# Appendix — Novicky v. Syntex Ophthalmics, Inc.

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_1384%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 1986
- **Citation:** 475 U.S. 1083

## Text

met b 2 a - p / ‘a — :
” Supreme Court. U.S.
| FILED
No. ' DEC 27 1985
: . : a oa a ome oe UR
‘ : CLERK
5n the ve

Supreme Court of the Cited States

Octroper Term, 1985

NICK N. NOVICKY

Petitioner.
v8.
SYNTEX OPHTHALMICS, INC. and
ARAPAHOE CHEMIC ALS, INC.
(now SYNTEX CHEMICALS, INC.),
Respondents.

NICK N. NOVICKY,

Petitioner,

vs,

GEORGE F. TSUETAKT and FUSED KONTACTS
OF CHICAGO, INC.,
Respondents.

SUPPLEMENTAL APPENDIX

Keita V. Rockey
135 South L«Salle Street
Chicago, Illinois 60605
(312) 346-0338

Attorney for Petitioner

The Scheffer Press, Inc.—(312) 263-6850

INDEX TO SUPPLEMENTAL APPENDIX

Page

Verified Answer And Counterclaim
of Defendant Nick N. Novicky
To Verified Complaint For
Injunction And Other Relief,
Filed in the State Court Action ....Al

Opinion of the Illinois Appellate
Court In Tsuetaki et al. v.
Novicky, Entered December 7,
6: ee oe ee a a a ee ee ee

Opinion of the United States Court
Of Appeals For the Federal
Circuit In Syntex Ophthalmics
et al. v. Novicky, Dated July
10, 29G3% © swe es © we oe we we oe ew oh ct KOS

Order denying Petition for
Rehearing and Suggestion
for Rehearing in Banc in
Syntex Ophthalmics et al.
v. Novicky, Dated October
kc Se ee a ee * ee ee oe CO

A-1
IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS
COUNTY DEPARTMENT CHANCERY DIVISION

GEORGE F. TSUETAKI and
FUSED KONTACTS OF CHICAGO, INC.
an Illinois Corporation,
Plaintiffs,

Vs.
NICK N. NOVICKY, NO. 80
Defendant,

and

NICK N. NOVICKY,
Counter-Plaintiff,

VS.

GEORGE F. TSUETAKI and
FUSED KONTACTS OF CHICAGO, INC.,
an Illinois Corporation,
Counter-Defendant. )

)
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) CH 4724
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VERIFIED ANSWER AND
COUNTERCLAIM OF DEFENDANT
NICK N. NOVICKY TO VERIFIED COMPLAINT
FOR INJUNCTION AND OTHER RELIEF

Defendant and Counter-Plaintiff, NICK N.
NOVICKY, by his attorneys, KECK, MAHIN &
CATE, answers the Verified Complaint For
Injunction and Other Relief of the Plaintiffs

and Counter-Defendants, GEORGE F. TSUETAKI

A-2
and FUSED KONTACTS OF CHICAGO, INC. and
counter claims against said Plaintiffs and

Counter-Defendants as follows:

COUNT I

1. Defendant and Counter-Plaintiff NICK
N. NOVICKY (hereinafter "NOVICKY"), does not
possess sufficient knowledge to form a belief
as tc the truth or falsity of the allegations
contained in paragraph 1 of Count I of the
Verified Complaint for Injunction and Other
Relief (herein-after the "Complaint") of the
Plaintiffs and Counter-Defendants, GEORGE F.
TSUETAKI (hereinafter "TSUETAKI") and FUSED
CONTACTS OF CHICAGO, INC. (hereinafter "FUSED")
and therefore demands strict proof thereof.

Ye NOVICKY admits the allegations con-
tained in paragarph 2 of Count I of the Com-
plaint.

36 NOVICKY admits the allegations con-
tained in paragraph 3 of Count I of the Com-

plaint.

A-3

4. NOVICKY denies the allecations con-
tained in paragraph 4 of Count I of the Com-
plaint. Furthering answer said allegations,
NOVICKY states that in August, 1978 he did
contact TSUETAKI and FUSED concerning the
business of manufacturing and selling gas
permeable contact lens and materials used for
making gas permeable contact lens and other
lens devices and that NOVICKY did sign the
contract dated August 31, 1978, a copy of
which is attached to the Complaint as Exhibit
| ae

- NOVICKY denies the allegations con-
tained in paragraph 5 of Count I of the Com-
plaint. Further answering said allegations,
NOVICKY states the terms of the contract
attached to the Complaint as Exhibit "A" did

provide, inter alia, that NOVICKY shall be

employed by TSEUTAKI (or FUSED, at TSUETAKI's
convenience) for research and development
work and for the purpose of developing ma-

terials and techniques useful in the produc-

A-4
tion of contact lens, contact lens blanks,
materials used to make such lenses and blanks,
chemical formulations and compositions used
as ingredients or components of such lenses
or lens blanks, and other materials.

6. NOVICKY admits the allegations con-
tained in paragarph 6 of Count I of the Com-
plaint.

7. NOVICKY denies the allegations con-
tained in Paragraph 7 of Count I of the Com-
plaint. Further answering said allegations
NOVICKY states that FUSED did rent a facility
in Northbrook, Illinois, and that TSUETAKI
and FUSED established a division known as G &
N Research Laboratories.

8. NOVICKY denies the allegations con-
tained in Paragraph 8 of Count I of the Com-
plaint. Further answering said allegations,
NOVICKY states that after August 3l, 1978,
NOVICKY did conduct research and development
in the field of plastics for developing formu-

lations and techniques for producing plastic

A=)

contact lens and lens blanks and that during
the course of his employment he did develop

certain materials which appeared to be satis-

for governmental approval.
9. NOVICKY admits the allegations con-

tained in paragraph 9 of Count I of the Com-

10. NOVICKY does not possess sufficient
information to form a belief as to the truth
Or falsity of the allegations contained in
paragraph 10 of Count I of the Complaint and
therefore demands proof thereof.

his NOVICKY denies the allegations con-
tained in Paragraph 11 of Count I of the Com-
plaint. Further answering said allegations,
NOVICKY states that he cooperated with TSUE-
TAKI's attorney, James Fitzgibbon, in the
filing of a patent application (S.N. 081,682)
for an invention conceived during NOVICKY's

employment by TSUETAKI and FUSED.

A va
Fs Sad ©

12. NOVICKY cenies the allegations
tained in paragraph 12 of Count I of the
plaint.

13. NOVICKY denies the allegations
tained in paragraph 13 of Count I of the
plaint.

14, NOVICKY denies the allegations
tained in paragraph 14 of Count I of the
plaint.

L5- NOVICKY denies the allegations
tained in paragraph 15 of Count I of the
plaint.

16. NOVICKY denies the allegations
tained in Paragraph 16 of Count I of the
plaint.

5 i a NOVICKY denies the allegations

tained in paragraph 17 of Count I of the

con-

Com-

con-

a)

con-

Com-

con=-

Com-

con-

Com-

con-

Com-

plaint. Further answering said allegations,

NOVICKY states that on June 18, 1980 he did

Submit a letter of resignation attached to

the Complaint as Exhibit "G".

18. NOVICKY denies the allegations con-

tained in paragraph 18 of Count I of the Com-
plaint.

