Petition for a Writ of Certiorari — Hyman v. Velsicol Corp.

Page

eas patente Web Rtn RO OND CAREER 2

SJORISDICTION «1. wees eee eee cree ee ee eee cceecees 2

QraTEMENT OF THE CASE... +--+ se eee ee eesereeeeces 3

Qrmion oF THE SuPREME CouRT OF TRAAMONE oo ccs ens oe 6

QUESTIONS PRESENTED . 00. occ cece cree cree cceccocces 7

‘Bassons For GRantiInG THE WRIT... ...--0+0eeeee0es 8

“Buer 1x Support oF PETITION .... --- ++ +e eee eee reese 9

I. The Importance of the Patent Questions Pre-

sented and The Improbability of Conflict ...... 9

Il. The Court Below Improperly Usurped The Jur-

isdiction of the Patent Office and the Federal

Courts to Enable Respondent to Perpetrate a

Fraud Against the Patent Laws and the Public 10

[IL The Court Below Gave Further Effect to Its

Usurpation of Exclusive Federal Jurisdiction

By Ordering Assignment of Void Patent Appli-

NE og nwins ade ee RwA RES be 5 SkS ERATE Oe 0 13

IV. The Injunction Below Restraining Petitioner

From Using or Disclosing ‘‘1068’’ or Any Other

Process, Formula, Method or Product Discov-

ered By or Made Known to Petitioner While in

Respondent’s Employ Unconstitutionally De-

prives Petitioner of His Right To Practice His

Trade and Is Contrary to Public “ olicy ....... 14

| QONCLUSION .... -- essere eect teen rete sete teeeeeees 16

4 TABLE OF AUTHORITIES.

Cases:

Allgeyer v. Louisiana, 165 U. S. 578 ...........+-. 14

American Dirigold Corp. v. Dirigold Metals Corp.,

125 F(2d) 446 (6th Cir., 1942) .........-----0ee

Anderson v. Carkins, 135 U. S. 483 ..........-4-. 10, 11

Andrews v. Hovey, 123 U. S. 267 .........-.+-+++5- 12

Index Continued.

Page

Atlantic Works v. Brady, 107 U.S. 192 ............ ll

Ex Parte Benes (1925) C.D. 75; 399 O.G. 499 ...... 12

Dalzell v. Dueber Watch-Case Mfg. Co., 149 U. 8.315 14

Di Filippis v. Chrysler Corp., 53 F. Supp. 977

CRs RE 6k kh heen vee adie bs bea eaes ee ke 14

DuPont de Nemours Powder Co. v. Masland, 244 U. §.

FOP nr ere hogy ey rE err eye tec 14

Ferris v. Frohman, 223 U. &S. 424 2.0... 0s cccescces li

General Electric Co. v. Wabash Appliance Corp., 304

8 RRR er ea pr oe iee e reannntec 12

Illinois C. R. Co. v. McKendree, 203 U.S. 514 ...... 10

International Tooth-Crown Co. v. Gaylord, 140 U. S.

Sa cin a5 6 hah Sen es ee ian Oe dana eee eke 12

Kellogg Co. v. National Biscuit Co., 305 U.S. 111.. 12

Kennedy v. Hazelton, 128 U. S. 667 ............... 13

Muncie Gear Works v. Outboard Marine & Mfg. Co.,

kN SPOOR errr rrr rer. 9, 10, 13

ke eee ere 10, 11

Reynolds Metals Co. v. Skinner, 166 F(2d) 66 (6th

a as ks bo caes Pinew sh hashes anced keaas 15

St. Louis I.M. and S.R. Co. v. Starbird, 243 U.S. 592 i

Schriber-Schroth Co. v. Cleveland Trust Co., 305

WE 6s Gc hea xs ka a eon tO vaaacasead 9

Scott Paper Co. v. Marcalus Mfg. Co., 326 U. S. 249 16

Shreckhise v. Ritchie, 160 F(2d) 593 (4th Cir., 1947) 11

Singer Mfg. Co. v. June Mfg. Co., 163 U.S. 169.... 12

Smith and Griggs Mfg. Co. v. Sprague, 123 U.S. 249 12

Geeith ¥.. Temas, 303 VU. BH. GOD... oc ceccccesscteness 14

Smoley v. New Jersey Zinc Co., 24 F. Supp. 294 (D.

