Petition for Writ of Certiorari — Wilkin v. Sunbeam Corp.

Supreme Court brief1967

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FILED :

SEP. 11 196? °

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No. 60 6 : JOHN F. DAVIS, CLERK - i

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SUPREME COURT r THE UNITED STATES

_ OCTOBER TERM, 1967

KATHLEEN K. WILKIN,

Petitioner,

. VS. ’ |

‘SUNBEAM CORPORATION,. = ———t™

. Respondent,

PETITION FOR WRIT OF CERTIORARI TO THE.

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

_ Everett C, Ferris

Rosert C, ALLAN

One Twenty Building

Wichita, Kansas 67202. -

and

. JoHN H. Wippowson

306 Bitting Building

Wichita, Kansas 67202

. and

DALE M. Sruckxy*

.1600 Wichita Plaza Building

P.O. Box 997

Wichita, Kansas 67202

' Attorneys for Petitioner

“Counsel upon whom service is to be made.

“EB. L. Murpmraant, Inc., 926 Cherry Street, Kansas City, Mo. 64106, HArrison 1-8080

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INDEX

_ I. Court Opinions Below . \1

II. Jurisdiction of the Court and Grounds Urged for

Allowance of the Writ ....... , ences 2

III. The Question Presented for Review itaisiiccegaielinis sine? ae

IV. Statement of the Case and Facts -:..........0----------. ‘>

V: Argument and Authorities .......:............. iim

VI. The Court of Appeals Decision ‘phinnieaiiiaaieneiiatanea ME

v _A. Conflict with the Fifth Circuit ...... i,

_B. ‘The Instructions of the District Court ................. . 20

C Misunderstanding by the Court of hea caues Sean > 25

The Prayer ae |

Appendix—Opinion, United States Court of Appeals

Tenth CPOE, Fel BB, TG nicer See Kornpnreeninchonw’ ‘a

. TABLE OF CASES

Colgate-Palmolive Company v. Carter Pieducia, 130 F. -

Supp. 557, 230 F.2d 855 (1956) .......... 9

Dunn v. St. Louis-San Francisco. Railway, etc., 370 F.2d -

ee eee ee 20

Imperial Chemical Industriés, Limited v. ‘National Dis-

tillers and Chemical Corporation, : C.A. 2d, 1965) 342

ct FeRP RIOR dear Ye CORE HAN po-er-e DB, 29

Seismograph -Service Corporation v. Offshore Raydist,

Inc., 135 F. Supp. 342, 263 F.2d 5, C.C.A. 5 (1958)........

| 2, 10, 11, 13, 14, 15, 16, 17, 18, 19, 21, 23, 24, 25

Smith v. Dravo Corp., (C.A. 7th, 1953) 203-F.2d 369 ..... 28

Tabor v. Hoffman, 118 N.Y. 30, 23 N.E. 12 ,(1889) .......

aes AN EATS a jisiitadiasilbn sah dishes 9, 23, 27, 28

we s STATUTES ee |

28 US.C., Section 1254 (1) sec hee Dctinigs Remain an

28 USC, Section 1893.) <4

35 U.S.C, Séction 122 ....... ; vicahaatadidaaed seevereeneeeeeseneareces OD

| Restatement of ‘Torts - diccnsercnmmimoenines 9, 19, 21, 23, 24: 25, 29, 30

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No.

SUPREME COURT OF THE UNITED STATES

_ OCTOBER TERM, 1967

-" KATHLEEN K. WILKIN,

Petitioner,

SUNBEAM CORPORATION,

' PETITION FOR WRIT OF CERTIORARI TO THE

_ UNITED STATES COURT OF APPEALS :

FOR THE TENTH CIRCUIT 3

' To ‘THE HonoraBLe EArt WarREN, CHIEF JUSTICE OF THE

UnITeD STATES, AND THE ASSOCIATE JUSTICES OF THE.

SUPREME COURT OF THE UNITED STATES:

Your petitioner respectfully shows to the Court:

I. COURT OPINIONS BELOW

The opinion of the Court of Appeals has not as yet

been reported. It is found on page 4 of the supplemental —

transcript of the record frem the Court of Appeals, and is

reproduced herein in the appendix, hereinafter, p. Al.

The District Court did not ‘deliver any opinion.

A petition for rehearing in the case was denied June

12,1967. (SR. 7). |

Il. JURISDICTION OF THE COURT AND GROUNDS

URGED FOR ALLOWANCE OF THE WRIT

The Court: of Appeals dated and filed its judgment

April 20, 1967. (SR.5). 0

' This Court has jurisdiction to review the juagpinenls |

under the provisions of Section: 1254 of the Judicial b ses

28 U.S.C., Section 1254, (1).

The petitioner urges the following grounds for. allow-

_ ance of the writ:

1. The decision of the Court of Appeals for the Tenth

Circuit results in. a conflict with a decision of another

Court of Appeals on the same matter of general : law, -

namely, Seismograph Service‘Corporation v. Offshore. Ray-

dist, Inc., 135 F. Supp. 342, 263 F.2d 5, C.C.A. 5-(1958),-a

case of first impression in the Fifth Circuit, and this, case

‘is one of first impression in the Tenth Circuit:

2. The case is one wherein the issues are generally

important, especially in regard to manufacturing» enter-

prises and creative members: of the public.

3. The decision of the Court .of Appeals reflects: a

misunderstanding of the applicable law.

4. The decision of the. Court of Appeals reflects a

_misunderstanding of the.essential elements which the pe-

titioner must. establish fo obtdin relief, the Court of Ap-

peals overlooking in one theory of recovery the basic

issues agreed upon by both petitioner and respondent nec-

. | Supplemental transcript of the record.

. ew pers

Perr rEracumreeemerenentier

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_ essary for the petitioner to evel to find the respondent

liable. ~~,

5. The decision of the Couirt of Appeals reflects a ;

* ‘misunderstanding of the wean of the petitioner erect

out the case. £

6. The « decision of the Court of Appeals reflects a

misunderstanding of the import of indisputable ‘fact.’

% The decision of the Court of Appeals reflects a

misunderstanding of the effect of the District, Court’ s in-

structions to the jury.

TT. red QUESTION PRESENTED FOR REVIEW

‘Where a large national manufacturing corporation of

household appliances receives from a housewife and school

teacher through a patent attorney employee skilled in the .*

art, a member of the Bar and charged with receiving out-

side submissions, disclosure of (1) a household appliance

in the form of a demonstrated working model and the

written specification and drawings of a pending United

States patent application, a copy of which is retained by:

the corporation, and.(2) the name of her patent attorney

who is a member of the Bar, and thereafter after concern-

ing itself with a similar household appliance and through

_ its same patent, attorney recalls her patent application and

device, surreptitiously through its same patent attorney

employs .a skilled layman. patent investigator who. using

an. alias, without disclosing. the principal, and under false

pretenses obtains by first contacting her’ and then her

patent attorney, confidential information about her yet

pending patent application. and household appliance,

namely; that no claims are allowed in the application and

that she has not been successful in commercially exploiting

her household appliance, and where it uses such sur-.

;

reptitiously obtained information in eminciatig manu-

facturing and selling its similar ‘household applignce, is

the manufacturer liable for her damages? .

CW. STATEMENT OF THE CASE AND FACTS

The District Court jurisdiction was founded upon.di- _

versity under. 28 U.S.C., Section 1332. (R. 2)2.