19. NOVICKY denies the allegations con-
tained in paragraph 19 of Count I of the Conm-
plaint.

20. NOVICKY does not possess sufficient
knowledge to form a belief as to the truth or
fasity of the allegations contained in para-
graph 20 of Count I of the Complaint and there-
fore demands strict proof thereof. Further
answering said allegations, NOVICKY stated
that:

(1) he did speak to TSUETAKI on
June 27, 1980, and did inform him Mr. Stage-
meyer was in the office at the G&N premises
in Northbrook, but that NOVICKY never permit-
ted Mr. Stagemeyer access to the laboratory
located on the G&N premises in Northbrook;

(ii) on June 30, 1980, he informed

TSUETAKI that he was too ill to report to

O
-.

A-6
(iil) he arrived at the G & N prem-
ises at approximately 12:30 that day to pick
up his mail; and
(iv) On said date, TSUETAKI and
FUSED demanded that NOVICKY deliver over all
of the books and records allegedly belongings
to TSUETAKI and FUSED and that NOVICKY deliver
over all keys to the premises and that he
vacate the premises.

21. NOVICKY denies the allegations con-
tained in paragraph 21 of Count I of the Com-
plaint.

22. NOVICKY denies iia ailecations con-
tained in paragraph 22 of Count I of the Com-
plaint.

23. NOVICKY denies the allegations con-
tained in paragraph 23 of Count I of the Com-
plaint.

WHEREFORE, Defendant and Counter-Plaintiff,
NICK N. NOVICKY, requests that Count I of

Plaintiffs' and Counter-Defendants', GEORGE

A-9
F. TSUETAKI and FUSED KONTACTS OF CHICAGO,
INC., Verified Complaint for Injunction and
Other Relief be dismissed and that Defendant
and Counter-Plaintiff, NICK N. NOVICKY, be
granted his costs and such other relief as

this Court deems equitable.

COUNT II

i-22. NOVICKY repeats and realleges
paragraphs 1 through 22 of Count II as though
restated herein for his answer to paragraph
1-22 of Count II of the Complaint.

23 NOVICKY denies the allegations
contained in paragrapy 23 of Count II of the
Complaint.

WHEREFORE, Defendant and Counter-Plaintiff,
NICK N. NOVICKY, requests that Count II of
Plaintiffs' and Counter-Defendants', GEORGE

FF. TSUETAKI and FUSED KONTACTS OF CHICAGO,

rr

INC., Verified Complaint for Injunction and

, 7

Other Relief be dismissed and that Defendant

and Counter-Plaintiff, NICK N. NOVICKY, be
granted his costs and such other relief as

this Court deems equitable.

COUNT III

1-22. NOVICKY repeats and realleges
paragraphs 1 through 22 of Count I as though
restated herein for the answers to paragraphs
1-22 of Count III of the Complaint.

23. NOVICKY denies the allegations
contained in paragraph 23 of Count III of the
Complaint.

24. NOVICKY denies the allegations
contained in paragraph 24 of Count III of the
Complaint. Further answering said allega-
tions NOVICKY states that, pursuant to TSUE-
TAKI's instructions or with TSUETAKI's knowl-
edge, he has filed certain patent applica-
tions, S.N. 066,054 and S.N. 074,427 in the

United States Patent Office.

WHEREFORE, Defendant and Counter-Plaintiff,
NICK N. NOVICKY, requests that Count III of

Plaintiffs' and Counter-Defendants', GEORGE

INC., Verified Complaint for Injunction and
Other Relief be dismissed and that Defendant

and Counter-Plaintiff, NICK N. NOVICKY, be

granted his costs and such other relief as

FIRST AFFIRMATIVE DEFE

WY
e3)

NOVICKY states as his first affirmative

defense that TSUETAKI and FUSED by false

TS

rromises and other deceptive practices fraudu-

lently induced NOVICKY to enter into the

>
e)
ry
(D
@
3
D
oe
ct

attached to the Complaint as Exhi-
bit A. Because of such fraudulent conduct by
TSUETAKI and FUSED, NOVICKY is entitled to

rescission and said Agreement is void and

unenforceable.

BS.

WHEREFORE, Defendant and Counter-Plain-

tiff, NICK N. NOVICKY, requests that Plaintiffs'
and Counter~-Defendants', GEORGE F. TSUETAKI
and FUSED KONTACTS OF CHICAGO, INC., Verified
Complaint for Injunction and Other Relief be
dismissed and that Defendant and Counter-Plain-
tiff, NICK N. NOVICKY, be granted his costs
and such other relief at this Court deems

equitable.

SECOND AFFIRMATIVE DEFENSE

NOVICKY states as his second affirmative
defense that COUNT I of the Complaint fails
to allege specific facts concerning the
alleged confidential information which was
revealed to or developed by NOVICKY during
the course of his emplcyment by TSUETAKI
and/or FUSED, but rather only alleges vague
legal conclusions.

WHEREFORE, Defendant and Counter-Plain-

tiff, NICK N. NOVICKY, requests that the

injunctive relief requested in paragraphs A,

B and C of Count I of the Complaint be denied.

THIRD AFFIRMATIVE DEFENSE

NOVICKY states as his third affirmative
defense that it was never the intent of the
parties that NOVICKY's patent claims which
are the subject of Patent Applications S.N.
066,054 and S.N. 74,427 be sold to TSUETAKI
and/or FUSED pursuant to the August 3l, 1978
Agreement and that TSUETAKI acknowledged such
fact and waived and released any claim to
NOVICKY's patent rights accruing from patent
applications S.N. 066,054 and S.N. 74,427 in
his letter to NOVICKY dated January 31, 1980
and attached to the Complaint as Exhibit "C".

WHEREFORE, Defendant and Counter-Plain-
tiff, NICK N. NOVICKY, requests that the
relief requested by Plaintiffs and Counter
Defendants, GEORGE F. TSUETAKI and FUSED
KONTACTS OF CHICAGO, INC., in Count III of

the Complaint be denied.

t-
i

COUNTER CLAIM

COUNT I

FRAUD IN THE INDUCEMENT

1. In approximately the beginning of
August, 1978, NOVICKY contacted TSUETAKI and
FUSED concerning the sale of a certain inven-
tion gas permeable contact lens material
(hereinafter referred to as Fusefocon GN-l
material) developed by NOVICKY prior to that
date.

26 After this initial contact, there
were several later discussions between TSUE-
TAKI and NOVICKY concerning said invention
and the employment of NOVICKY by TSUETAKI or
one of his companies in order to complete the
development of said Fusefocon GN-1 material.

3. During the course of these discus-
Sions, TSUETAKI offered to purchase said
invention from NOVICKY and to employ NOVICKY
to develop said material on the following

terms:

A-15

(i) a three year employment con-
tract with an initial base salary of $22,500
per annum;

(1i) a $10,000 payment which was to
be paid upon the date on which a patent appli-
cation for the Fusefocon GN-1l material was
filed, and an additional $10,000 payment
which was to be paid upon the date on which a
patent was granted persuant to said applica-
tion;

(iii) a percentage of the profits
from the sales of the Fusefocon GN-1l material
and from the sales of any other material
developed by NOVICKY; and

(iv) employee perquisites such as a
company paid travel to European customers and
cash bonuses.

4. On August 30, 1978, TSUETAKI and one
of his attorneys, James Fitzgibbon, travelled
to NOVICKY's apartment in Wheaton, Illinois

and presented NOVICKY with the first written

proposal which purported to embody the terms
of NOVICKY'S negotiations with TSUETAKI.