ek Ek oe AS SSAA TS Re ease kee bee 14

Sola Electric Co. v. Jefferson Electric Co., 317 U. S.

he Ub wercrakesubekieeesawke tan auiten wen 11

Sylvester v. State of Washington, 215 U.S. 80...... 10

Statutes:

gm ei mS Pere 2

ie Ae? PererTTTtrrTrrTcrieT ci 12

IN THE

Supreme Court of the Anited States

Octoser TERM, 1949.

No.

Jutius Hyman, Petitioner,

Ve

Vetsico, Corporation, Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

SUPREME COURT OF ILLINOIS AND BRIEF

IN SUPPORT.

To the Honorable, The Chief Justice of The United States,

and to The Associate Justices of The Supreme Court of

The United States:

Julius Hyman, hereinafter called Petitioner, respect-

fully petitions that a writ of certiorari be issued to review

the judgment of the Supreme Court of the State of Illinois,

which reversed a judgment of the Appellate Court of the

State of Illinois, First District, which in turn reversed a

decree of the Superior Court of Cook County. This decree

ordered Petitioner to assign and transfer to Respondent

certain applications for United States Letters Patent, en-

2

joined Petitioner from using or disclosing the processes

covered by these applications, and from using or disclosing

any processes, formulas, products, methods, or techniques

discovered by or made known to Petitioner while he was in

the employ of Respondent.

OPINIONS BELOW.

The opinion of the Supreme Court of Illinois appears in

the record. (R. 285). It has not as yet been officially re-

ported. The opinion of the Appellate Court of Illinois ap-

pears in the record (R. 261) and is officially reported (338

Ill. App. 52). The decree of the Superior Court appears in

the record (R. 81) and the Trial Court’s written pronounce-

ment overruling exceptions to the master’s report appears

in the record. (R. 84). These were not officially reported.

JURISDICTION.

This proceeding, for a mandatory and a prohibitory in-

junction, was filed in the Superior Court, Cook County, on

October 15, 1946. (R.1). It requested the relief granted

by the master and the Superior Court. The judgment of

the Appellate Court of Illinois reversing the decree of the

Superior Court and directing dismissal of the complaint

for want of equity was entered on June 20, 1949. (R. 259).

Respondent filed a petition for leave to appeal which was

allowed by the Supreme Court of Illinois on September 15,

1949. (R. 283). After entry of the judgment of the Su-

preme Court of Illinois, on February 11, 1950, and within

the time allowed therefor, Petitioner filed a petition for re-

hearing (R. 301) which was denied on March 20, 1950. (R.

327). On March 22, 1950, the Supreme Court of Illinois or-

dered a stay of its mandate for a period of thirty days pend-

ing disposition of this petition for writ of certiorari in the

United States Supreme Court. (R. 328). Jurisdiction of

this Honorable Court is invoked under 28 U.S.C. § 1257,

Subdivision 3.

3

STATEMENT OF THE CASE.

This suit involves four patent applications filed in Pe-

titioner’s name as inventor and now pending in the United

States Patent Office of a value of $4 to $5 million. They

include an insecticide which has been found to be the best

for grasshopper control in the world. (R. 243-4, 294). It

is many times more potent than DDT. (R. 138, 146).

The suit seeks a mandatory injunction requiring Peti-

tioner to assign the applications to Respondent, and a pro-

hibitory injunction perpetually restraining Petitioner from

using or disclosing the processes covered by the applica-

tions to anyone other than Respondent, and from using or

revealing any other process, formula, method or product

discovered by Petitioner or disclosed to him while in Re-

spondent’s employ. (R. 1).