This isa misappropriation or wrongful appropriation

case. Respondent Sunbeam Corporation after having prior

knowledge and before marketing the product in question

used “improper means” to obtain from petitioner ‘prop-

erty rights in the product belonging to petitioner, and con-

fidential information about the property rights. Sunbeam

wrongfully used the improperly obtained property rights

and information to its advantage. Petitioner has not been

compensated for her damage. The property rights im-

' properly obtained by Sunbeam were a device, the plans

and specifications therefor, for baking and/or grilling

sandwiches, small pies, and the like, and confidential in-

formation concerning this device. Sunbeam wrongfully

used the property rights in marketing a device under the

mark “Sur beam Party Grill” for baking: and/or grilling

sandwiches, small pies, and the like. (R. 63-69). :

Petitioner first brought ‘suit in the District Court of

Sedgwick County, Kansas, for misappropriation of prop-

erty rights confidentially disclosed to Sunbeam in 1957,

but obtained properly by Sunbeam: Removal to the Fed-

eral District Court of Kansas was effected by- eee

and answer made. (R. 1-10).

During discovery petitioner learned of saint

“improper means” activity of Sunbeam in obtaining and

2. The Transcript of Record will herein be referred to ra R.

followed by a page number therein.

nit arene tadashi

Sr a

wrongfully using property rights and confidential infor-

mation, and filed an amended complaint incorporating

such. Sunbeam answered. (R: 63-73). ;

In view of this new evidence of “improper means” in

obtaining, petitioner filed. a motion for summary judg-

‘ment. It was briefed by both parties and argued to the

Court. Petitioner’s motion was overruled, (R. 81). -

Trial was had. Relative “improper means” of ‘Sun- -

beam, in obtaining, the Court only instructed the jury “that

should you find the defendant (Sunbeam), by. employing

. improper means in September and/or October, 1958, ob-

tained or acquired business information and the like from

plaintiff (petitioner), then you may consider such fact

along with all the-other facts and circumstances you may

find to exist in the case in determining whether or not

plaintiff (petitioner) disclosed something in confidence to

defendant (Sunbeam) which was novel to defendant and

which defendant used in its Sunbeam Party Grill’, and

followed with an instruction relative determination of

whether Sunbeam used “improper means”. \(R. 112). - The .

Court refused the pertinent . requested instructions of pe-

titioner. (R. 103-104). The jury found a general verdict

for Sunbeam and the Court entered judgment accordingly.

(R.. 117).. The Court overruled the motions of petitioner

for a directed verdict, judgment notwithstanding the ver-

dict, and a new trial, and entered an order to that effect.

_(R. 117-118). |

Petitioner takes the position that wiles facts

make Sunbeam liable as a matter of law.

Petitioner is a sixth grade school teacher, housewife

and.mother, and has been a resident of Wichita, Kansas,

from prior to 1956.to date.

Respondent is a large national manufacturing corpo-

‘ration of a wide variety of products, saad electric

household appliances.

Prior to 1957, petitioner conceived of a grilling and/or

baking device (hereinafter referred to as the Wilkin De-

vice) to make sandwiches and other edibles having a center

filling of meat, fruit, cheese or the like, and a patent ap-

plication was filed in the Patent Office. (R. 85, 109).

A working model was made of the device. (R. (8, 70,

86). . :

J anuary 9, 1957, petitioner wrote Sunbeam that she

had applied for patent on the Wilkin Device and if Sun-

beam was interested she would forward a copy of: the —

_. patent application. (PX 3-R. 397)%. In response, Mr. John

R. Hall, a patent attorney employee of Sunbeam wrote

J anuary 16, 1957, that Sunbeam would be pleased to re-

ceive her patent application and determine if it would be

interested in acquiring any rights therein. (PX 4-R. 397).

In reply, petitioner wrote January 29, 1957, that her hus-

band would be in Chicago on February 5, 1957, and could .

.demonstrate the working model of the Wilkin Device and

deliver a copy of the patent application. (PX 5-R. $08).

(R. 8, 64, 65, 69, 70, 85, 88, 263).

February 5, 1957, petitioner’s ; husband was in Chicago

and demonstrated the working model of the Wilkin De-

vice to Mr. Hall and a Mr. Neil M. Rose, who was in

charge, another patent attorney employee of Sunbeam.

They were authorized to recive and evaluate outside sub-

missions. In addition, he showed and left with them copies

of the patent application specification and drawings of the

3. Petitioner’s exhibits will herein be referred to by PX, and

where appropriate followed by R. and a page number reference to .

the transcript of record. ‘s

Wilkin Device. Mr. Rose noted that J ohn Widdowson rep- .

. Tesented petitioner. (R. 8, 70, 85, 86, 264-69). (PX 25, 26,

27-R. 409-11). (PX 34-R.413). (PX 22-R 407).

February 15, 1957, Mr..Hall wrote petitioner that since

. it appeared that a large promotional campaign would be

required in marketing the Wilkin Device, Sunbeam’ was

not interested in acquiring any rights under her patent

application. Transmitted with this letter were the copies

ofthe patent application specification and drawings which

had been left with Sunbeam. (PX 6-R. 398). _ Sunbeam

made and retained copies. (R. 294). ;

In the summer of 1958, employees of Sunbeam began

cooking tests, and as a result Sunbeam began to ‘construct

and assemble various: models of a baking and/or grilling

device for making sandwiches, small pies, and the like,

which was marketed as the Sunbeam PARTY GRILL. (R.

8; 71, 85, 86, 98, 291, 293, 297).

. Sunbeam through Mr. Rose, the patent attorney em-

ployee skilled in the art of electric household appliances,

undertook investigation as to possible infringement by the

baking and/or grilling devices. During such inquiry, he

recalled and examined the file concerning submission of

the Wilkin Device. Included was the address of petitioner

ahd the name and address of John H. Widdowson, peti- .

tioner’s patent attorney. (R. 20, 70, 221, 222, 223, 224, 272,

273, 290, 293, 297). (PX 22-407). |

September 7th or 8th, 1958, Sunbeam, through Mr.

- Rose, called by long telephone a Mr. Ulmont O. Cumming,

President of International Service Corporation, and re- |

quested that Mr. Cumming investigate the present status

as to allowance of claims in the patent application cover-

ing the Wilkin Device and further to determine whether

or not said device was. being exploited commercially. -(R.

231-33, 19, 20, 70, 221, 293). (PX 7-R. 399).

Mr. Cumming, while in Kansas City, Missouri, and ~

using the name Robert Laird, contacted petitioner’s resi-

dence by telephone and talked to petitioner’s husband.

Mr. Curnming told Mr. Wilkin that he might possibly be

interested in buying petitioner’s patent application icov-

ering the Wilkin Device. Mr. Wilkin then informed him

John Widdowson was Mrs. Wilkin’s patent attorney .and

should be contacted regarding the matter. (R. 230- — -

(PX 8-R. 399).

Thereafter, during. September and ‘dies of 1958, ee ae oe

through “correspondence between Mr. Cumming (always

using the name Robert Laird) and John Widdowson, Sun-

beam, through - Mr. Cumming, learned that petitioner’ s

patent application was still pending in the Patent Office;

that no claims had been allowed and the Wilkin Device -

was not being:commercially exploited. Sunbeam, through

Mr: Cumming, also obtained from Widdowson a copy of

the then current Wilkin patent application specification and

drawings. In addition, Sunbeam, through Mr. Cumming,

learned that the working model of the Wilkin Device was

still in existence. (R. 230-243, 19, 20, 70, 221, 222). (PX

8-R. 399). (PX 9, 10-R. 400). (PX 11-R. 401). (PX 12-R..

