Simplex Wire & Cable Co. v. Dulon, Inc.

196 F. Supp. 437, 130 U.S.P.Q. (BNA) 143, 1961 U.S. Dist. LEXIS 5931
CourtDistrict Court, E.D. New York
DecidedJuly 10, 1961
DocketNo. 61-C-2
StatusPublished
Cited by1 cases

This text of 196 F. Supp. 437 (Simplex Wire & Cable Co. v. Dulon, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Simplex Wire & Cable Co. v. Dulon, Inc., 196 F. Supp. 437, 130 U.S.P.Q. (BNA) 143, 1961 U.S. Dist. LEXIS 5931 (E.D.N.Y. 1961).

Opinion

RAYFIEL, District Judge.

The plaintiff is a Massachusetts corporation and maintains its principal place of business in Cambridge, in that State. The defendant Dulon, Inc., hereinafter referred to as Dulon, is a Delaware corporation and maintains its principal office in this District. The defendants Wong, Lockridge, Pensa and Poliak are citizens of the State of New York. The remaining defendants, Wilkins, Jones and Chan, have not been served with process herein, and the complaint has been dismissed as to them.

This is an action for a permanent injunction, and the plaintiff has moved for an order enjoining the defendants, pendente lite, from using or disclosing secret processes, formulae, data, information or knowledge alleged to have been obtained or acquired by them as hereinafter stated, or from making or selling products utilizing the same. The defendants stipulated to the entry of a temporary restraining order to be ef[438]*438fective until the determination of this application.

The hearing on the application for a preliminary injunction commenced on February 9, 1961, continued on February 16, 17 and 20, and was concluded on February 21. Considerable oral and documentary evidence was introduced, from which it appears, inter alia, that for various periods the individual defendants were in the employ of Hi Temp Wires, Inc., a New York corporation, hereinafter referred to as Hi Temp. Each of said defendants, except Jones, upon entering such employ, signed an agreement which, so far as is here pertinent, provided, in substance, that he would not, during such employment or thereafter, disclose or authorize others to disclose any trade secrets, manufacturing processes, formulae, or any other confidential information or knowledge relating to Hi Temp’s business which he may have acquired through or by reason of such employment.

In September, 1960 Hi' Temp was merged into the plaintiff and thereafter its business was, and still is, conducted as a division of the plaintiff under the name Hi Temp Wires Co. It is engaged, as it was prior to the said merger and during the course of its employment of said defendants, in the manufacture and sale of products made wholly or in part from polytetrafluroethylene, a chemical commonly known under its trade name, Teflon, and various other articles used in the treatment thereof. Included among its items was the insulation of wire by various processes employing Teflon tape which it purchased from then available commercial sources, none of which processes, it concedes, is secret. Thereafter it began to use machinery designed to extrude Teflon onto wire. The machinery thus used, it likewise concedes, is not a trade secret.

It contends, however, that certain devices, consisting of so-called tips, dies and ovens, which it designed and uses to facilitate production, are trade secrets.

In or about mid-1958 Hi Temp began to make its own tape, using part of its production to meet its own manufacturing requirements, and selling the remainder to the trade. The insulation process then employed by Hi Temp was to spirally wrap the wire with the tape which it manufactured for that purpose.

Wire, insulated by the use of Teflon, whether by the extrusion process or when wrapped with tape, has a slippery surface, and resists adhesion by other materials. Various techniques have been developed and are now in use which so change the surface characteristics of Teflon-insulated wire as to permit other materials to adhere to it, or, as the trade has it, to make it “bondable” with such materials. These methods are well known in the industry. The plaintiff claims, however, that Hi Temp has developed, and uses, certain secret processes to accomplish that purpose.

Further, the plaintiff claims that it has developed certain inks which, unlike ordinary inks, can effectively mark and identify various types of Teflon-insulated wire. It concedes that there are other inks in use for that purpose, but it maintains that its product is different and more efficient than the others.

And, finally, it claims that over the years it has acquired a considerable body of knowledge concerning the requirements and buying habits of those who use its products, and that that knowledge is confidential and a trade secret.

In brief, it is the plaintiff’s contention (1) that on various dates the several individual defendants entered the employ of Hi Temp, each of them, except Jones, executing a nondisclosure agreement, (2) that during the course of and incidental to such employment confidential knowledge and information respecting those of the aforementioned methods, processes, etc. claimed to be trade secrets was divulged to or acquired by them, and (3) that in violation of the said nondisclosure agreement the said defendants, while still in the employ of Hi Temp and the plaintiff, conspired to and did appropriate and use said trade secrets in competition with the plaintiff.

[439]*439These are the claimed trade secrets alleged to have been appropriated and used by the defendants:

(a) the dip coating process for insulating wire with Teflon,

(b) procedure for extruding Teflon onto wire,

(c) a process for manufacturing Teflon tape,

(d) a process for making Teflon-insulated wires “bondable”,

(e) formulae for inks used .for marking or striping Teflon-insulated wires, .and

(f) certain sales information respecting the standards and specifications required by its customers and the identity of the buyers who purchase plaintiff’s products.

As to (a):

The plaintiff concedes that the dip-coating method of insulating wire with Teflon is well known, but it claims that in its process it uses a secret chemical which facilitates production.

As to (b):

After describing in some detail the procedure for extruding Teflon onto wire the plaintiff concedes that such extrusion machines are commercially available,— there are at least two companies which manufacture them — but claims that it has added to the machine a tip and die of its own design, as well as an oven made to its own specifications, thereby making the machine operate more effectively.

As to (c):

It is conceded by the plaintiff that the procedure for the manufacture of Teflon •tape is described in the available literature. It consists, according to the plaintiff, of the following separate operations: (1) extruding, (2) calendering to the desired thickness (passing the tape through a set of rollers which flatten the ribbon to a predetermined thickness), (3) extracting the extrusion oils.

The plaintiff claims that it has designed its equipment so that it can perform all of these operations in tandem without stopping. It claims that its die is of a unique design which permits a thin ribbon of Teflon to be extruded which makes it more malleable. It also claims that it extracts the extrusion oils by means of heat (the passage of the tape through an oven) and that this combination of factors is its secret.

As to (d):

The plaintiff concedes that there are three well known methods of increasing Teflon’s “bondability” with other materials. Those are (1) sodium or naphthelene or chemical etching method (2) the graft polymerization or irradiated treatment method and (3) the ludox method.

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196 F. Supp. 437, 130 U.S.P.Q. (BNA) 143, 1961 U.S. Dist. LEXIS 5931, Counsel Stack Legal Research, https://law.counselstack.com/opinion/simplex-wire-cable-co-v-dulon-inc-nyed-1961.