The Illinois Supreme Court found as facts that the pat-

ent applications are void. It ordered the full relief as

prayed for and directed Petitioner to assign the applica-

tions to Respondent. (R. 285).

As a practical result of this holding, the insecticide in

question may be manufactured only in Illinois, where Re-

spondent’s plant is located. (R. 6, 7).

Petitioner is a chemist with extensive training. (R.

100-1). In 1930 he believed that he had two patentable

ideas relating to petroleum polymers, a by-product of gaso-

line refining (R. 102-3) and estimated that $100,000 would

be required to finance the venture.

As a result of negotiations with a cousin, one Joseph

Regenstein who financed the venture, Respondent company

was formed in 1931 to exploit, manufacture and sell Peti-

tioner’s two ideas which were later patented. Respondent

corporation was capitalized at $20,000. Petitioner re-

ceived 20% of the stock in return for the assignment to

Respondent of his two polymer patent applications. Peti-

tioner was informed that his salary was to be $40 a week.

(R. 104, 227, 231).

2 CO

4

At the meeting at which the corporation was formed, one

of Regenstein’s attorneys asked Petitioner to sign a patent

assignment agreement relating to future inventions. Petj-

tioner refused stating that the determination that the com.

pany was to have only a $20,000 capitalization, that he was

to receive only 20% of the stock and a salary of only $40

per week, made him unwilling to assign future inventions,

(R. 116, 228, 231, 232).

The purpose of the formation of the corporation was re-

stricted to the exploitatior of the original two patent appli-

cations. (R. 150,179). Respondent’s principal witness, a

director and officer of the Company so testified. (R. 179).

The company was entirely managed by Petitioner and

Regenstein, Hyman carrying on the day-to-day manage.

ment.

By 1943 Respondent corporation was a profitable ven-

ture. Net profits of about $300,000 before taxes were real-

ized. (R. 226).

Up until 1943, Petitioner made a number of additional

inventions in the field of petroleum polymers, many of

which were used by the company... (R. 235). As Petitioner

filed patent applications, he assigned them to the company.

He testified that he did so not because of any legal obliga-

tion but because of his desire to make the venture a success,

(R. 123, 234).

In the fall of 1943, because of Respondent’s then assured

success, Petitioner told Regenstein he would no longer as-

sign inventions to the company unless some adjustment was

made for his increased participation. (R. 123, 234),

Regenstein said that something would be worked out to

Petitioner’s satisfaction. (R. 79). Petitioner then made

additional assignments to Respondent. (R. 124, 204).

Nothing was done to increase Petitioner’s participation.

(R. 125, 139, 267).

During the following year, 1944, Petitioner assigned and

directed certain research work to three chemists employed

by Respondent under Petitioner’s direction. A product was

a eee

5

evolved known as ‘‘237’’, its laboratory number. (R. 135,

902, 210). It was recognized that it was probably an effi-

cient insecticide. Two patent applications were filed and

signed by the three chemist employees. They were as-

signed to Respondent. (R. 199, 210).

Testing of ‘‘237’’ showed that it was too volatile for

practical purposes. Petitioner directed further experi-

ments. (R. 136-8, 253). A formula known as ‘‘1068’’ was

evolved which proved practical. Four applications includ-

ing ‘1068’ were filed in Petitioner’s name, the last of

these on February 16, 1946. (R. 137, 140-1, 197,199). Ap-

plications were also filed in foreign countries. (R. 16, 18).

Foreign patents have issued in 1946 and 1947.

These four applications are the subject matter of this

suit. The Supreme Court of Illinois found that they did

not cover an invention of Petitioner, stating:

‘‘We believe the record fairly establishes that a num-

ber of chemists employed by appellant, including ap-

pellee, had part in discovering or inventing the com-

ponent parts of 1068 and other insecticides through

laboratory tests and experiments conducted by appel-

lant, and that 1068 cannot be said to result exclusively

through the brain of appellee.’? (R. 294)

Respondent has marketed ‘‘1068’’ which has been in use

by the public since 1946. (R. 18, 142, 144, 172).