402). (PX 13-R. 403). (PX 14-R. 404). (PX 15-R. 404).

(PX 16, 17-R. 405). (PX 18, 19-R. 406). (PX 30-R. 413).

Thereafter, Sunbeam commercially marketed the Sun-

beam PARTY GRILL in 1961. (R. 8, 71).

V. ARGUMENT AND AUTHORITIES

Where spying is carried on and the discloser aus not

.know what is going on there’ cannot be any basis for re-

_ quiring a confidential disclosure.

There is not a question ‘of whether or not the Wilkin

Device was novel to Sunbeam, due to the prior knowledge

and subsequent improper activities of the Sunbeam wahins

_attorney employee. Improper means of discovery refutes

any prior knowledge of what is sought. The activities of

Sunbeam through the ‘skillgd Mr. Cumming, employed by

Mr. Rose, Sunbeam’s expert patent attorney in this field,

with his prior knowledge of the Wilkin Device and patent

application, his activities and concerns of patent applica-

tion claim allowance: and patent clearance, ‘connckoabvely

_ Prove. novelty to and use e by Sunbeam. |

A leading case is Tabor v. Hoffman, 118 N.Y. 30, 23

N.E. 12 (1889). A recent (1956) case in the Fourth Cir-

cuit is Colgate-Palmolive Company v. Carter Products, 130

F. Supp. 557, 230 F.2d 855. The Restatement of Torts was

‘ published in 1939, long after a considerable body of case

law had been developed on the subject here at hand.. It

has been followed universally in this field. Sec. 757 of

said text states:

“One who discloses.or uses another’s trade secret =

if without being privileged to do so, is liable to the other

( a) He discovered the secret’ by improper

means.””* ;

Section 759 states:

: “One who, for the purpose of amas a rival

business interest, procures by improper means infor-

mation about another’s business is liable to the other

for the harm caused by his possession, disclosure or

use of the information.

4. Paragraph (b) of Sec..757 of The Restatement of Torts sets

forth the more common situation requiring a disclosure in con-

fidence. —

5. See the text on oe 10 through 13 re Section 757, and

pages 23 and 24 re Section 759 ;

A recent case, and a remarkable one insofar as _the_ |

facts therein when they are compared _ to the. factual situ-

ation of the case at hand, is Seismograph Service Corpo-.

ration v. Offshore Raydist, Inc.,.135,F. Supp. 342, 263 F.2d

5, 5th Cir, (1958). In the District Court action (Eastern

Division of Louisiana, New Orleans Division), Judge J.

Skelly Wright, District Judge, states on pages 354 and 395

of the opinion as follows: ,

“(14-17) ...The robber baron morality of another day

is no longer acceptable. Courts are insisting on in-

creasingly higher standards of commercial integrity.

Precision Instrument Mfg. Co. + “ utemotive Mainte-

nance Mach. Co., supra; Keysto a uiler Co. v. Gen- ©

eral Excavator Co., 290 U.S. 24., ©+ S. Ct. 146, 78 L.

Ed. 293; Franke v. Wiltschek, 2 Cir., 209 F.2d 493, 499;

Allen-Qualley Co. v. Shellmar Products Cos D. C., 31

F.2d 293, affirmed 7 Cir., 36 F.2d 623; Id., 7 Cir., 37

F.2d 104. . It has been long recognized that any patent

obtained’through fraud and dishonest dealings is un-.

enforceable in a court of equity. Precision Instru-

ment Mfg. Co. v. Automotive Maintenance Mach. Co...

supra; Keystone Driller Co. v. General Excavator Co.,

supra; Pomeroy’s Equity Jurisprudence, 5th Ed.,

§§ 385, 397, 401, 402a. Now business information or

trade secrets, not arising to the staiure of invention,

are protected. Franke v..Wiltschek, supra;:Smith v.

Dravo Corp., 7 Cir., 203 F.2d 369; Id., 7 Cir., 208 F.2d

388; Schreyer v. Casco Products Corp, 2 Cir., 190 F.2d

921; Matarese v. Moore-McCormack Lines, 2 Cir., 153

F.2d 631, 170 ALR. 440; Chesapeake & Ohio Ry. Co.

v, Kaltenbach, 4 Cir., 95 F.2d 801; Hoeltke v. C. M.

Kemp Mfg. Co., 4 Cir., 80 F.2d 912: Allen-Qualley Co.

v. Shellmar Products.Co., supra; Booth v. Stutz Motor |

Car Co., 7 Cir., 24 F.2d 415, Id., 7th Cir., 56 F.2d 962.

The fact that the business information is otherwise

available is no defense. The improper acquisition it-

self creates the liability for damages. Franke v. Wilt- -

- schek, supra; Smith v. Dravo ‘Corp., supra; Vulcan

Detinning Co. v. American Can Co., 72 N.J. Eq. 387,

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67 A. 339, 12 L.R.A., N.S., 102; Tabor v. Hoffman, 118

- N.Y. 30, 23 N.E. 12. ‘One who, for the purpose of

- advancing a rival business interest, procures x aie

proper means information about another’s: busin ;

liable to the other for the harm caused by his pos- —

session, ‘disclosure or use of the information.’ Restate- .

_:ment of the Law of Torts, § 759. -

(18) Even where it cannot be said that the par-

ties stand in confidential relations, impropor acquisi-

tion of another’s business information or trade secrets

subjects the perpetrator to liability in damages. Re-

_ Statement of the Law of Torts, §§ 757, 759. And a

court of equity will enjoin the use of the business in- ~

formation or trade secrets so*obtained. Franke v.

Wiltschek, supra; Smith v. Dravo Corp., supra; Allen- .

Qualley v. Shellmar, supra. No single test can be ap-

plied in all cases where improper acquisition of

business information is charged. ‘The inventiveness of

the devious mind staggers the imagination. It is simply

the difference between right and wrong, honesty and

dishonesty, which is the touchstone in an issue of this

kind,” . . . (Emphasis added).*

A concise statement of the pertinent facts in the Seis-

mograph case is as follows:

Hastings disclosed his Raydist System to Seismo-

graph and Seismograph thereafter secretly started us-

ing information to build its .own similar system.

' Hastings further disclosed to Seismograph the exist-

ence of a significant patent (Honore) without identi-

fying the same, ‘which patent anticipated his system

and which would have to be acquired. Hastings also.

6. This was approved by, the Court of Appeals (5th Cir.),

page 28 of its opinion, to-wit:

... “We felt that appellant’s conduct in its business dealings

with Hastings Instrument Company was so flagrantly inequi-

table as not to require legal citations, and that. the principles

and authorities had been amply discussed in paragraphs edi-

torially numbered 14 through 18 of the district court’s opinion,

as found in D. C., 135 F. Supp. 342, 354-355, with which dis-

cussion we agree.” .

informed Seismograph that he had opened -negoti-

‘ations to acquire rights under said patent. Hastings’

disclosures to Seismograph were made with the under-

standing that it was for the benefit of and in further-

ance of a joint venture which was under consideration

by the parties. Seismograph, after already having de-

_ cided to terminate negotiations with Hastings for.a joint

venture, notified its skilled. patent counsel in Chicago

of the patent mentioned by Hastings and also the name

of Hastings’ Washington patent counsel. and instructed

its Chicago patent counsel ‘That every effort be made

to identify it so thatthe rights thereunder could be

acquired.”: Seismograph’s Chicago counsel contacted

his: Washington associate patent counsel and: fully

briefed him on the status of Seismograph’s System,

_ the negotiations with Hastings, and the name. of Has-

tings’ Washington patent counsel. The; Washington

associate patent counsel of Seismograph’s Chicago ~

_ patent counsel contacted an employee of Hastings’

_ Washington patent counsel and by ‘deception, misrep-

resentation and concealment’ learned the identity of

' the Honore patent in question. Thereafter, Seismo-

graph acquired exclusive rights in the geophysical field

‘under said Honore patent.