- Said written proposal did not con-
tain any provisions which related to the
share of the profits on the sales of the
Fusefocon GN-l material or other material
developed by NOVICKY which TSUETAKI had
promised NOVICKY he would receive if he sold
Said invention to TSUETAKI, or which related
to the employee perquisites which TSUETAKI
had promised to NOVICKY.

6. At that date TSUETAKI stated to
NOVICKY that it was not necessary to include
in the written agreement specific provisions
concerning NOVICKY'S share of the profits and
his employee perquisites, since such items
would be paid to NOVICKY persuant to para-
graph 8 of the agreement or granted to him
pursuant to TSUETAKI'S oral promises. Para-
graph 8 provided for a "discretionary bonus"

to be paid to NOVICKY by TSUETAKI at times

and in amounts to be determined in TSUETAKI'S
sole discretion.

¥« NOVICKY, a relatively recent immi-
grant to the United States (from Czechoslo-
vakia in 1970), did not have a sophisticated
knowledge of either the English language or
contract law. As a result of such lack of
sophistication NOVICKY did not understand the
terms of the Agreement attached to the Com-
plaint as Exhibit A or the legal ramifica-
tions thereof. NOVICKY, at all times there-
in, believed that TSUETAKI was legally bound
to fulfill his oral promises to pay NOVICKY a
percentage of the profits on the saies of the
material developed from NOVICKY's inventions,
including, but not limited to, Fusefocon GN-l
material and to provide him with employee
perquisites.

8. After NOVICKY requested that one

minor change be made in the agreement, TSUE-

TAKI and his attorney, James Fitzgibbon,

urned to NOVICKY'S apartment on August 3l,

1978, with a second version of the written

TSUETAKI and NOVICK Said agreemen was
identical to the one proposed on the previous
day, except that the miror change requested
by NOVICKY was made and that TSUETAKI, with-
out consulting NOVICKY, had extended the term
of the agreement from three to four years.

9. NOVICKY discovered the change in the
length of the term of the agreement but after
a discussion with TSUETAKI during which TSUF-
TAKI further assured NOVICKY that TSUETAKI
would keep his oral promises, NOVICKY exe-
cuted the agreement which is attached to the

Complaint as Exhibit "A" (hereinafter "Agree-

\

ment").

10. At no time during the course of
NOVICKY'S negotiations with TSUETAKI- and
FUSED did NOVICKY consult or have access to

~

A-1Y

ll. TSUETAKI and FUSED knew or should
have known that NOVICKY did not have a sophis-
ticated knowledge of either the English lan-
guage or American law. In spite of this
knowledge, TSUETAKI and FUSED did not suggest
to NOVICKY that he consult an attorney, but
rather stated to him that it was rot neces-
Sary to consult an attorney because NOVICKY
could "trust" TSUETAKI to fulfill his oral
promises and obligations thereunder.

12. TSUETAKI also took active steps to
prevent NOVICKY from having a chance to con-
Sult an attorney by stating several times
that if NOVICKY did not immediately accept
TSUETAKI'S offer as embodied in the Agree-
ment, then such offer would terminate.

13 « NOVICKY, in reliance on TSUETAKI's
Oral promises that TSUETAKI would pay to
NOVICKY a percentage of the profits resulting
from the sale of the Fusefocon GN-1l material

and NOVICKY'S other inventions and research,

A-20

and that NOVICKY would be entitled to certain
employee perquisities, executed in the Employ-
ment Agreement on August 31, 1978.

14. TSUETAKI at all times during said
negotiations knew that the written Agreement
did not contain any specific terms which re-
gGuired him to pay NOVICKY any portion of the
profits from the sales of Fusefocon GN-1l mater-
lal or any other material developed by NOVICKY
Or which required FUSED anc/or TSUETAKI to
provide NOVICKY with company paid travel and
Other employee perquisites. TSUETAKI fraudu-
lently made such oral promises, with knowledge
that NOVICKY was unsophisticated in his under-
taking of the English language and American
law, for the purpose of obtaining NOVICKY's
inventions and research capabilities and with
no intentions of honoring such promises.

15. During the first several months of
the term of the Employment Agreement, TSUE-
TAKI continued to make further oral promises

to NOVICKY that he would receive a share of

the profits resulting from the sales of the
products produced from NOVICKY'S inventions
and research, including but not limited to
the Fusefocon GN-1 material.

16. During said time period, TSUETAKI
established a division of FUSED entitled G&N
Research Laboratories, Inc. The G&N stood
for "George" and "Nick" and the division was
so entitled to create the impression in
NOVICKY'S mind that he was a partner with
TSUETAKI and as such would be entitled to a
portion of the profits of their common enter-
prise.

17. Induced by TSUETAKI'S oral promises
that he would receive a portion of the pro-
fits resulting from the sales of materials
produced and developed by him, NOVICKY -dili-
gently fulfilled the obligations of the Employ-
ment from August 31, 1978 until June 30,
1980. During said time period, NOVICKY de-
veloped the production process for Fusefocon

GN-l material.

A-22

18. In addition, during the period from
August 31, 1978 until June 30, 1980 NOVICKY,
based on research conducted by NOVICKY prior
to his employement by TSUETAKI and FUSED
developed materials which are the subject of
two other patent applications, 072,449 and
103,408. NOVICKY also developed the material
which was the subject of another patent appli-
cation, 081,682. Such material was a refine-
ment of a competitor's product. All such
applications were assigned by NOVICKY to
TSUETAKI, pursuant to the terms of the Agree-
ment.

19. Production and sales of the mater-
ials produced as a result of NOVICKY'S inven-
tions and research began in approximately
April, 1979.

20. TSUETAKI, in spite of numerous
requests by NOVICKY, did not fulfill his oral
promises and obligations to pay to NOVICKY
any portion of the profits from the sales of

such materials.

A-23

21. On May 16, 1980, TSUETAKI, pursuant
to a letter attached to the Complaint as
Exhibit F, finally offered to pay to NOVICKY
the sum of $1.00 for each standard rod of
Fusefocon GN-l material produced. TSUETAKI,
however, failed to comply with the terms of
said offer and did not pay to NOVICKY the sum
of $1.00 for each standard rod of Fusefocon
GN-1l material.

22. TSUETAKI also failed to fulfill his
promises to provide NOVICKY with company-paid
travel to European customers; but rather
actively prevented Novicky from having contact
with said customers by refusing to disclose
to NOVICKY the identity of said customers and
by forbidding NOVICKY to attend trade meetings
involving the contact lens industry and from
entering science contests in the contact lens
industry.

23% During the course of NOVICKY'S

employment with FUSED and TSUETAKI, TSUETAKI

A-24

continued to attempt to take advantage of
NOVICKY'S lack of legal sophistication. In
April of 1980, TSUETAKI presented NOVICKY with
a "Supplemental Agreement", a true and cor-
rect copy of which is attached hereto as
Exhibit .*i*. Among the onerous and uncon-
scionable privisions contained therein were
two paragraphs, 3 and 46, which purported to
permit TSUETAKI to require NOVICKY to work
for TSUETAKI for the rest of his life, yet
permitted TSUETAKI to terminate the Agreement
and the Supplemental Agreement without notice.
24. At all times herein:

(1) NOVICKY acted in reliance on
TSUETAKI'S promises that NOVICKY would be
paid a portion of profits resulting from the
sales of materials produced from his inven-
tions and would be given employee perquisites;

(ii) TSUETAKI knew he should have

Known that NOVICKY was acting in reliance on

such promises;

A-25

(111) TSUETAKI had no intention of
paying to NOVICKY any portion of the profits
resulting from sales of Fusefocon GN-1l mater-
ial or any other material produced or devel-
oped by NOVICKY;

(iv) NOVICKY would not have agreed
to enter into the Agreement except for TSUE-
TAKI'S promises that NOVICKY would be paid a
portion of the profits rsulting from sales of
materials produced from his inventions and
that NOVICKY would be entitled to employee
perguisites; and

(v) NOVICKY was materially damaged
by the failure to TSUETAKI to fulfill such
promises.

