Sylmark Holdings Ltd. v. Silicone Zone International Ltd.

5 Misc. 3d 285, 783 N.Y.S.2d 758, 2004 N.Y. Misc. LEXIS 1222
CourtNew York Supreme Court
DecidedAugust 9, 2004
StatusPublished
Cited by17 cases

This text of 5 Misc. 3d 285 (Sylmark Holdings Ltd. v. Silicone Zone International Ltd.) 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
Sylmark Holdings Ltd. v. Silicone Zone International Ltd., 5 Misc. 3d 285, 783 N.Y.S.2d 758, 2004 N.Y. Misc. LEXIS 1222 (N.Y. Super. Ct. 2004).

Opinion

OPINION OF THE COURT

Herman Cahn, J.

This is an action to enjoin and recover damages for defendants’ alleged unlawful misappropriation of plaintiffs’ confidential information and proprietary design for their “Hot Holder” silicone gloves, oven gloves which are heat resistant to 500 degrees Fahrenheit, and which have a left-hand and right-hand design.

Plaintiffs move for a preliminary injunction, enjoining defendants (1) from marketing or taking any action with respect to certain molds, sample molds and products (a) for the “Hot Holder” oven mitts that were made in connection with certain agreements between the parties relating to the development of those oven mitts, and (b) for the Silicone Zone “Two Hands” left- and right-handed silicone oven mitts, or any other products, designs or ideas produced, developed or derived from the trade secrets and/or confidential proprietary information that plaintiffs provided to defendants, or which were developed by defendants for plaintiffs pursuant to the agreements between them, including the molds, sample molds obtained from or produced for plaintiffs, sample products, information, specifications, designs, drawings, models, research and development materials, and (2) from violating the order dated May 28, 2004 by the Hong Kong Special Administrative Region Court, which precluded defendants from “disposing of, otherwise dealing with,” or “from advertising, selling or offering for sale any item made or to be made from the Molds.”

Plaintiffs also seek an attachment of assets of defendants Ricky and Ken Yeung and defendant Silicone Zone.

Background

Plaintiff Sylmark Holdings Limited alleges that it developed unique silicone oven mitts, the “Hot Holder” gloves. The gloves are unique because they are generally made in the shape of a [287]*287hand — either right or left hand, thus making it much easier to cook with them. Sylmark licensed to its subsidiary, plaintiff Great Products Limited, the rights to the intellectual property necessary to produce the Hot Holder gloves. (Complaint HIT 7-8.) Great Products had licensed to plaintiff Ideal Products, LLC the intellectual property rights to make the gloves and sell them through retail channels of distribution. (Id. IT 9.)

Defendant Silicone Zone International Limited, a Hong Kong company, and its United States affiliate, defendant Silicone Zone USA LLC, design and manufacture molds for silicone items. The individual defendants are the principals of those companies.

On October 29, 2002, defendant Silicone Zone and plaintiff Sylmark, and its affiliates, executed a confidentiality agreement in which they acknowledged that, in the course of their negotiations, each party may disclose confidential information, including business, product and technical information relating to its business, to the other. (Id. HIT 23-25; complaint, exhibit 3, HH 1-2.) They agreed that the recipient of such information was obligated to keep it confidential and restrict its use during the three-year term of the agreement, and for a period after termination of 24 months. (Id. 1i 26; complaint, exhibit 3, 1111 3-4.) Paragraph 6 of the confidentiality agreement prohibited the recipient of the information from disclosing it to a third party without written permission. (Complaint, exhibit 3, 1i 6.) In paragraph 13 of the confidentiality agreement, Silicone Zone agreed that “the pot holder and/or Silicone mitt disclosed by Sylmark is an invention created solely by Sylmark, and the ownership of such an invention shall remain solely the exclusive property of Sylmark.” (Complaint, exhibit 3, IT 13.)

On November 27, 2002, Sylmark Development, LLC, another affiliate of Sylmark, entered into a development agreement with Silicone Zone, pursuant to which Silicone Zone agreed to manufacture molds for Sylmark for its Hot Holder gloves. (Complaint 1T 30; complaint, exhibit 4.) In this agreement also, Silicone Zone agreed to keep confidential Sylmark’s intellectual property and business practices that were disclosed to it. (Complaint, exhibit 4, II 4.a.) Silicone Zone also acknowledged that any confidential information produced by Silicone Zone based on Sylmark’s confidential information shall be Sylmark’s property. (Id.) Sylmark Development subsequently assigned its rights under the development agreement to Sylmark. (Complaint If 30.)

Plaintiffs allege that, from January 2003 through May 2003, Silicone Zone produced two sets of molds for the Hot Holder [288]*288gloves, but that Sylmark determined each time that the design was wrong. Thereupon, Sylmark provided new specifications for the molds. (Id. 11 31.) In May 2003, Silicone Zone allegedly modified the molds to Sylmark’s specifications, and a set of molds was made that Sylmark was satisfied with. (Id.)

In June 2003, Sylmark and Silicone Zone entered into a mold development agreement for the manufacture of a set of 10 new molds for the Hot Holder gloves. The mold development agreement also contained a comprehensive confidentiality agreement, designed to keep the material that Sylmark disclosed confidential. Silicone Zone agreed to be liable for any unauthorized use, disclosure or access. (Complaint 11 33; complaint, exhibit 1, 111 [c].) In this agreement, Silicone Zone again acknowledged that Sylmark “exclusively owns on a worldwide basis, all right, title and interest in all Samples, Molds, Sample Products and Molds . . . and any modifications . . . thereto,” as well as the confidential materials, the information, plans and designs, provided by Sylmark, or created or provided by Silicone Zone in fulfillment of this agreement, and all intellectual property rights in the sample molds, the molds and the confidential materials. (Complaint 1Í1Í 34-35; complaint, exhibit 1,111 [d].) Further, in the mold development agreement, Silicone Zone acknowledged and agreed that:

“[T]he Molds, Sample Molds and Sample Products are to be used by it only pursuant to the Agreement and only for the account of [Sylmark], and [Silicone Zone] agrees that it will not use any Sample Molds, Sample Products or Molds to produce products for any person other than [Sylmark], or for any purpose other than those specifically permitted under this Agreement, or encumber any Sample Molds or Molds.” (Complaint, exhibit 1, f 1 [e].)

That same provision obligates Silicone Zone to promptly surrender to Sylmark all confidential materials, materials constituting intellectual property rights, sample molds, molds, sample products, and products (referred to as company materials), and not to retain any samples or copies of any of these things, or encumber them, without Sylmark’s prior written consent. (Id.) Paragraph 2 of the mold development agreement states that if Sylmark does not engage Silicone Zone to produce products on a commercial basis, all company materials shall be surrendered to Sylmark, in accordance with paragraph 1 (e).

Plaintiffs claim that Silicone Zone attempted to add a sentence at the end of paragraph 2 obligating Sylmark to order [289]*289at least 100,000 pairs of gloves within one year after the production of the molds or use Silicone Zone as its exclusive manufacturer, but that Sylmark informed Silicone Zone that the provision was unacceptable, and crossed it out before signing the agreement. (Complaint 11 38; complaint, exhibit 1, 1i 2.)

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Cite This Page — Counsel Stack

Bluebook (online)
5 Misc. 3d 285, 783 N.Y.S.2d 758, 2004 N.Y. Misc. LEXIS 1222, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sylmark-holdings-ltd-v-silicone-zone-international-ltd-nysupct-2004.