.A concise statement of the — facts in me case

at hand is as follows: ;

In 1957, petitioner disclosed to Sunbeam. the patent

application specifications and drawings, as well as a work-

ing model of the “Wilkin Device”. “This disclosure was

made with the understanding that some business arrange-

- ment between petitioner and Sunbeam might result there-

from. In 1958, after Sunbeam had already commenced.

working with a device structurally and \functionally simi-

lar to the Wilkin Device, Sunbeam through its skilled pat-

ent counsel determined in considering. patent clearance

that it needed to obtain additional information regarding

the Wilkin Device, including in particular whether or not

7 ; ’

13:

any claims had been allowed in the patént application.

Sunbeam’s patent counsel with ino intention of entering

into any negotiations with petitioner in reference to ac-

quiring any rights in the Wilkin Device: (R. 290) hired a

private lay investigator to obtain the information Sunbeam

desired from petitioner. The private lay investigator hired

by Sunbeam used an alias and obtained by “deception,

misrepresentation and concealment” the valuable confi-

dential information which was desired by Sunbeam. There-

after, Sunbeam used the information (R: 222) and marketed

its device. oie

_ Sunbeam received, through its skilled patent counsel,

_ .the Wilkin Device (whether on a confidential or non-con- - -

fidential basis"is immaterial) in 1957, when it was con-

templated by both parties that an agreement might result

therefrom whereby Sunbeam would acquire rights under

petitioner’s patent application for some'monetary consid-

eration to petitioner: Later, in 1958, Sunbeam commenced

work on a deVice which, in the: opinion of its patent at-

torney was similar to the Wilkin Device. It was then de-

termined by the same patent counsel to get confidential

information coneerning the. Wilkin Device. To do this,

Sunbeam’s counsel did not contact petitioner or her :at- |

torney (whose names and addresses were available in

Sunbeam’s files) but instead hired a private lay investi-

gator to obtain said information. The attorney for Sun-

beam did not give the lay investigator the name of the

attorney for petitioner. This lay investigator did not dis-

close his true identity and used an alias at all times, did ,

not disclose the name of Sunbeam for whom he was act-

ing and represented to petitioner at all times that he might

be interested in buying rights undér petitioner’s patent

application when, in fact, such was not true. The conduct

of Sunbeam was far more reprehensible than that present —

: on the situation of the Séismograph case, supra. :

‘By “deception, misrepresentation and concealment,” “4

Sunbeam acquired from petitioner her trade secret, the

. Wilkin Device, and discovered confidential information

concerning the same, to-wit:

1. The fact that no claims had been allowed to

petitioner in her still pending patent application.

2. The fact that petitioner had not been success-

ful in commercially exploiting the Wilkin Device.

3. Copies of the then current patent ‘application

specification and drawings of the Wilkin Device

thereby disclosing to Sunbeam the Wilkin Device and

that there had been no change in the same subsequent.

to the submission to Sunbeam on. February 5, 1957.

4, The fact that a working model of the Wilkin De-.

vice was in existence and ovpliahte to be demdin-

strated.

In the Seismograph case, it was shown by the evidence

that Seismograph, through its. own independent patent

search, had discovered the Honore patent. The important

fact that Seismograph did not know was that this was ©

the particular patent ‘with which Hastings was concerned

and Seismograph did not know this important fact until

it learned the same through the “deception, misrepresen- |

tation, and concealment” of its patent counsel.

In the case at hand, even though Sunbeam knew of .

_petitioner’s patent application from 1957, it must be re-

membered. the application pending in the Patent Office

was confidential information in 1958. ‘The status of the

application, i.e., whether or not any claims had been al-

lowed, whether or not any amendments had been made,

whether or not it had been abandoned, and, in fact, any

information about me application was a —— secret hy

petitioner. . 2

: 15°

Now, we come to Sunbeaiil $s position in 1958. _ Sun-

beam had and .was using a device which, in the opinion —

of its skilled patent counsel, could infringe patent claims

allowed on the Wilkin Device, if, in fact any claims had’

been allowed. This patent counsel recognized in Sun-

.. beam’s device a combination of elements embodied in the

‘Wilkin Device.. Since the devices of Sunbeam and the

- Wilkin Device were different specifically, he was con- —

cerned with a patent claim in petitioner’s patent applica-

tion. broad enough to cover all of the devices. Sunbeam

- would have been aware, as a matter of public record, if

_ petitioner had been issued a patent, so it could only con-

jecture whether on the one hand petitioner had been al-

_lowed claims which it would infringe upon marketing or

whether, on the other hand, petitioner’s application had

abandoned. The patent counsel of Sunbeam made

a ro termination that not only was the Wilkin Device novel

unbeam but was so..novel that patent clainis might

na been allowed, and that the claims could be such

that Sunbeam might subsequently upon issuance of the .

patent be infringing. .(R. 224). This is also detetminative

of use. Sunbeam’s concern was infringing a claim in a

patent of the petitioner reciting exactly what they would

be marketing. Sunbeam cannot be heard to explain other-

wise. It is readily understandable why Judge oe in

the Seismograph case, supra, states:

. “The improper acquisition itself creates the lia-

bility for damages.”

Seismograph’s concern resulting \ in its wrongful taking, |

by its patent counsel was infringing claims in the Honore

patent. Sunbeam wrongfully learned in 1958 that no

amendments or changes had been made in the specifica-

tion of petitioner’ § patent application, and thus no con-

tinuation or ° substitute rn: had ‘been filed by

petitioner. Sunbeam likewise learned it faced no compe- —

- tition and would not face future problems of patent claim

infringement of any claims then allowed to petitioner.

Over and above all of this information, Sunbeam learned

that petitioner still had the working model of the Wilkin

Device in 1958. The information about the patent appli-

cation and commercialization was admittedly -useful to

Sunbeam and undoubtedly so was the other information.

| Summing up, Seismograph had knowledge of the Hon-

ore patent but wrongfully learned from Hastings’ patent

counsel that this particular patent was the one which

Hastings had opened negotiations to acquire rights there-

under. Sunbeam, in 1957, obtained the Wilkin patent ap-

plication specification ahd drawings and had witnessed a

demonstration of a working model of the Wilkin Device. |

In 1958, the valuable information of and concerning the

subject matter which they needed and did not have’ was

exactly that which they wrongfully obtained through the

private lay investigator. There is no question that’ Has-

tings’ knowledge of the particular patent for which he was

negotiating was his business secret. Likewise, there is no

question that petitioner’s knowledge that no changes or

amendments had been made as to petitioner’s patent ap-

plication; that the same was still pending in the United

States Patent Office; that no claims had been allowed

therein; that petitioner had not been successful in com-

mercially exploiting the Wilkin Device; that the working

model of the same was still in existence and, that the trade -

secret Wilkin Device was the same in 1958 as it. was in

1957, were petitioner’s business and/or trade secfets.. The

_improper obtaining and admitted using by Sunbeam make

it liable. Relative the prior information obtained improp-

erly, see the Seismograph case, supra, by Judge Wright:

“The fact that the business information is otherwise avail-

able is no defense.”