WHEEFORE, the Defendant and Counter-
Plaintiff, NICK N. NOVICKY, requests the
following relief:

a. For an order declaring the

Agreement to be null and void for failure of

consideration and fraud.

b. For an order requiring the

Plaintiffs and Counter-Defendants to reassign
to the Defendant and Counter-Plaintiff the
following patent or patent applications:
(i) 006725;
(ii) 072,449; and
(iii) 103,408.

Ce For an order requiring Plain-
tiffs and Counter-Defendants to submit to
Defendant and Counter-Plaintiff an accounting
of all sales of any material or item which is
based on or composed of the materials which
are the subject of the patent applications
listed in (b) above and to pay the Defendant

and Counter-Plaintiff all profits resulting

d. For an order declaring that
Plaintiffs and C ter-Defendants have
rialntl ~— ana Oun er eren an a) na — no
le or interest in patent applica-

tions 66054 and 74427;

e. For punitive damages in the
amount of $250,000.00; and
c. For such other relief as this

Court deems just and equitable.

COUNT II

BREACH OF CONTRACT

1-22. NOVICKY realleges and restates
paragraphs 1 through 22 enclusive of Count I
of the Counterclaim as paragraphs 1 through
22 enclusive of Court III of the Counterclaim.

23. At no time between August 31, 1978
and the date hereof has TSUETAKI ever paid
NOVICKY any portion of the profits resulting
from the sales of Fusefocon GN-1l material or
any other material developed by NOVICKY
during the period between August 3l, 1978 and
June 30, 1980.

24. Pursuant to TSUETAKI'S promises to
NOVICKY, NOVICKY is entitled to a reasonable

portion of such profits.

A-28

25. A reasonable portion of such pro-
fits is equal to five percent (5%) of the
sales price of all item produced from Fuse-
focon GN-1l material or any material which is
the subject of patent applications 072,449
and 103,408.

WHEREFORE, the Defendant and Counter-
Plaintiff, NICK N. NOVICKY, requests’ the
following ,celief:

(a) For an order requiring the Plain-
tiffs and Counter-Defendants to submit to
Defendant and Counter-Plaintiff an accounting
of all sales of any mateiral or item which is
based on or composed of any of the Fusefocon
GN-l material in the materials which are the
Subject of patent applications 072,449 and
103,408.

(b) For an order requiring the Plain-
tiffs and Counter-Defendants to pay to the
Defendant and Counter-Plaintiff the sum equal

to five percent (5%) of the gross sales price

of all such sales as shown by the accounting
requested in (a) above.

(c) For an order requiring the Plain-
tiffs and Counter-Defendants to pay to Defen-
dant and Counter-Plaintiff a sum equal to
five percent (5%) of the gross sales price of
all future sales of any such materials.

(d) For such other relief as this Court

deems fair and equitable.

COUNT III

BREACH OF CONTRACT

1-22. NOVICKY realleges and restates
paragraph 1 through 22 inclusive of Count I
of the. Counterclaim as paragraphs 1 through
22 inclusive of Count III of the Counter-
claim.

23 « TSUETAKI and FUSED failed to ful-
fill their obligation to pay NOVICKY $1.00
per each rod of Fusefocon GN-l material which
met the specifications stated in the document

attached to the Complaint as Exhibit "F".

A-30

WHEREFORE, the defendant and counter-
plaintiff prays for the following relief:

(a) For an order requiring TSUETAKI and
FUSED to submit to NOVICKY an accounting of
all rods produced between May 16, 1980 and
June 30, 1980 by FUSED, TSUETAKI or any cor-
poration or business entity controlled by
TSUETAKI or in which TSUETAKI has an interest.

(b) For an order requiring TSUETAKI and
FUSED to pay to NOVICKY the sum of $1.00 for
each rod so produced by FUSED, TSUETAKI or
any corporation or business entity controlled
by TSUETAKI or in which TSUETAKI has an
interest.

(c) For such other relief as this Court

deems fair and equitable.

KECK, MAHIN & CATE, Attorneys
for Defendant and Counter-Plaintiff
NICK N. NOVICKY

OF COUNSEL:

James G. Hiering

John T. McEnroe

8300 Sears Tower

233 South Wacker
Chicago, Illinois 60606
(312) 876-3400

A-31

VERIFICATION

I, Nick N. Novicky being first duly
sworn, on oath depose and state that I have
read the foregoing answer and counterclaim;
that the allegations therein contained are
true in substance and in fact; that with
regard to the allegations made upon informa-
tion, I am informed and do believe the truth
such allegations; and that the statements
contained therein that I am without suffi-
cient information to answer the allegations
contained in Paragraphs 1, 10, 20 of Counts
I, II and III of the Plaintiffs' and Counter-

defendants' complaint are true.

Nick N. Novicky

SUBSCRIBED AND SWORN TO
before me this 3lst day of
July, 1980

NOTARY PUBLIC

>
Ay 2£

THIRD DIVISJON
DECEMBER 7, 1983

81-1727/
81-2857

GEORGE F. TSUETAKI
and FUSED KONTACTS
OF CHICAGO, INC.,
an Illinois corp-
Oration,

APPEAL FROM THE
CIRCUIT COURT OF
COOK COUNTY.
Plaintiffs-
Appellees, HONORABLE REGINALD
J. HOLZER, JUDGE
vs. PRESIDING.
NICK N. NOVICKY,

Defendant-
Appellant.

eee ee ee

JUSTICE McGILLICUDDY delivered the opinion
of the court:

Following a bench trial, defendant,
Nick Novicky (Novicky), was found to have
breached his employment contract with plain-
tiffs, George F. Tsuetaki and Fused Kontacts

of Chicago, Inc. (Tsuetaki). The trial court

also found that modifications of the contract

i.

oe

>
i

Ww

WwW

were void for duress, fraud and lack of con-
sideration. An order was entered granting
the injunctive relief sought by Tsuetaki, and
ordering Novicky to return sums of money re-
ceived pursuant to the contract modifica-
tions.

On appeal Novicky asserts (1) the injunc-
tion is overly broad, permanently precluding
him from disseminating any and all informa-
tion relating to the manufactur.ng of gas
permeable contact lenses, thus effectively
precluding him from pursuing his career; (2)
tne modifications of his employment contract
were valid and not obtained by duress or fraud;
(3) the order of the circuit court is void
for failure to join an indispensable party to
the litigation; and (4) the circuit court
erred in dismissing Novicky's petition for
rehearing based on section 72 of the Civil
Practice Act (Ill. Rev. Stat. 1979, ch. 110,

par. 72), now codified as section 2-1401 of

the Code of Civil Procedure (Ill. Rev. Stat.
1981, ch. 110, par. 2-1401).