Respondent demanded that Petitioner assign to it the ap-

plications covering ‘‘1068’’. Petitioner refused contend-

ing that he was under no obligation to do so (R. 144-5) and

would not unless the promise to increase his participation

was kept. (R. 217, 238). On September 13, 1946, Peti-

tioner resigned from the company at Regenstein’s request.

On October 15, 1946, this suit was filed. In one count

of the complaint, Respondent relied upon a purported writ-

ten agreement signed by Petitioner to the effect that he

would assign all future patents to the company. In the

other, it relied upon the facts and relationship of the par-

ties as constituting the right to the relief sought. (Opin-

a |

6

ion, R. 291). All of the allegations of the complaint were

sworn to except the allegation that Petitioner had execute

such an alleged written agreement. This was stated on

‘*information and belief’’. (R. 10, 20).

This was the first time in the controversy that anyone

charged that Petitioner entered into such an agreement,

(R. 238). Respondent’s witnesses admitted that they never

saw Petitioner sign such an agreement, but they claimed

they had seen such a document in Respondent’s files. (R.

70, 171, 189).

The ordinary employees of Respondent did sign secrecy

agreements. (R.290). The top officers, such as Petitioner,

did not. (R. 172, 186). Nowhere in the minutes of Respon-

dent corporation is reference made to a secrecy agreement

signed by Petitioner. (R. 176).

On February 26, 1947, an official publication of the United

States Department of Agriculture carried a complete de-

scription of the structural and empirical formula for

‘**1068’’.. This publication is attached hereto as Exhibit

66 A?

THE OPINION OF THE SUPREME COURT OF

ILLINOIS.

The Supreme Court of the State of Illinois granted the

relief prayed for in Respondent’s complaint. It ordered

an assignment of the patent applications for ‘‘1068’’ which

it had found to be void. It enjoined Petitioner perpetually

from using or disclosing processes, formulas, methods or

products covered by the applications for ‘‘1068”’ although

there had already been public disclosure, use and sale of the

product. It enjoined Petitioner perpetually from using or

disclosing any process, formulas, method or products in-

vented or made known to Petitioner during his employment

by Respondent.

This sweeping injunction was ordered without regard

to whether any of these processes were known to the public.

Since Petitioner’s experience for the past 15 years had been

-

in Respondent’s employ, the injunction prevents him from

effectively engaging in his profession as a chemist and

destroys the career of a scientist of admitted ability.

The Supreme Court of Illinois in ordering the relief as

prayed for did so on the finding that there was a secrecy

agreement as alleged on information and belief. This find-

ing was made in spite of the facts that the alleged agree-

ment was not produced; the alleged attesting witnesses

were not called by Respondent; no one testified that he had

seen Petitioner sign such an agreement.

The Court below also inferred a confidential relationship

between the parties which dictated the relief sought in spite

of the fact that there had already been full public disclo-

sure, use, and sale of ‘‘1068’’ and in spite of the fact that ;

the Court found the patent invalid.

This holding effectively insulates Respondent from com-

petition in manufacturing and marketing this important

and valuable insecticide. Petitioner is obviously the only

present competitive threat. Yet he is enjoined from com-

peting in the marketing of a product already disclosed to

the public and on which patent applications have been

found void. The effect of the Supreme Court of Illinois

holding is to render ‘‘1068’’ a duly patented process as to

Petitioner alone while deciding that as to the rest of the

world it is a free and open process. It is permitting Re-

spondent to perpetrate a fraud on the federal patent laws

and the public.

QUESTIONS PRESENTED.

1. Whether a state court, having found a patent applica-

tion pending in the United States Patent Office void, may

order an assignment of the application, thereby enabling

a manufacturer to perpetrate a fraud against the federal

patent laws and the public.