—~

VI. THE COURT OF APPEALS DECISION

_ A. Conflict with the Fifth Circuit

_* The Court should review the applicability of the cor-

rect case law authority to the facts of this lawsuit as rep-

resented by Seismograph Service Corp v. Offshore Ray-

dist, Inc., 135 F. Supp. 242, 263 F.2d 5 (5 Cir. 1958). In

footnote 5 the Court of Appeals states, “Seismograph . . .

was an action to enjoin infringement of a patent obtained —

by fraudulent means. The language..of the opinion upon

which appellant relies was used in support of the Court’s

‘conclusion that the plaintiff therein had unclean hands

-and therefore was not entitled to relief.” This is incor-

rect relative this case. .

Relief as prayed was given counterclaimant in the

Seismograph case on the points of persons and activity.

The concern in both cases was the same, that of infringe-

ment of patent clairns. Damziges were not sought by the

counterclaimant. See page 346 of the District Court de-

‘cision. No loss of profits damages between the competing

litigants could be proven, and counterglaimant only sought

damages for patent infringement. amy

It is beyond question today that the basic distinctions

between law and equity have been abolished.? fe

in this case of first impression in this Circuit the panel rendering

- the decision has laid down standard of business morals and ethics

as a matter of equity jurisprudence where no equitable relationship

between the parties was found to exist. The decision imposes ob-

ligations, existent only in confidential relationships, upon parties

business dealings with Hastings Instrument Company was so

flagrantly inequitable as not to require legal citations, and that the

principles and authorities had been amply discussed in paragraphs

editorially numbered 14 through 18 of the district court’s opinion,

as found in D. C., 135 F. Supp. 342, 354-355, with which discussion

we agree.” ° ;

The admitted “unclean hands” activity of the Seismo- |

graph case, supra, is activity amounting to “improper

means”, the case at hand. In the Seismograph case, supra, - °

the relief. given the counterclaimant Hastings was given

because of the activity by the personnel of Seismograph

Service Corporation. The same activity by the same kind

of personnel for Sunbeam that is, skilled patent counse]

and investigator, instituting and bringing about the ob-

taining of confidential information by “deception, misrep-

resentation, and concealment” must give rise to relief for

. _ the petitioner. The Seismograph case, supra, the circuit

court decision, sets forth the surreptitious activity of Seis-

mograph thPough the skilled patent counsel and investi-

gator, page 15 beginning at the top of the second column

.. through the first full paragraph in column 1 on page 21.

' This is the conduct referred to regarding “improper means”

of obtaining information about trade secret business in-

formation. Please see the Seismograph case, supra, the

district court decision at page 355, footnote ‘‘20” to para-

graph $619".

“The business information and ‘we secrets

which Seismograph improperly acquired from Hastings

include the following: ... (b) the status of his pend-

ing patent application; (c) information on a signifi-

cant background patent ae) which he was then

negotiating for; .. .”

The latter information is what Judge Wright refers to

when he states on page 354: “The fact that the business

information is otherwise available is no defense. The im-—

proper acquisition itself creates the liability for damages.”

This is true because Seismograph -knew of the Honore

patent, but not that, this was the patent Hastings wanted,

; and this was information obtained by the Seismograph

skilled patent counsel and investigator, a Washington, D. ’

19°

C. associate who approached Washington, D. C. counsel of

‘Hastings.* The circuit court decision, pages 15-21, supra,

tells the whole story re prior knowledge of the Honore

patent by Seismograph. And, on this point, see the Seis-

mograph case, the district court decision, supra, page 355,

column 2, last sentence in the first paragraph:

“.. . Indeed, Seismograph even stooped to espionage

on Hastings’ patent. counsel.” :

Judge Wright in the. district court decision in_the

Seismograph case, supra, page 354, quotes with approval

the Restatement of the Law of Torts, Section 759, supra.

The Seismograph case, supra, completely in line with the

Restatement, as are all the, cases cited by the petitioner, |

is ample authority in the law to grant review to the -peti- ”

tioner. There is a direct conflict between the Fifth and

Tenth Circuits, Examining the elements essential for re-

covery under the Restatement, Section 759, supra, and the .

‘Seismograph case, supra, if the: petitioner is not “a rival

business interest” of respondent, it is only because of the

size of the two, and the law has never denied protection

to the weak or small. The “unclean hands” activity of

Sunbeam in 1958 is certainly “improper means”. Confi-

dential “information” about petitioner’s business was ob-

tained in 1958 by Sunbeam by such “improper means”.

This information was procured by Sunbeam “for the pur-

pose of advancing” its business interest and ‘the informa- me

tion obtained was used by Sunbeam. See the record (R.

232):

8. See the Seismograph case, supra, the district court’s deci-

sion, page 349, column 2, last sentence of the first full paragraph:

“. .» Mason congratulated Bailey on his excellent work, and on

August 25, 1947, reported in full to ‘Hawkins on the action which

had been taken at the Patent Office to determine Hastings’ interest

in the Honore patent, and advised Hawkins that ‘The Honore patent

is definitely the patent in which they (Hastings) are interested’.”

“Q. You considered this information, of course, use-

ful to Sunbeam or you would not have obtained it, is

this true? .

A. What information is that, Mr. Fettis?

Q. The information you: employed Mr. Cumming to

obtain for you.

A. As to the commercialization or the allowance of

the patent, yes, I did.”

B. The Instructions a the District Court |

The Court of Appeals calls attention to the admoni-

tions contained in Dunn v. St. Louis-San Francisco Rail-

way, etc., 370 F.2d 682, 683 (10 Cir. 1966). The transcript

of the afternoon session of the trial on May 27, 1965, Vol.

VI, the material portions of which are in the record (R.

389-392) make it clear that the trial judge was thoroughly

aware of the objections of petitioner to the instructions in

question, thoroughly understood them, and did not give

them or any instructions directed at the theory of the law _

of petitioner reflected thereby. Please see. the record (R.

291):

“The Court: Well, go ahead. I I may say to you

with respect to this, your other. two instructions are

based on a different theory of the law than the court

has accepted.

Mr. Fettis: I am aware ‘of that,

The Court: And for that reason those two ob-

jections are overruled.”

See Instruction No. 4 (R. 390) a by petitidner and

not given, and as it applied to requested Instruction No.

2 (R: 103), these instructions incorporating by reference .

petitioner’s requested Instruction No. 1. (R. 103). These

requested instructions of petitioner are the ones to which

the trial judge referred, and about which he did not agree,

_because he did not accept the “theory of the law” of peti-

itioner based on the Restatement of Torts, supra, and the

Seismograph case, supra. The trial court was completely

aware of all this law, and. evidence of the activity of Sun--

beam in 1958 through its. skilled patent counsel and in-

vestigator. Such had been completely briefed and argued

to the trial Court by petitioner on motion for summary

judgment. Besides, Sunbeam agreed.to the procedure con-

cerning the prior objections to the instructions: of the trial

Court before the jury retired.’. Ma ee

The Court of Appeals, on page A7 of the decision, the

third full paragraph thereon, holds that the error alleged

by petitioner, because the trial court refused to give three

proposed instructions, could not have affected the jury’s

verdict. This is incorrect. The proposed Instructions No. —

2 and No. 4 of petitioner incorporated proposed Instruc-

tion No. 1 of petitioner. These requested instructions of

petitioner which were not given are as follows (R. 103

and 104): |

9. From the trial transcript, pages 782 and 783: “THE _

COURT: All right. Now let the record show that counsel have

just reviewed all of the instructions that the court intends to give.