At trial, Tsuetaki testified that he
was a doctor of optometry doing business as
Fused Kontacts, Inc. The corporation makes
contact lenses for sale to doctors, labs and
patients. In August 1978, Novicky, a chemist,
stated to Tsuetaki that he had developed a
new composition for gas permeable contact
lenses that he wanted to sell to him. suetaki
Signed a security agreement, providing that
he would not analyze materials received from
Novicky at that time, but that, if a business
arrangement were reached, all technology would
become the property of Tsuetaki.

Subsequently, Tsuetaki and Novicky met
with Tsuetaki's patent attorney regarding tke
new composition for gas permeable contact
lenses. Although Novicky had previously been

employed as a chemist by Syntex Opthalmics,

Inc., and/or Arapahoe Chemicals, Inc., (col-

A-35

lectively Syntex), a manufacturer of gas per-
meable contact lenses, Novicky maintained
that he had developed the material offered to
Tsuetaki after leaving Syntex and while working
on his master degree at the University of
Denver. Novicky represented that his invention
did not infringe any patent owned by Syntex.
Tsuetaki and Novicky entered into an
employment agreement for the period from September
1, 1978 to August 31, 1982, providing that
Novicky would be employed to develop material
and techniques useful for the production of
contact lenses and related items. He was to
be paid an annual salary of $22,500 adjusted
annually to reflect increases in the cost of
living and a discretionary bonus. In addition,
in exchange for a present assignment of all
rights to any inventions previously made by
Novicky, he was to receive (1) $10,000 for

each patent application covering developments

made by Novicky for use in making contact

A-36

lenses and related items, approved by Tsuetaki
and filed in the United States Patent Office;
and (2) an additional $10,000 when and if a
United States patent was issued on the appli-
cation.

In return, Novicky assigned all inventions,
developments and improvements to be made in
the future to Tsuetaki during his life of the
agreement plus six months thereafter. Novicky
also agreed to keep the subject of his work
"confidential" as long as such information
had value to Tsuetaki or was still confiden-
tial.

The employment contract was signed on
August 31, 1978, and Novicky began work in a
laboratory provided by Tsuetaki. Novicky
made rods of material from which his employer
cut discs to make contact lenses. Tsuetaki
tested the lenses by wearing them himself.

He would then suggest to Novicky changes that

might be made to improve the lenses. Eventually

A-37

they developed a material which they called
"GN-l1," and patent application serial number
6752 was filed in Novicky's name covering the
GN-l material. Pursuant to the agreement,
Novicky was paid $10,000 at filing and $10,000
when the patent was officially allowed.

After the 6752 application was filed,
Novicky filed two more applications for other
inventions of which Tsuetaki was advised and
which Novicky agrees belong to Tsuetaki.
Novicky also filed three additional patent
applications for other inventions, two of
which he refers to as “private patents".
Novicky testified that Tsuetaki was uninterested
in these two patents and freely signed a state-
ment in January 1980, waiving all rights to
them. Tsuetaki, however, testified that he
Signed the waiver under duress and fraud and
without consideration. The alleged duress

was a backlog of orders which could only be

filled by the production of the rods by Novicky.

A-38 \

The alleged fraud was Novicky's assurance
that the two private patents were inferior
to, andthus not competitive with, those assigned
to Tsuetaki. However, following expert testimony,
the trial court found that the private patents
were competitive with GN-l. The court also
found that Tsuetaki had signed the waiver
under duress Since the alternative was a complete
shutdown of operations because of the stoppage
of the production of the rods by Novicky.

The employment contract was further
modified in May 1980, when Tsuetaki agreed to
pay Novicky a royalty of $1.00 per rod for
all GN-1l material produced. Tsuetaki testified
that this agreement, too, was the product of
duress. Novicky had started a production
slowdown. Tsuetaki allegedly had a backlog
of orders for 42,000 GN-1l blanks or 1900 rods
and no personnel other than Novicky to produce

them. t approximately the same time Novicky

also requested and received from Tsuetaki an

A-39

additional $3,000 for preparation of a United
States Food and Drug Administration file seeking
approval of the GN-1l material. Again, Tsuetaki
testified that he acted under duress. In
June 1980, Novicky tendered his resignation
to Tsuetaki.

The trial court found that Novicky had
violated his employment agreement and on January
13, 1981, entered judgment for Tsuetaki, ordering
Novicky to repay the $3,000. The judgment
order also included an injunction which pro-
vided:

*(4) NICK N. NOVICKY is hereby
enjoined from disclosing to any
person or entity the contents in
whole or in part of any laboratory
books and records dealing with
the experiments, research, progress
and development of the technology
involved in the manufacture of
contact lenses, including, but
not limited to, those which could,
would or did lead to the filing
of letters patent. NICK N. NOVICKY
is also enjoined from otherwise
disseminating matters confidential
to GEORGE TSUETAKI and/or FUSED
KONTACTS OF CHICAGO".

A-40

On October 24, 1980, Syntex had requested
permission to monitor the circuit court proceed-
ings. Tsuetaki and Novicky objected. The
trial court denied the request. On November
19, 1980, Syntex filed suit against Tsuetaki
and Novicky in the United States District
Court for the Northern District of Illinois
alleging that Tsuetaki had wrongfully obtained
Syntex's trade secrets from Novicky.

On February 18, 1981, Novicky filed a
post-trial motion seeking modification of the
judgment of January 13, 1981. Novicky contended
that the injunction in paragraph (4) was overly
broad, and that it was anomalous since Novicky
was not precluded from manufacturing contact
lenses using confidential information and
processes belonging to Tsuetaki, as long as
that information or process was not disclosed
to any other person or entity.

Tsuetaki filed a petition for Rule to

Show Cause on February 11, 1981, contending

A-41

that Novicky had improperly conferred with an
attorney for Syntex, regarding the case in
Federal court in which Novicky was appearing
pro se. In response to the petition for Rule
to Show Cause and in support of its own cross-
petition for a stay of the injunction entered
by the circuit court on January 13, 1981,
Syntex submitted a memorandum stating that
Novicky had agreed not to disclose or use
contact lens-related trade secrets learned
during the five years he had worked for Syntex.
While Novicky worked for Syntex he had allegedly
developed methods of making contact lenses,
generating a Patent Disclosure executed on
December 15, 1977, by three Syntex employees.
Although this patent belonged to Syntex, it
was allegedly substantially similar to the
patent awarded to Tsuetaki in the January 13,
1981 judgment. Further, the judgment required
Novicky to transfer to Tsuetaki documents

allegedly belonging to Syntex and drafted by

A-42

Novicky during his employment there. Syntex
requested the trial court to enter a protective
order staying certain paragraphs of its order
pending the decision of the Federal court
regarding the rights of the parties.

On February 24, 1981, Syntex filed a
Special and Limited Appearance to contest
personal jurisdiction of the state court. On
July 10, 1981, the trial court held that Syntex,
by filing its cross-petition and its response
to the petition for Rule to Show Cause, had
made a general appearance thereby submitting
itself to the jurisdiction of the trial court.
The court, further, denied Syntex's petition
for a protective order. Novicky's post-trial
motion was also denied.