2. Whether, under color of the federal patent laws, a

state court may insulate a corporation against competition

from a former employee in the manufacture and sale of an

unpatentable product the process for which has been made

public.

8

3. Whether a state court may deprive a man of his right

freely to engage in his profession and thereby, contrary to

the public interest, insulate a corporation from competition

in the manufacture and sale of any of its formulas, proc-

esses, methods, or products regardless of whether they have

been either disclosed to the public or patented.

4. Whether a state court may usurp the exclusive juris-

diction of the United States Patent Office and the federal

courts to declare a patent application invalid.

REASONS FOR GRANTING THE WRIT.

1. The applications under consideration are valued at

$4 to $5 million. They cover an insecticide many times more

efficient than DDT and one of the most efficient now known.

It has already been determined the most effective for grass-

hopper control. The Court below has insulated Respondent

from competition in its manufacture and sale. Conflict on

the questions presented under the federal patent laws is

unlikely.

2. The Court below usurped the exclusive jurisdiction of

the United States Patent Office and the federal courts to

find the subject patent applications void. The holding en-

abled Respondent to insulate itself from competition and

perpetrate a fraud against the federal patent laws and the

public.

3. The Court below usurped the exclusive jurisdiction of

the United States Patent Office and the federal courts to

declare the subject patent applications void, and gave effect

to this determination by ordering them assigned to Respon-

dent.

4. The Court below deprived Petitioner of the constitu-

tional right to engage freely in his profession. It did so by

enjoining him from using or disclosing the subject matter

9

of the patent applications in question or any other processes

made known to him while in the employ of Respondent with

no regard as to whether any of the processes were a mat-

ter of public knowledge or patented.

5. In ordering the relief granted, the Court below has de-

cided federal and constitutional questions of substance con-

trary to applicable decisions of this Honorable Court and

contrary to the public policy of free and competitive access

to technological skills and ‘‘know-how”.

BRIEF IN SUPPORT OF PETITION.

IL. The Importance of the Patent Questions Presented and

the Improbability of Conflict.

It has been stated that the process under consideration

is valued at $4 to $5 million, is many times more efficient

than DDT, and is the most effective insecticide for grass-

hopper control. The Court below has prevented competi-

tion with Respondent’s Illinois concern. Conflict on the

questions presented under the federal patent laws is im-

probable.

Precedent for granting the writ is found in at least two

eases. In Muncie Gear Works v. Outboard Marine and

Mfg. Co., 315 U. S. 759, 766, it was said:

‘‘ | we granted certiorari in view of the questions

presented and because the patent dominates a substan-

tial portion of the industry so concentrated in the Sev-

enth Cireuit that litigation in other circuits, resulting

in a conflict of decisions is unlikely.’’

Similarly in Schriber-Schroth Co. v. Cleveland Trust Co.,

305 U. S. 47, at 50, the Court said:

‘‘We later granted certiorari . . . notwithstanding the

doubtful validity of the patents, litigation elsewhere

with a resulting conflict of decision was improbable be-

cause of the concentration of the automobile industry

in the Sixth Circuit.’’

po

10

Furthermore, this Court will not be limited even where

the federal questions were not sharply articulated below,

As was stated in the Muncie Gear Works case, supra, at

768 :

‘*We think the conclusion is inescapable that there was

public use, or sale, of devices embodying the asserted

invention, more than two years before it was first pre-

sented to the Patent Office. We are not foreclosed from

a decision under Section 4886 on the point by the ob-

security of its presentation in the courts below. This

issue has been fully presented to this Court by the peti-

tion for a writ of certiorari and in subsequent briefs

and argument; and there is not the slightest indica-

tion that respondents have been prejudiced by such

obscurity. To sustain the claims in question upon the

established and admitted facts would require a plain

disregard of the public interest sought to be safe.

guarded by the patent statutes, and so frequently pres-

ent but so seldom adequately represented in patent

litigation.’’