I now inquire of counsel: Will you stipulate that any objections ‘ -

made as to the instructions which you have just reviewed may be

‘ considered as having been made after they are given and before

the jury has retired. The rules provide that you may make your

objections outside of the presence of the jury and may they be

considered as, therefore, by stipulation as being made now for that

time outside of the presence of the jury? .

MR. FETTIS: We will so stipulate that the objections we

are’ to give now shall be so treated.

MR. FOULSTON: The defendant so stipulates, Your Honor. °

THE COURT: All right. .

- The plaintiff may now interpose any objections that you have

, to the instructions,”

The record (R. 389-392) then continues the proceedings. =

“PLAINTIFF’S REQUESTED INSTRUCTION No. 1

In this case you are to determine the following

ultimate facts:

1. Was the disclosure made ey plaintiff to de-

fendant in 1957 in confidence?

2. Was the subject matter disclosed to defendant —

novel to it at the time?

3. Did defendant use anything so disclosed to it

in the Sunbeam Party Grill?

4. Did defendant, by improper means, obtain »

business information or trade secrets from plaintiff in

1958 and thereafter use the same?

PLAINTIFF’S REQUESTED INSTRUCTION No. 2.

You are to make a finding one way or the other

in regards to 1, 2, and 3 of the preceding instruction,

and if you find that the disclosure in 1957 was in con-

fidence, that what was disclosed was novel to the de-

fendant at the time, and that the defendant used in

its Party Grill anything which was novel to it and

so. disclosed by plaintiff, then you are to render a gen-

eral verdict in favor of the plaintiff.

| PLAINTIFF'S REQUESTED INSTRUCTION No. 4

You are instructed that if you find the defendant,”

Sunbeam Corporation did by use of improper means

-in 1958, after having prior knowledge of the Wilkin

Device, and before it marketed the Sunbeam Party

Grill, obtain from the plaintiff, business information

or trade. secrets relating to the Wilkin Device, then’

you shall render a general verdict for the. plaintiff _

-without regard to the issues as set forth in Instruc-

tion No. 2. You are further instructed that if you

have found a general verdict in favor of the duro

‘

oD °

a ema

under the issues given you in: Instruction No. 2 then

this instruction may be disregarded.

Seismograph Service Corporation v. Offshore Ray-

dist, Inc., 135 F. Supp. 342, 263 F.2d 5, 5 Cir. .

(1958). | |

' Colgate-Palmolive Company v. Carter ‘Products,

130 F. Supp. 557, 230 F.2d 855, 4 Cir. (1956).”

The important instruction on the “theory of law” which

the trial Court did not accept is the requested Instruction

No. 4. The trial Court did not give any instruction of this

nature at all. The theory of law of the trial Court is set

forth in Instruction No, 19 (R. 113 and 114), which was

the instruction to the jury setting forth only the issues of

(1) disclosure in confidence, (2) of something novel to

Sunbeam, and (3) use thereof by Sunbeam. The instruc-

* tion is completely silent as to the 1958 activity of Sun-

beam and “improper means”. Petitioner’s incorporated

proposed Instruction No. 1 referred to this in numbered

paragraph 4 as well. .The other three numbered para-

graphs in Instruction No. 1 set forth the elements cor-

responding to the Court’s Instruction No. 19.

Petitioner’s proposed Instruction No. 2 which was not

given referred to the first three numbered paragraphs, and

would have instructed the jury to give a verdict for pe-

titioner if the three (3) questions were answered ‘in the

affirmative. i, |

Petitioner’s proposed Instruction No, 4, ‘which was not

- given sets forth the theory of the law based on the Seismo-

graph case, supra, and the Restatement of Torts, supra,

_ as well as the other cases cited by petitioner, for example,

Tabor v. Hoffman, supra, and this is set forth in the first

sentence of proposed Instruction No. 4. Instruction No.

_. 4 was necessary because petitioner could prevail and gain

24 !

: ; .

relief on either theory of law, that is, the trial Court’s as

exhibited by the trial Court’s Instruction No. 19\to the

jury and the numbered paragraph elements 1, 2 and 3 of _

the petitioner’s proposed Instruction -No. 1, which was not

given, and that theory represented by petitioner’s \pro-

_ posed Instruction No.4. ¢

If petitioner had prevailed before the jury, and the

jury had found (1) disclosure in confidence in 1957, (2)

of something novel to Sunbeam and (3) use thereof -by

Sunbeam, then it would have been useless for the jury to

consider proposed Instruction No. 4 of petitioner, which

was not given, and the question of numbered paragraph

4 in proposed Instruction No. 1 of petitioner, which was

not given. Petitioner needed only to win once. That is

the import of the second and concluding sentence of the

proposed Instruction No. 4 of petitioner which was not.

given. A finding for petitioner under petitioner’s pro-

nullify and make unnecessary consideration -of petitioner’s

proposed Instruction No. 4. However, a finding’ for re- |

spondent under petitioner’s requested Instructions No. 2

and incorporated Instruction No. 1 would not make peti-

tioner’s requested Instruction No. 4 a nullity. The jury

could then have found a verdict for petitioner in view of -

the beginning and first sentence of Instruction No. 4, re-

_ flecting the theory of law as set forth in the Seismograph

case, supra, the Restatement of Torts,. supra, and all case

law which follows the Restatement of Torts. It is not true

as the Court of Appeals Says on page A8 of the decision,

“If a finding for one of the: parties would nullify the pro-

posed instruction, it must follow that an. adverse finding

in favor of the other party would also nullify the pro-

posed instruction.” That such is incorrect. is believed -

clear, without question, and it is believed that the Court -

should review in view thereof. . ; ee |

{/\——

The only instruction given by the trial court to the

jury which touched on the “improper means” activity of

the respondent in 1958 was Instruction No. 14, footnote 10 ve

on page A8 of the Court’s decision, and 'this does not reflect ~~

the correct law as urged on District Court. This in- 7

Struction merely states t it what Sunbeam did in 1958

can be considered along With all other facts and circum-

stances in determining “whether or riot plaintiff disclosed

something in confidence to the defendant”. Any, reason-.-

. able juror from this instruction had to believe that he had

to find that petitioner made a disclosure to respondent in

confidence sometime in order to be given relief. This is

not true. Further, Instruction *No. 14 is believed to be

incorrect from the standpoint that it would convey an im-

pression to a reasonable juror other than what was right

and/or intended, or represented by correct law. It reads

that the jury must find that Sunbeam had to be found to

employ “improper means” in 1958 before the jury could

consider what happened -in 1958 to determine “whether

‘or not plaintiff disclosed something in. confidence to de-

- fendant”. Certainly, the activity of Sunbeam in 1958 could

be considered by the jury. irrespective of whether or not

the jury found the activity. to be “improper means” or

not. Instruction No. 14 was’ faulty in two principal as- ‘

pects. It denied petitioner an Opportunity for a verdict a

in view of the law of the Seismograph case, supra, the Re- °

statement of Torts, supra, and all. the case law following

_the Restatement. In addition, it perhaps took from peti-

tioner the right to have the jury consider the activity of

Sunbeam in 1958 at all, again against correct law. |

_C. Misunderstanding by the Court of Appeals

On page A3 of the decision, third paragraph, ‘the Court

states, “Appellee obtained the services of an investigator _

to determine the’ status of appellant’s patent application.