Novicky appeals the January 13, 1981
and July 10, 1981 decision of the circuit
court. In addition, he filed a petition pur-
Suant to section 72 of the Civil Practice

Act (Ill. Rev. Stat. 1979, ch. 110, par. 72),

A-43

now codified as section 2-1401 of the Code of
Civil Procedure (Ill. Rev. Stat. 1981, ch.
110, par. 2-1401), on the basis of testimony
given by Tsuetaki and by Fused's comptroller,
in the Federal case against both Tsuetaki and
Novicky. Novicky asserted in his petition
that (1) evidence given by Tsuetaki and the
comptroller in the Federal case directly con-
tradicted testimony relied upon by the circuit
court in its resolution of the case in the
Circuit court; and (2) evidence in the Federal
case established that Syntex was an indispensable
party who should have been joined to the circuit
court action. Tsuetaki filed a motion to
Strike the section 72 petition. The court
granted the motion to strike. Novicky also
appeals this order.
I.

We first address the issue of the dismissal

of the section 72 petition which alleged that

the evidence given by Tsuetaki in the circuit

A- 44

court was contradicted by subsequent depositions
given by Tsuetaki in the Syntex case in the
Federal court. Tsuetaki and his comptroller,
Bill Vranas (Vranas), testified in the trial
of the instant case in support of Tsuetaki's
claim of coercion and duress chat Tsuetaki
had not been able to fill his orders for lenses
during the summer of 1980 because otf Novicky's
refusal to produce sufficient material and
his lack of other personnel to manufacture
the material. However, according to their
depositions in the Federal case, not only had
Tsuetaki been abie to fill his orders on July
3, 1980 and July 15, 1980, from material made
by Novicky before his resignation, but Vranas
testified further that sales were in fact
"bad" during the summer of 1980 and that when
Tsuetaki resumed production without Novicky
he still had an inventory over 1,000 "buttons"
produced by Novicky. This is inconsistent
with Vranas' and Tsuetaki's testimony in the

Circuit court.

A-45

Concerning Novicky's so-called "private
patents", Tsuetaki testified in circuit court
in support of his allegation that Novicky had
coerced him into waiving his interest in those
patents:

"I asked Mr. Novicky, what do

you want to do. What do I have

to do in order that we can have

production and satisfy our needs?

*x*x* T had no choice but to sign

this."
However, in his deposition in the Federal
case filed by Syntex, Tsuetaki stated that
about six months after the commencement of
the employment agreement Novicky had offered
him the private paterts for $10,000. Tsuetaki
stated that he simply did not wish to accept
hisoffer. Again this contradicts the testimony
in the instant case.

Further, regarding the alleged duress
resulting from Tsuetaki's complete dependence

On Novicky for the production of lenses due

to a lack of other qualified employees, the

A-46

Federal deposition revealed that Tsuetaki had
actually opened a second laboratory, Paragon
Research Corporation, before Novicky resigned.
In the instant case, on the other hand, Tsuetaki
had testified that he had "no desire" to open
another laboratory facility and that Novicky
would not have permitted him to hire an additional
chemist.

In addition, inthe circuit court, counsel
for Tsuetaki referred to Novicky as having
"extorted" the $3,000 received for preparation
of the United States Food and Drug Administra-
tion file, claiming that the typing bills in
conjunction with the preparation of the file
had amounted to only $54. The actual bills,
disgorged in the Federal court proceeding,
totaled approximately $1,400.

In the section 72 petition Novicky also
alleged that Syntex was an indispensable party
to the circuit court case, »Dased on Syntex's

assertions in the Federal case that it had a

A-47

proprietary interest in the subject matter of
this case. Novicky's section 72 petition was
supported by his affidavit and memorandum.

Tsuetaki filed a motion to dismiss the
section 72 petition alleging that it was insuf-
ficient at law to state a claim for relief.
The circuit court entered an order striking
the section 72 petition on the basis that the
newly discovered evidence could have been
presented at the trial if Novicky had exercised
due diligence.

First, we note that for purposes of a
section 72 petition, as in other pleadings,
failure to answer the allegations of the petition

constitutes an admission. (Campbell v. Kaczmarek

(1976), 39 Ill. App. 3d 465, 350 N.E.2d 97.)

Therefore, we must accept Novicky's allegations
as true and the only issue before this court
ls whether the petition and its supporting
affidavit adequately set forth facts to show

that the trial court abused its discretion in

A-48

denying the petition. (Colletti v. Schrieffer's

Motor Service Inc. (1962), 38 Ill. App. 2d

128, 186 N.E.2d 659.) A court of review may
disturb a trial court's decision regarding a
section 72 petition only if it finds that the

court abused its discretion. Stallworth v.

Thomas (1980), 83 Ill. App. 3d 747, 404 N.E.2d
554.

The criteria for a successful section
72 petition are well established. A party
must demonstrate: (1) the existence of a
meritorious defense or claim; (2) due diligence
in presenting this defense or claim to the
court in the original action; (3) that, through
no fault of his own, an error was made or a
defense or claim was not raised; and (4) due
diligence in filing the petition. In addition,
the petition must set forth specific factual
allegations in support of each element in

Order to prevail. Stallworth v. Thomas.

The purpose of section 72 petition is

to permit the vacation of judgments where
facts exist which, had they been known to the
trial court, would have precluded the judg-

ment. (Diacou v. Palos State Bank (1976), 65

Ill. 2d 304, 357 N.E.2d 518; People v. Hinton

(1972), 52 Ill. 2d 239, 287 N.E.2d 657, cert.
denied (1973), 410 U.S. 940.) It must be a
fact that influenced the court in its judgment
but about which the court was inerror. Further,
the petitioner must demonstrate that through
no fault or neglect of his own the error of
fact could not have been discovered at the

time of the original proceeding. (People v.

Jennings (1971), 48 Ill. 2d 295, 269 N.E.2d

474; People v. Stewart (1978), 66 Ill. App.

3d 342, 383 N.E.2d 1179.) Section 72 is an
appropriate remedy where the omission of a
valid defense was caused by fraud, duress or
excusable mistake. It is not intended to

relieve a party of the consequences of his

A-50

Own negligence or mistake. Diacou v. Palos

State Bank; People v. Stewart.

It is Our Opinion that Novicky has alleged
Specific facts in his petition, recounted
above, which could have led the circuit court
to a different decision regarding the agreement
between him and Tsuetaki, as well as the modifi-
cations of that agreement, had they been known
at the time of judgment. The cornerstone of
Tsuetaki's case was his claim of economic
duress produced by Novicky's alleged refusal
to produce sufficient material to fill Tsuetaki's
Orders for contact lenses. It was on this
basis that the trial court held the modifica-
tions of the employment agreement to have
been made under duress and therefore unenforce-
able. Depositions taken during discovery in
the Syntex Federal case -- the testimony of
Tsuetaki himself as well as that of Bill Vranas,
the two principal witnesses in the action

against Novicky -- refute this. Thus, we

believe that Novicky has presented a meritorious
defense and the initial requirement for a
successful section 72 petition has been satis-
fied.

In his petition Novicky stated, in support
of the due diligence requirement, that these
facts were not brought out at trial because,
as an individual, he was economically precluded
from the scope of discovery available to Syntex,
acorporation. While this may not be sufficient
to establish due diligence in itself, we note
that the equitable powers of the court are
invoked in the consideration of section 72

petitions (Elfman v. Evanston Bus Co. (1963),

27 Ill. 2c 609, 190 N.E.2d 348), and that
section 72 relief is granted to achieve justice,
and that a liberal construction is used to

achieve that end. (Elfman v. Evanston Bus

Co.} Electrical Wholesalers, Inc. v. Silverstein

(1977), 47 Ill. App. 3d 689, 365 N.E.3d 375.)