II. The Court Below Improperly Usurped the Jurisdiction

of the Patent Office and the Federal Courts to Enable

Respondent to Perpetrate a Fraud Against the Patent

Laws and the Public.

That the determination of patent questions rests solely

in the jurisdiction of the United States Patent Office and

the federal courts needs no citation of authority.

When a state court invades such exclusive federal juris-

diction and gives effect to the invasion by enabling a liti-

gant to achieve an imposition on the public contrary to fed-

eral law, this Honorable Court has exercised its jurisdic-

tion. In the following cases, this Honorable Court has re-

viewed decisions of state courts to avoid a result contrary

to federal policy. There are many others:

Anderson v. Carkins, 135 U. S. 483

Nutt v. Knut, 200 U. 8. 13

Illinois C. R. Co. v. McKendree, 203 U. 8. 514

Sylvester v. State of Washington, 215 U. S. 80

11

Ferris v. Frohman, 223 U.S. 424

St. Louis I. M. and S. R. Co. v. Starbird, 243 U. S.

592

Cf. Sola Electric Co. v. Jefferson Electric Co., 317

U. S. 173, involving the federal patent statutes.

In the Nutt case, supra, 200 U. S. at 18, the Court said:

‘‘A party who insists that a judgment cannot be ren-

dered against him consistently with the statutes of the

United States may be fairly held, ... to assert a right

and immunity under such statutes, although the stat-

utes may not give the party himself a personal or af-

firmative right that could be enforced by direct suit

against his adversary. Such has been the view taken

in many cases where the authority of this court to re-

view the final judgment of the state courts was in-

volved.”’

In the Anderson case, supra, 135 U. S. at 485:

‘‘Hence the jurisdiction of this court cannot be doubted.

Murdock v. Memphis, 20 Wall. 590. It is immaterial

that the state court considered the case to be within

the provisions of certain state statutes. The grasp of

the federal statute must first be released. The con-

struction and scope of that are federal questions . . .”’

The holding below has reached a result contrary to fed-

eral law and policy. The Court found that Petitioner did

not invent ‘«1068’’. It was the invention of ‘‘a number of

chemists’’. A patent issued to one person when in fact the

process was invented by more is void. Atlantic Works v.

Brady, 107 U. S. 192. The rule was stated in Shreckhise

v. Ritchie, 160 F. (2d) 593 (4th Cir. 1947) at 599:

‘Tt is well settled that... patents can be granted only

to the true inventors of the invention and must be is-

sued in the name of all of the inventors; ... when a

patent is issued to one person for something which was

jointly invented by several the patent is invalid.’’

There has been public disclosure, use and sale of **1068”’

for more than one year. The statute of limitations has

12

run against the various inventors to make joint applica.

tion. The statute reads in part (35 U.S.C. § 31):

‘‘A person who has invented or discovered any new

and useful art . . . not in public use or on sale in this

country for more than one year prior to his applica-

tion... may... obtain a patent therefor.”’

Disclosure and public use and sale for longer than the

statutory period consists in:

1. The publication of the structural and empirical for-

mula in Exhibit ‘‘A’’;

2. Public use and sale since 1946;

3. Applications requiring the fullest description filed

here and abroad in 1945 and 1946;

4. Issuing of foreign patents in 1946 and 1947.

Smith and Griggs Mfg. Co. v. Sprague, 123 U.S. 249

Andrews v. Hovey, 123 U. 8. 267

International Tooth-Crown Co. v. Gaylord, 140 U. §.

55

General Electric Co. v. Wabash Appliance Corp., 304

U.S. 364.

Nor can the subject application be cured by amendment.

The United States Patent Office does not allow an applica-

tion filed by one as the inventor to be amended to include

other inventor-applicants. Ex Parte Benes (1925) C.D.

75; 399 0.G. 499. A fortiori, this is true when the subject

matter of the applications has been publicly known for

more than a year (35 U.S.C. § 31).