. 26 4

...” (Emphasis added). It is important that the status

_ of petitioner’s patent application determined was “what

claims have been allowed by the Patent Office.” (PX 8-R.

399, PX 11-R. 401, and R.:221). With regard to the es-

sential elements which petitioner is required to establish

‘for proof for relief on one theory, this indisputable ‘evi-

’ dence points all one way and. is susceptible of no reason-

able inferences which sustain the position of respondent,

in regard to the elements of (1) novelty to the respondent

and (2) use by respondent. The points made by peti-..

tioner relative patent application claim allowance are that

' the activity by skilled patent persons acting for respond-

s ent is évidence which points all.one way and is susceptible

of no reasonable inferences otherwise, that what was dis-

closed by petitioner to respondent was so novel to re-

spondent that the respondent considered it possible that

petitioner might have obtained a claim. covering such in

the patent application; and such activity by such. skilled

‘patent personnel of respondent is conclusive evidence

which points all one way and is susceptible of no reason-

“\able inferences otherwise, that respondent had embarked

upon a project to. manufacture and distribute. an electric

party grill, which accomplished many of the same results

as petitioner’s device which therebefore had been dis- .

closed and demonstrated to respondent, and that respond-

ent thought @ patent claim might have been allowed to

petitioner in the patent application which would read on

the electric party grill of petitioner, which is conclusive of

use by petitioner.

In the same paragraph on page’ A3 of the decision the

Court of Appeals finds, “The investigator used a registered

assumed name, indicated he was personally interested, and

'. that he had an undisclosed principal ‘who was interested”.

(Emphasis added). Interested is not believed a fair way

meena ceecemammmmaaamaaaaamacaaaaeaaaaaacammaaaaacammmmmammmmaamcaael

. 27 ‘

to put it. The Court apparently overlooked that the in-

vestigator held out to petitioner, “I might even be in-

terested in buying the patent application” (PX 10-R. 400,

and PX 8-R. 399), when respondent had no such inten-

tion. Please see the record (R. 290),-specifically the fol-

- lowing: Pe,

; “Q. What do you mean: ‘arousing her hopes,’ Mr. |

Rose? . | : |

y: A. By making her think I was interested in pur-

chasing her patent application. J

Q. Which you certainly were not?

A. That is correct.” |

This was -flagrant and willful misrepresentation.on the

_ part of the respondent to the petitioner, on which the pe-.

titioner relied to her detriment. Certainly, this is not,

“Permissible under New York Statutes” by anyone, es-

pecially an investigator acting “without disclosing his con-

nections with appellee”. ;

_ The Court on page A3 of the decision, last paragraph,

sets forth that, “The cases relied upon by appellant in her

brief each involvéd' the infringement of patents.” The

very first case cited:in the brief of petitioner under “RE-_

MARKS AND THE LAW”, and one of the leading cases

in this field of the law, did not involve infringement of _

patents. The case is Tabor v. Hoffman, 118 N.Y. 30,23 NE. -

12, and at page 13 is the following: alte 7

4: | The plaintiff's patent had expired, and all of

the parts of the pump represented by the patterns

had been Yor a long time on sale in the form of a com- |

pleted pump. . . .” (Emphasis added).

_ Relative the mistaken analysis of the cases cited by

petitioner as reflected by- the Court’s statement in the -

last paragraph on page A3 and the Tabor v. Hoffman case,

‘supra, it is believed that-the law applicable to the case at.

hand needs review by the Court. The footnote 4 reference

to Walker on Patents additionally indicates that infringe-

ment of the patent must be involved. This.is not true.

The novelty to the respondent need not be patentable nov-

elty.

In addition to Tabor v. Hoffman, supra, please see the

leading case of “Smith v. Dravo Corp., (C. A. 7th, ae

203 F.2d 369, 373:

‘We assume that almost any uadedas or information

used in the conduct of one’s business miay be held ‘by —

its possessor in secret. International. Industries _ v.

