Somat Corp. v. Combs

40 Pa. D. & C.2d 107, 1966 Pa. Dist. & Cnty. Dec. LEXIS 115
CourtPennsylvania Court of Common Pleas, Chester County
DecidedMay 25, 1966
Docketno. 1767
StatusPublished

This text of 40 Pa. D. & C.2d 107 (Somat Corp. v. Combs) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Chester County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Somat Corp. v. Combs, 40 Pa. D. & C.2d 107, 1966 Pa. Dist. & Cnty. Dec. LEXIS 115 (Pa. Super. Ct. 1966).

Opinion

Kurtz, J.,

The pleadings in this case consist of plaintiff’s complaint, defendants’ answer with new matter and a counterclaim.

In the complaint, it is alleged that plaintiff corporation had been and was engaged in the business of designing, manufacturing and selling certain unique and novel machines to be used in the destruction and disposal of waste, such as food waste (garbage), office waste (waste paper, typewriter ribbons, etc.), industrial waste, such as the waste material generated by manufacturing plants, and the worn out fiber beer cases of a brewer, and classified information and the like which various agencies of the government accumulate and no longer have use for; that some of its former employes, individual defendants in this action, had left its employ and were undertaking or about to undertake the design and manufacture of the same machines or [109]*109machines embodying the same mechanical and scientific principles by making use of trade secrets which they had learned and acquired while in plaintiff’s employ. The corporate defendant, it was alleged, was the agency through which the individual defendants would operate in this undertaking.

The complaint also averred that defendants Combs and Craig, on dates therein set forth, had executed and delivered to plaintiff stock option agreements, under the terms of which they bound themselves to remain in plaintiff’s employ for a period of at least two years, and that they had left plaintiff’s employment within the two-year period; that all of the individual defendants had executed and delivered to plaintiff agreements designated “Agreement as to Patents and Inventions”, which required them to and did, in fact, assign to plaintiff any patents or inventions discovered by defendants while so employed, and that they intended to breach the obligations which those agreements placed upon them.

It was also charged that defendants Combs and Craig, the former having been plaintiff’s president and the latter its vice-president, and both of whom had been directors, had, commencing on or about June 16, 1965, the date which it later developed was crucial in the lives of the various principals herein because of certain happenings which transpired at a directors’ and stockholders’ meeting of plaintiff corporation held in New York, entered into a conspiracy to terminate their employment with plaintiff, in violation of their agreements; to establish a new business in competition with plaintiff; to remove information, documents, designs, drawings, techniques, patents and like matters from the possession of plaintiff; to endeavor to remove from plaintiff’s employ a large number of its management, supervisory and skilled personnel; and to endeavor to destroy plaintiff as a going business concern [110]*110in order to obtain for themselves the business which plaintiff had theretofore conducted.

It was alleged that, pursuant to that conspiracy, certain activities along the lines charged were undertaken, and that unless these defendants were restrained, they would continue in this activity in violation of their agreements and the law, thereby causing plaintiff damage “in amounts which are substantial but not readily ascertainable or calculable”, and that plaintiff’s damage would be such as was “not compensable by money damages and hence irreparable”; consequently, said plaintiff, it had no adequate remedy at law.

Plaintiff sought the issuance of injunctions, both preliminary and permanent, restraining defendants from the continuance of this type of activity. . . .

Defendants’ answer put the allegations of the complaint in issue by denying that plaintiff was possessed of trade secrets; first, because the methods and techniques which it employed were not novel or unique, but were well-known in allied fields of industry; and next, because by the sale of said machines and the distribution of sales literature and drawings which were distributed to customers in connection with those sales, the information and data which plaintiff now seeks to prevent defendants from using has become disseminated and known to an extent where, if it ever was secret, it is no longer such. The answer challenged the effectiveness of the contracts upon which plaintiff based its claims for the purposes for which plaintiff sought to use them. It denied the existence of a conspiracy, as alleged by plaintiff, and denied that defendants were in possession of any papers, documents, data or other property of plaintiff of any description; consequently, said defendants, there was none such in existence which they could be compelled to return to plaintiff.

In their “New Matter”, defendants asserted that the documents labeled “Agreement as to Patents and In[111]*111ventions” were not supported by consideration, and they made the same assertion in connection with the stock option agreements. . . .

From the above resumé of the pleadings, it can be readily seen that the issues thus framed include the following: Was plaintiff the possessor of trade secrets, the use of which it could deny to defendants as constituting unfair competition? Did the stock option agreement and/or those having to do with the assignment of inventions and patents, etc., impose any restrictions upon the use by defendants of any information or other data acquired by them while still in plaintiff’s employ? Has a conspiracy to destroy plaintiff’s business been shown to have existed? . . .

Discussion

Plaintiff seeks primary relief by way of injunction plus an award of damages in the form of money. The injunction sought would recognize the validity of, and give effect to, the various assignments of ideas, designs and inventions executed by the individual defendants, and restrain the misappropriation and divulgence of information which plaintiff calls trade secrets, which it alleges defendants had acquired while in plaintiff’s employ, whether those secrets consisted of pricing procedures or quotation amounts, customers’ lists or technical knowledge having to do with the construction or assembling of the machinery which plaintiff produces and sells.

In our judgment, no injunctive relief may be granted. . . . We do not believe that we can conclude from the testimony before us that plaintiff’s customer lists, its bids or quotations, the plans and layouts of its prospective customers’ buildings or plants, or the technical knowledge as to the arrangement and operation of the various components of Somat equipment, including the relationship of those components to each [112]*112other, constitute trade secrets, the use or dissemination of which can here be enjoined.

In Van Products Company v. General Welding and Fabricating Company, 419 Pa. 248, 258 (1965), a case quite similar to this one, the Supreme Court reviewed the authorities relating to the law of trade secrets and laid down the following rules:

“The concept of trade secret is at best a nebulous one and has been variously defined by case and text authority. Restatement, Torts, §757, comment b, states that ‘a trade secret may consist of any formula, pattern, device or compilation of information which is used in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it.’ The prerequisites to recovery upon a cause of action alleging misappropriation of trade secrets was long ago set forth for Pennsylvania in Macbeth-Evans Glass Co. v. Schnelbach, supra, 239 Pa. at 87, 86 A.

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Bluebook (online)
40 Pa. D. & C.2d 107, 1966 Pa. Dist. & Cnty. Dec. LEXIS 115, Counsel Stack Legal Research, https://law.counselstack.com/opinion/somat-corp-v-combs-pactcomplcheste-1966.