The requirement of due diligence need not be

A-52

rigidly enforced when fraud or unconscionable

behavior is' shown. (Department of Public

Works & Building v. O'Hare International Bank

(1976), 44 Ill. App. 3d 934, 358 N.E.2d 1308;

see Esczuk v. Chicago Transit Authority (1968),

39 Ill. 2d 464, 236 N.E.2d 719.) We believe
that the apparently false testimony given by
Tsuetaki and Vranas may fairly be characterized
as fraud.

Further, itis our opinion that Tsuetaki's
self-serving testimony, depending upon the
court in which he had been called to testify
Or to give a deposition, constituted unconscion-
able behavior. Since it can hardly be attributed
to any fault on Novicky's part that Tsuetaki
and Vranas did not testify truthfully, we
conclude that the requirement of due diligence
has been satisfied and that the trial court
abused its discretion in dismissing Novicky's
section 72 petition. Thus, the judgment of

the trial court is vacated and this matter is

remanded for further proceedings.

If.

We next address the issue of Syntex as
a necessary party. We first note that we do
not believe that Syntex should be joined on
the basis of the section 72 petition, since
as Syntex's former employee any fault for the
failure to join Syntex originally must be
attributed to Novicky. Relief pursuant to
section 72 is not designed to remedy the con-
sequences of a party's own negligence. Diacou

ve. Palos State Bank (1976), 65 Ill. 2d 304,

357 N.E.2d 518.

However, it is well established that if
a complete determination of a controversy
cannot be had without the presence of a party,
Or if a person, not a party, has a property
interest which a judgment may affect, the
court on application shall direct him to be
made a party. (Ill. Rev. Stat. 1979, ch. 110,

par. 25(1), now codified as section 2-406 (a)

of the Code of Civil Procedure (Ill. Rev.

A-54

Stat. 1981, ch. 110, par. 2-406€(a)); (Lain

ve. John Hancock Mutual LIfe Insurance Co.

(1979), 79 Ill. App. 3d 264, 398 N.E.2d 278;

Lerner v. Zipperman (1979), 69 Ill. App. 3d

620, 387 N.E.2d 946.) This is required by
fundamental principles of due process, since
a court is without jurisdiction to enter a
decree or judgment which affects a right or
interest of someone not before that court.

(Lerner v. Zipperman.) The requirement of

joinder of necessary parties is absolute and
inflexible and therefore an appellate court
has a duty to enforce the principle of law

requiring the joinder of parties sua sponte

as soon as it is brought to its attention.

Lerner v. Zipperman.

In our opinion due process requires
that Syntex be joined to this action upon
remand. Syntex is clearly a necessary party
since it is manifest from the record as well

as the parties' briefs on appeal that, as

A=-55

Novicky's former employer, Syntex has claimed
a property interest in the same alleged trade
secrets and patented processes that are the
Subject matter of the controversy between
Novicky and Tsuetaki. A judgment enjoining
Novicky from the use or dissemination of this
information, while allowing Tsuetaki to proceed
freely, could infringe the rights of Syntex,
as could a contrary disposition. Therefore,
we hold that upon remand Syntex must be joined
as a necessary party.
IIl.

Finally, since the issue is likely to
arise again upon remand, we address the scope
of the injunction against Novicky. An injunc-
tion should be reasonable and should only be
as broad as is essential to safeguard the

rights of the plaintiff. (Village of Wilsonville

vy. SCA Services, Inc. (1981), 86 Ill. 2d l,

426 N.E.2d 824.) Furthermore, as a general

rule, an injunctive order should not be broader

A-56

in scope than the relief sought in the plead-

ings. (Cook County v. Rosen & Shane Wine &

Spirits, Inc. (1978), 58 Ill. App. 3d 744,

374 N.E.2d 838; Schlicksup Drug Co., Inc. v.

Schlicksup (1970), 129, Ill. App. 2d 181, 262

N.E.2d 713.) We agree with Novicky that the
apparently perpetual injunction entered by
the trial court essentially enjoining him
from disclosing any and all information relat-
ing to the manufacture of contact lenses,
including but not limited to information which
could, would or did lead to the filing of
applications for letters patent, is too broad.
The granting of the injunction is reversed.

To aid in the enforceability of any possible
future injunction, the trial court should
delineate with greater specificity precisely
which information may not be disclosed or

used, and for what period of time.

4—-) /
sa j

For the foregoing reasons, the judgment
of the circuit court of Cook County is reversed
and remanded for a new trial.

Reversed and remanded.

MCNAMARA, P.J., and RIZZI, J., concur.

A-58

UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT

SYNTEX OPHTHALMICS,
INC., et al.,

Appellees, Appeal No.

)
)
)
) 83-838
V. )
)
NICK N. NOVICKY, et al., )
Appellants. )
GEORGE F. TSUETAKI,
et al.,*
Appellees, Appeal No.
V. 84-857

NICK N. NOVICKY, et al.,
Appellants.

— ee ee" 8 SS

DECIDED: July 18, 1985

Before DAVIS, Circuit Judge, NICHOLS, Senior
Circuit Judge, and BALDWIN, Circuit Judae.

PER CURIAM.

This case is back on remand from the

Supreme Court. Our original opinion issued

* As in our original consideration of the
case, Tsuetaki et al. did not participate in
the proceedings on remand. Also as before,
we treat this as one appeal.

A-59

on October 3, 1984, 745 F.2d 1423, 223 USPQ
695, and we shall not restate its contents.
Novicky filed a petition for certiorari,
mainly relating to the effect we gave to the
Illinois state judgment. On March 18, 1985
the Supreme Court granted certiorari, vacated
Our judgment, and remanded the case "for fur-
ther consideration in light of Marrese v.

American Academy of Orthopaedic Surgeons, 470

U.S. _ - {2985)<" 53 U.S.L.W. 3668. We
asked Novicky and Syntex for supplemental
briefs on the single question of the effect

of Marrese on our prior decision in this case.

Those briefs have been filed and the case is
now ready again for disposition.
I.
We are not certain whether the Supreme
Court vacated our entire judgment (including
those portions as to which certiorari was not

sought). See O'Connor v. Donaldson, (422

U.S. 563, 577 n.12 (1975). Because such a

A-60

full vacation may have occurred, we now rein-
state, without more, the parts of our opinion
and judgment (a) remanding to the District
Court the question of Syntex's title to the
'483 and '983 patents (the "private patents"),
(b) reversing the District Court's dismissal
of Novicky's counterclaim for fraud and un-
just enrichment regarding those patents, (c)
affirming the District Court's judgment that
Novicky misappropriated Syntex's trade secrets,
(d) reversing the District Court's final in-
junction and remanding for further considera-
tion of the duration and terms of that injunc-
tion in accordance with our opinion of October
3, 1984, and (e) affirming the denial of No-
vicky's motion to remand the state action
back to the state court. Those parts of our
prior judgment and opinion have nothing to do

with the Supreme Court's Marrese decision and

Opinion, and are in no way affected by either.

—————oO

Il.