“*1068’’ is thus in the public domain. This Honorable

Court has many times held that a process in the public

domain may be marketed and sold by anyone. Kellogg Co.

v. National Biscuit Co., 305 U. 8. 111; Singer Mfg. Co. v.

June Mfg. Co., 163 U. S. 169. The Court below, however,

has held that Petitioner may not market and sell “1068”.

Thus Respondent, under color of the patent laws, is effec-

13

tively and perpetually insulated against competition from

its strongest competitive threat. Petitioner is familiar

with the process and could bring it to the public in a com-

petitive market. In the Muncie Gear Works case, supra,

page 9, the Court granted certiorari to cure such a ‘“‘...

plain disregard of the public interest sought to be safe-

guarded by the patent statutes...’’ (315 U.S. at 768).

III. The Court Below Gave Further Effect to Its Usurpa-

tion of Exclusive Federal Jurisdiction by Ordering As-

signment of Void Patent Applications.

The Court below ordered this action contrary to a con-

trolling decision of this Court which held such an order im-

proper and contrary to the public policy of the patent laws.

Kennedy v. Hazelton, 128 U.S. 667, was a suit similar to the

one at bar asking specific performance of a written contract

to assign future patents. The patent was found void. It

was said:

‘‘A court of chancery cannot decree specific perform-

ance of an agreement to convey property which has no

existence, or to which the defendant has no title.

* * *

‘‘A patent which is not supported by the oath of the

inventor but applied for by one who is not the inven-

tor, is unauthorized by law and void, and, whether

taken out in the name of the applicant or of any as-

signee of his, confers no rights as against the public.

* * *

‘‘ , its only possible value or use to the plaintiff would

be to enable him to impose upon the public by asserting

rights under a void patent’’. (128 U. S. at 669-70).

As a further matter the Court below erred in directing

specific performance of an alleged written contract. No

document was produced, no attesting witnesses appeared ;

Respondent’s witnesses denied having seen Petitioner exe-

cute it. The holding is directly contrary to the holding of

:

14

this Court which requires ‘‘clear and satisfactory” proof

before ordering specific performance of an alleged contract

to assign future inventions. Dalzell v. Dueber W atch-Case

Mfg. Co., 149 U. S. 315, 325.

IV. The Injunction Below Restraining Petitioner from

Using or Disclosing “1068” or Any Other Process, For-

mula, Method or Product Discovered by or Made

Known to Petitioner While in Respondent’s Employ

Unconstitutionally Deprives Petitioner of His Right

to Practice His Trade and is Contrary to Public Policy.

The right of a man to practice freely a trade or profes-

sion is safeguarded by the Constitution. It is held that

interference with that right is an unconstitutional depriva-

tion of liberty. Allgeyer v. Louisiana, 165 U. S. 578; Smith

v. Texas, 233 U. S. 630.

The order of the State Court below is such an invasion.

It has been demonstrated that ‘‘1068’’ is in the public do-

main. Anyone has the right to manufacture and sell it.

The Court below, however, has deprived Petitioner of that

right through its order.

An injunction against disclosure of an unpatented proc-

ess will issue only where the process is a secret, not where

it has been disclosed. DuPont de Nemours Powder Co. v.

Maslamd, 244 U. 8. 100; American Dirigold Corp. v. Diri-

gold Metals Corp., 125 F. (2d) 446 (6th Cir,, 1942) ;

DFilippis v. Chrysler Corp., 53 F. Supp. 977 (S.D.N.Y.

1941); Smoley v. New Jersey Zinc Co., 24 F. Supp. 294

(D.N.J. 1938). In the Smoley case the rule was stated at

300:

‘*A duty not to use an idea already known cannot be

created by virtue of the fact that one makes a confiden-

tial disclosure of that idea. Masland v. DuPont de Ne-

mours Powder Co., 3 Cir., 224 F. 689, 693, reversed on

other grounds, 244 U. S. 100, 37 S. Ct. 575, 61 L. Ed.