Warren Petroleum Corp., D.C. Del., 99 F. Supp. 907; Re-

statement, Torts, Sec. 757 (b) (1939). Of course, as

the term demands, the knowledge cannot be placed

in the public domain and still be retained as a “se-

~~~. cret”, Thus, plaintiffs would not be permitted to copy

‘the. design of a known device and claim that the copies

are their secret. That which has become public prop-

erty cannot be recalled to privacy. However, this does.

a not mean that the product must reach the stature of in-

| vention. Shellmar Products Co. v. Allen-Qualley Co., 7

| . Cir., 36 F.2d 623; Booth v. Stutz Motor Car Co., 7 Cir., 56

| F. 2d 962; A..O, Smith Corp. v. Petroleum Iron Works

| Co., 6 Cir., 73 F.2d 531. All that is required is that the

| information or knowledge represent in some consider-

| able degree the independent efforts of its claimant. .

_ (Emphasis added).

In the recent decision of Imperial Chemical Industries,

"Limited v. National Distillers and Chemical Corporation,

(C.A. 2d, 1965) 342 F.2d 737, the Court reiterated the gen-

eral rule at page 742: °

not remove this trade secret case from the operation

of thegeneral principle that a trade secret can exist

in a combination of characteristics ‘and components,

. Properly read and applied. these provisions do -

hi a cota |

29...

each of which, by itself, is in the public domain, but

the unified process, design and operation of which, in

unique combination, affords a competitive ‘advantage

and is a protectible secret... .’ .

The Court continued at page 743: —

‘It is -no defense in an action of this kind that the -

process in question could have been developed inde- _

- pendently, without resort to information gleaned from

the confidential relationship. . . .’ |

‘Although the court went on to say that anyone ‘is at

liberty to discover the secret and use it thereafter with —

‘impunity, that fact does not excuse the obtaining of

a secret by improper means or the inequitable use’ of

‘the same.’ ” “

Also see the Restatement of Torts, supra,1°

Re the last two (2) paragraphs on page A4 of the de-

; cision, the three (3) “essential elements” required to es-

tablish a right to relief by petitioner, set forth in the first

paragraph, were not.recognized as the basic issues at all

Stages of the trial. The statement by the Court in the

first sentence of paragraph 2 is incorrect. Please see the

final pretrial order. (R. 87). :

“It is therefore obvious that the issues to be tried are:

1: Whether anything was disclosed in confidence

by. plaintiff to defendant; |

2. Whether what was disclosed was novel to de-

fendant; and - _

ae, 3. Whether defendant used anything disclosed to |

; it by plaintiff in the Sunbeam Party Grill.’ (Empha-

sis added). ; : : Be

* * 8

“Plaintiff has filed an amendment complaint and ~

‘issue has been joined thereon. It -was, and is, plain-

tiff’s contention that a new issue of law has arisen

therefrom which issue was brought to the Court’s at-

tention by a motion for summary judgment which

was overruled by the Court. - The plaintiff still con-

tends that an additional issue to those set forth here-

inabove exists:

| 4. Whether the defendant by employing im-

proper means in September and/or October, 1958, ob-

tained from the plaintiff business information or trade

secrets; if such finding results, then issues 1, 2 and 3

shall be thereby resolved in favor of the plaintiff.” |

Both respondent and petitioner have recognized through-

out that petitioner need only establish that what was dis- .

closed was novel to defendant (respondent). Petitioner

has maintained since finding out during discovery in prose-

cuting the ldwsuit of the activity of the: investigator. in

September and/or October, 1958, that she need not prove -

any disclosure in confidence to respondent to prevail, In

September and/or October, 1958, petitioner disclosed trade

secrets and information concerning trade secrets to a man

using an alias who did not disclose respondent as his prin-

cipal. How can petitioner be held to be required to prove i

a ‘disclosure in confidence to respondent in regard to what

happened in September and/or October, 1958, when at

‘such time petitioner did not make a disclosure at all to

respondent? This is what is recognized in the Restate- —

ment of Torts, Section 757: )

sppesescnaennennmneesaenasnsts

ms’.

“One who discloses or uses another’s trade secret

without being privileged to do so, is liable to the other

(a) He discovered the secret by improper means.”

This does not say anything about a disclosure in confi-

dence. The only elements in question necessary for re-

lief are use, novelty and obtaining by improper means.

The three (3) issues. listed by numbered paragraph ‘in

the final pre-trial order (R. 87) were issues in the law-

suit from the beginning, and were set.forth in the first

pre-trial order. (R. 14). However, these three (3) issues

pertained only to the lawsuit as originally filed and the

disclosure by petitioner to respondent in 1957, whereat

Sunbeam obtained information by proper means. The

contentions of petitioner, which are before the Court, arose.

during discovery, when the surreptitious activity of Sun-

beam in 1958 was uncovered. Petitioner could have pre-

vailed on the three (3) numbered paragraph listed issues,

if the jury had found them in favor of petitioner, which

they did not. The jury was never instructed so as to be

- ° given an opportunity to find for petitioner on the conten-

° tions of petitioner as a result of the 1958 activity of re-

_ spondent. It was and is the contention of petitioner that

the indisputed evidence of the activity of Sunbeam in 1958

goes to the degree and question of proof required by pe-

is required to establish as a prerequisite to a right to re-

lief. Further, what happened in 1958 alone makes Sun-

beam liable to petitioner as a matter of correct ‘law. The

1958 orientated indisputable evidence points all one way

and is susceptible of no.reasonable inferences which sus-

tain the position of Sunbeam. The only answer Sunbeam

has to the inferences of novelty to and use by Sunbeam

arising from surreptitiously obtaining in 1958 from the pe-

_ 82.

, titioner that no claims had been allowed in the pending

patent application is that “some patent examiner had gone

astray”. Please see R. 224.

“Cross-Examination by Mr. Foulston

Q. . One question, Mr: Rose. You had in your

own mind already reached the conclusion, had you

there was anything patentable there or not?

Mr. Fettis: Just a moment. I will object to this

as being beyond the scope of the diréct.

Mr. Foulston: He inquired of him, Your Honor,

as to why he had Mr. Cumming.

- The Court: I will overrule your objection. He

may answer.

A. Iwas convinced that there was nothing patent-

able in the Wilkin application and the basic reason for

my inquiry was just on the chance that some patent |

examiner had gone astray and had — some

claims.” (Emphasis added).

Such a shallow reason is no evidence at all to elie the

position of Sunbeam. It might just as well have taken

the position that it desired to find out as a matter of

curiosity.

+ Also, in the last ovine « of page A4 of the de- —

cision the Court of Appeals states, “She (appellant) main-

tains. the acquisition of readily obtainable information. en-

titled her to relief if acquired by ‘deception, misrepre-

sentation, and concealment.’” (Emphasis added). The

information obtained by Sunbeam in 1958 was not readily

obtainable. This information obtained in 1958 by the hired

investigator while not disclosing the principal Sunbeam

was the fact that the patent application of petitioner ‘was

still pending in the United States Patent Office. (PX 11-R.

401). The fact that no claims had been allowed to pe-

33°

titioner in the application at that time. (PX 11-R. 401).

' The fact that petitioner had not’ been successful in com-

mercially exploiting the Wilkin Device. (PX 11-R. 401).

_ The fact that a working model of the Wilkin Device was

in existence and available to be demonstrated. (PX 13 and

_ 17-R. 403 and 405). Also, Sunbeam obtained a copy of

the pending patent application of petitioner, the written

specification and drawings; the same as they were given

in 1957." The copy of the written specification and draw-

ings of the then pending patent application described and

depicted the Wilkin Device. (PX 11-R. 401). None of the

information listed hereinbefore was “readily obtainable in-

. formation”. All of it was solely in the possession of pe-

titioner. and/or her attorney... None of the information

was public information.”

The Court of Appeals misunderstood petitioner’s cause

of action. See page A8 of the opinion. Petitioner has never

had more than one cause of action against respondent. .

The civil action of petitioner is a tort. What is the scope

of the tort civil action? Like any tort petitioner had

a right. Respondent had a duty. Respondent breached

_ that,duty. Petitioner suffered damage. The right of pe-.

tion concerning same which was not public and held in

11. The investigator Mr. “Cumming wrote, “I do not khow

exactly how it works and would be interested in obtaining a

photograph of it or some descriptive matter on this cooker if pos-

sible.” (PX 8-R. 399).

_ 12. Section 122 of Title 35, United: States Code, provides:

“Applications for patents shall be kept in confidence by the Patent

Office and no information concerning the same ‘given without au-

thority of the applicant or owner unless necessary to carry out the

provisions of any Act of Congress or in such special circumstances

as may be determined by the Commissioner.” (Emphasis added).

confidence. The duty of respondent was to respect that

right, and not use “improper means” to obtain ‘it or con-

- fidential information concerning it, and use such. Re

spondent breached its duty to petitioner by its “improper

means” activity through the skilled patent counsel and

investigator in 1958 -in obtaining it and confidential busi-

ness information of petitioner, and using such. It is ad-

mitted. both by petitioner and respondent that petitioner

has suffered damage, the. amount to be determined subse-

quently in an accounting procedure, if respondent is found

liable. Petitioner had only one’ Wilkin Device and. all

The activity of respondent in 1958 was first discovered by

petitioner during deposition discovery proceedings in the

litigation. The facts of the activity .existed long prior to

the filing of the complaint by petitioner. The facts of the

activity of respondent in 1958 were not and could not have

been discovered before. The applicability of the 1958 ac-

tivity of respondent goes only to the proof required of

petitioner under the law to make the respondent liable.

THE PRAYER

Wherefore, petitioner prays that a writ of certiorari

_ issue under .the’ seal of this Court, directed to the United

States Court of Appeals for the Tenth Circuit, command-

" ing same to certify and send to this Court a full and com-

plete transcript of the proceedings had in the case num-

bered and entitled on its docket No. 8504, Kathleen K.

Wilkin, Appellant, v.’ Sunbeam Corporation, Appellee, so

that this cause may be reviewed and determined by this

Court as provided for by statutes of the United States, and

‘that the judgment of the said United States ‘Court of Ap-

. 35

peals for the Tenth Circuit be reversed by this Court, and |

for such other relief as to this Court may seem proper.

Everett C: Fetris

Rosert C. ALLAN

One Twenty Building

Wichita, Kansas 67202

and

' JoHN H. Wippowson

306 Bitting Building

Wichita, Kansas 67202

and

Dae M. Sruckxy

~ 1600 Wichita Plaza Baliding

P. O. Box 997 2,

Wichita, Kansas 67202

Attorneys for Petitioner

eee een vl

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.