The Supreme Court's Marrese decision, 53

U.S.L.W. 4265, does relate to our holding
that the state courts’ decision that Tsuetaki
(now Syntex) owns the "non-private" patents
is entitled to preclusive effect in the pre-
sent federal case. See 745 F.2d at 1431-33,
223 USPQ at 701-702. Accordingly, we have
reexamined that conclusion in the light of
the Marrese holding that, where a prior state
court judgment is involved in a federal suit,
federal courts should apply the state's pre-

clusion rules on issues of res judicata.

Illinois applies the same principles of
claim preclusion as does the federal law
cited in our prior opinion. 745 F.2d at
1432, 223 USPQ at 702. A recent Illinois
Supreme Court decision stated: "{A] final
judgment rendered by a court of competent
jurisdiction on the merits is conclusive of

the rights of the parties and their privies,

A-62

and, as to them, constitutes an absolute bar
to a subsequent action involving the same

Claim, demand or cause of action." Spiller

v. Continental Tube Co., 95 Ill. 2d 423, 447

N.E.2d 834, 838 (1983). The same rule was
applied by the Illinois Appellate Court in
holding that a prior decision of a federal
bankruptcy court precluded a later Illinois
Suit on the same claim: "The value of a plea

of res judicata is not determined by the rea-

sons given by a court in support of that judg-
ment nor is it mitigated by the fact that it
rests upon an erroneous view of the law.
[Citations omitted.] Consequently, a cause
of action by a court of competent jurisdic-
tion [sic] cannot be tried again in new pro-
ceedings before the same or a different tri-
bunal, except in a direct action to set aside

the prior adjudication." In re Donnellan, 90

Ill. App. 3d 1032, 414 N.E.2d 167, 171

(1980). It follows that, under Illinois pre-

A-63

clusion law (as under federal law), the deci-
Sions of the state trial court and of the
Appellate Court that Novicky did not own the
"non-private" patents (see 745 F.2d at 1431-
32, 223 USPQ at 701-702) "are entitled to
preclusive effect." 745 F.20 at 1432, 223
USPQ at 701.+/

Novicky tells us that these general Illi-
nois preclusion rules are overborne by another
supposed rule, i.e., that an appellate court's
mandate of remand is treated by Illinois law
as determinative "as distinguished from its
Opinion." (Brief of Defendant-Appellant

Novicky on Remand, p.6.) This supposed rule

is invoked because the Illinois Appellate

1’ as we previously said (745 F.2d
at 1432 n.17, 223 USPQ at 701-702 n.17), the
fact that a rehearing petition appears to be
still pending in the state appellate -court
does not prevent that court's judgment from
having conclusive effect. See Sixty-Third &
Halsted Realty Co. v. Goldblatt Bros., 342
Ill. App. 389, 96 N.E.2d 838, 843, aff'd 410
Ill. 468, 102 N.E.2d Ill. 2d 291, 427 N.E.2d
563, 570 (1981).

A-64

Court ended its opinion as follows: "For the
foregoing reasons, the judgment of the circuit
court of Cook County is reversed and remanded
for a new trial." That mandate is said wholly
to wipe out the state trial court's decision,
even though the Appellate Court's opinion
indicates that it accepted the part of the
trial decision bearing on the ownership of
the "non-private" patents. But the two Illinois
decisions Novicky cites (in support of his
argument) stand for quite a different general
Principle -- that the mandate should be con-
strued in the light of the opinion and the
trial court should abide by that mandate and

not act beyond its dictates. PSL Realty Co.

¥. Granite Inv. Co., 86 Ill. 2d 291, 427 N.E.

2d 563, 571 (1981) ("In construing the lan-
guage [of the mandate] matters which are im-
plied may be considered embraced by the man-
date. (Citations omitted.] The trial court
may only do those things directed in the man-

date. [Citation omitted.] The trial court

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has no authority to act beyond the dictates

of the mandate."); Bradley v. Howard Hembrough

Volkswagen, Inc., 89 Ill. App. 3d 121, 124,

411 N.E.2d 535, 537 ("When a trial court's
judgment is reversed, the trial court is clearly
bound by the appellate court's determination
of all questions decided and can only act in
such proceedings in a manner as conforms to

the appellate court's judgment") .2/

2/ Other Illinois opinions (not cited
by Novicky) contain comparable (and even more
explicit) language. See Pittsburgh, C., C. &
St. L. Ry. Co. v. Gage, 286 Ill. 213, 217,
121 N.E. 582, 584 (1918) ("Where a judgment
is reversed by an appellate court, the judgment
of the appellate court is final upon all ques-
tions decided, and those questions are no
longer open to consideration. If the cause
has been remanded, the court to which it is
remanded can take only such proceedings as
conform to the judgment of the appellate court.
If specific directions are given, the court
can do nothing but carry out the specific
directions. If specific directions are not
given, it must be determined from the nature
of the case what further proceedings are proper,
and it is the duty of the court to which the
cause is remanded to examine the opinion and
proceed in conformity with it."); Shlensky v.
South Parkway Building Corp., 44 Ill. App. 2d
135, 194 N.E.2d 35, 38 (1963) ("It was the
duty of the Circuit Court to examine the opinion
of the Supreme Court and proceed in conformity
with it.*).

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Here, it is clear that the Illinois Appel-
late Court reversed and remanded for a new
trial on aspects of the case other than the
ownership of the "non-private" patents (the
aspects on which remand was ordered were
treated at length in the appellate opinion)
and that that specific direction to the trial
court was incorporated in the initiai phrase

of the mandate, "For the foregoing reasons,

the judgment .. . is reversed and remanded."

Conversely, under [Illinois law, the unre-
versed parts of the trial court judgment (in
particular, the decision as to the ownership
cof the "non-private" patents) remained out-
Standing, unaffected by the reversal/remand,
and formed a part of the Appellate Court's
mandate. In short, Novicky has no viable
exception to the Illinois preclusion rules on
which to rest. |

III.

Novicky asks us, at this late stage, to

A-67

order the District Court to abstain from fur-
ther proceedings, at least until the state
court proceeding is completed. This is a new
argument and we decline to consider it now.
We have very little information on the cur-
rent status of the proceedings below, or of
those in the state courts -- and we have no
basis whatever for any judgment of our own on
appropriateness, convenience, or other fac-
tors bearing on possible abstention. The
matter is left open for the District Court if
Novicky decides to make an abstention request
to that tribunal.

The result is that, after further consi-
deration as directed by the Supreme Court, we
reinstate Part VI ("Conclusion") of our pre-
vious opinion, 745 F.2d at 1437, 223 USPQ at
706, and reach the same conclusion.

Affirmed in part, Modified in part, Re-

versed in part, and Remanded.

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UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT

SYNTEX OPHTHALMICS, INC.,
ARAPAHOE CHEMICALS, INC.,
Appellees,
No.

NICK N. NOVICKY, GEORGE

F. TSUETAKI, RUSED KONTACTS

OF CHICAGO, INC.,
Appellants

)
)
)
)
V. ) 84-838/857
)
)
)
)
)
ORDER

A petition for rehearing and a sugges-
tion for rehearing in banc having been filed
in this case,

UPON CONSIDERATION THEREOF, it is Ordered
by the court that the petition for rehearing
be, and the same is hereby, Denied.

The suggestion for rehearing in banc is

declined.

FOR THE COURT

Francis X. Gindhart, Clerk
October 2, 1985
Date

cc: Keith V. Rockey
James W. Gould

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_1384%3A2. Public record. Not legal advice.