saxonizing ” process and the defendant thereupon delivered to plaintiff such sample for processing so that the defendant might subject such processed cloth to inspection and tests. After inspecting and testing the cloth, defendant stated that it was interested in determining whether the “ saxonizing ” process could be economically employed.

• In order to induce the plaintiff to disclose to the defendant the principle of plaintiff’s process and the machinery used in connection therewith, and in consideration of such disclosure, the defendant agreed “ to treat the principle so disclosed and the machinery so exhibited in the strictest confidence and would make no disclosure or use thereof or any part thereof for its own use or benefit or for the use or benefit of any other person, firm or corporation unless and until the plaintiff and the defendant would mutually agree on a basis of compensation which should be paid to the plaintiff by the defendant for and in respect to the use of said principle and said machinery or other machinery for utilizing' said principle by the defendant and for or in respect to any other or different use or exploitation thereof by the defendant in and about its own business or in and about the business of others.”

[697]*697Pursuant to this agreement, the complaint continues, plaintiff disclosed his novel principle to the defendant and exhibited his machinery in the year 1921. Defendant, however, after receipt of the process and machinery stated that it was not interested in the “ saxonizing ” process and, therefore, defendant did not enter into any agreement with the plaintiff as to the payment of compensation for the defendant’s use of similar machinery or of the process. On the contrary, in violation of plaintiff’s property rights, the defendant surreptitiously set about the investigation of the process and the' machinery and experimented therewith and devised various machines which employed the principle of “ saxonizing.” These machines differ from the machine which the plaintiff had exhibited to the defendant only in unessential details. Thereafter the defendant applied to the United States government and to foreign governments for letters patent covering the machines thus constructed by it. When the patents were obtained the defendant, in violation of plaintiff’s rights and to the profit of the defendant, employed the “ saxonizing ” principle and the machinery covered by the patents in its own business. The defendant also licensed others to manufacture such machinery.

The complaint further alleges that the defendant persists in employing the “ saxonizing ” process, but refers to the process as “ sanforizing ” and continues to license others to use the name sanforizing ” and to use the machinery hereinbefore referred to. By obtaining the patents a disclosure of plaintiff’s process has been made, so that upon the expiration of the patents the public will have the free right to employ the same and the value of plaintiff’s invention and secrets will be lost. Accordingly, plaintiff seeks to compel the defendant to assign to him the patents which have been issued so that plaintiff may have the enjoyment thereof during the remaining life of the patents, to restrain the defendant from further use of the process and machinery, and for an accounting.

The defendant did not answer the complaint but moved on affidavits to dismiss it on the ground that it is barred by both the six- and ten-year Statute of Limitations. The defendant urges that plaintiff’s action is one for breach of contract, and since the breach occurred in 1930 and the action was not commenced until January 29, 1941, it is outlawed by the statute.

The plaintiff, on the other hand, contends that while his rights originally arose out of contract, without which he would have had no cause of action at all, after the contract was made, he had fully protected himself, his secret process became clothed with all the incidents of a property right and there became available to him all remedies appropriate for the protection of that right. Plaintiff’s [698]*698position is that his secret process and the secret machinery which he had devised, together with the trade name which he had applied to the process, constituted items of property such as the law will protect from infringement; that each separate infringement of this property by the defendant constitutes a separate wrong for which the plaintiff may maintain an action at law on the case against the defendant for damages; and that the continuance of these wrongs gave rise to succeeding causes of action, each of which may be barred by the Statute of Limitations within the prescribed period after the separate wrong is committed; that the plaintiff need not resort to a multiplicity of suits but, in order to avoid such, may at any time proceed with the injunction to restrain the defendant from committing further wrongs and recover from the defendant any profits made during the period not barred by the Statute of Limitations.

This motion presents two questions for solution: (1) What is the nature of plaintiff’s right in the secret process? (2) What remedies, if any, are available to him?

1.1 am of the opinion that the plaintiff has a property right in his secret process which equity will protect so long as he maintains complete secrecy with regard thereto. (Tabor v. Hoffman, 118 N. Y. 30; Fougera & Co., Inc., v. City of New York, 178 App. Div. 824; affd., 224 N. Y. 269; Jewelers’ Mer. Agency v. Jewelers’ Pub. Co., 155 id. 241; Dr. Miles Medical Co. v. Platt, 142 Fed. 606; Herold v. Herold China & Pottery Co., 257 id. 911; Peabody v. Norfolk, 98 Mass. 452; Salomon v. Hertz, 40 N. J. Eq. 400; 2 A. 379.) The Appellate Division in the case of Fougera & Co., Inc., v. City of New York said:

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Bluebook (online)
177 Misc. 695, 51 U.S.P.Q. (BNA) 93, 31 N.Y.S.2d 718, 1941 N.Y. Misc. LEXIS 2444, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sachs-v-cluett-peabody-co-nysupct-1941.