1016. If the rule were not so restricted it is obvious

that by disclosing an idea under delusions of confi-

— —

15

dence, the person making the disclosure could there-

after prevent the confidante from subsequently making

use of it, even though the idea was well-known prior to

the date of the disclosure and open to the use of all

others in the world.’’

The Court below went further. It not only restrained

Petitioner from using or disclosing ‘‘1068’’ which is in the

public domain. It enjoined Petitioner from using any

product, process, formula, or method discovered or made

known to Petitioner during his 15 years employment by Re-

spondent. This was ordered without regard to whether

any or all of these processes are in the public domain. The

injunction obviously prevents Petitioner from practicing

his profession since the record shows that the major part

of his experience, 15 years, was gained during his employ-

ment by Respondent. This is an unconstitutional depriva-

tion of liberty which should be corrected by this Honorable

Court—particularly in view of the uncontradicted potential

of Petitioner to contribute to public knowledge and welfare

in the field of chemistry.

The Court below has done more than unconstitutionally

deprive Petitioner of his trade and to subvert the federal

statutes by protecting Respondent from competition in the

use and sale of the process ‘‘1068’’ and other products al-

ready in the public domain.

It has raised other important questions which have not

been decided by this Honorable Court. On the basis of

scanty evidence it determined to enjoin Petitioner from

using or disclosing any processes invented by him or made

known to him while he was in Respondent’s employ. It re-

stricted the production of the insecticide in question and

all of Respondent’s other processes and granted to Respon-

dent a monopoly.

A circuit court has recently stated that injunctions re-

stricting the use of so-called trade secrets and tying up

‘‘know-how’’ are contrary to public policy. Reynolds

Metals Co. v. Skinner, 166 F. (2d) 66 (6th Cir. 1948). But

16

a decision by this Honorable Court definitively establishing

the lengths to which a resourceful corporation may go to

monopolize ‘‘know-how’’ under the guise either of the fed-

eral patent laws or so-called secrecy agreements, written or

inferred, is not to be found. As this Honorable Court has

set the pattern for a strict construction of the patent mo-

nopoly, so, we respectfully suggest, should it set the pat-

tern for widespread utilization of ‘‘know-how’’. This

Court has declared in Scott Paper Co. v. Marcalus Mfg.

Co., 326 U. S. 249, 255, that the overriding patent policy is

‘*. .. full disclosure for the benefit of the public of the

manner of making and using the invention...”

With respect to ‘‘know-how’’ in a highly mechanized and

complex industrial society, a similar over-riding policy of

disclosure should be evolved. Certainly a chemist of Peti-

tioner’s admitted ability should not be restrained from

bringing to the public the results of his work in the absence

of certain and definitely proved agreements to the con-

trary. Such agreements have not been shown in this case,

The lower court inferred them. The practical result of the

lower court’s holding has been to grant to Respondent a

monopoly in this important field contrary to public policy.

We submit that this Honorable Court should review the

problem of restricting ‘‘know-how’’. It has perhaps be-

come more important than the use of the patent monopoly

itself in the ever-increasing concentration of productive fa-

cilities. This case presents an appropriate opportunity for

the Court to consider the problem.

CONCLUSION.

The subject matter of this litigation is an important one

involving the federal statutes. Conflict is improbable. The

Court below has invaded exclusive federal jurisdiction and

given effect to the invasion by enabling Respondent to sub-

vert the policy of the federal patent laws. It has further

unconstitutionally taken from Petitioner the right to prac-

-

17

tice his profession. The decision below has decided these

questions and contributed to the ability of resourceful cor-

porations to control and restrict the use and development of

technological skills and ‘‘know-how”’ contrary to public

policy.

Wuererorg, it is respectfully submitted that this petition

should be granted.

THurMAN ARNOLD,

Wi.uiam G. Boop,

Byron R. Waite,

Attorneys for Petitioners.

April 19, 1950.