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Gronemeyer v. Hunter Mfg. Corp.

Court of Chancery of Delaware, New Castle County

July 6, 1954

GRONEMEYER
v.
HUNTER MFG. CORP.

Action by patentee to enjoin assignee of patent from using secret information as to commercial use of patented product obtained by patentee as a result of testing and experimentation and disclosed by patterns and drawings, which assignee had been permitted to use with option to purchase or return to patentee by specified date, and for an accounting of profits, wherein defendant filed a counterclaim. The Court of Chancery, Seitz, Chancellor, held that since assignee had exercised option to return patterns and drawings, patentee was entitled to an injunction to protect his interest in the information as to use of patented product disclosed by patterns and drawings.

Judgment for plaintiff in accordance with opinion.

See also 101 A.2d 489.

Page 520

[34 Del.Ch. 516] Joseph A. L. Errigo, H. Newton White, Jr., John M. Bader, Edmund A. Traccarella, Wilmington, for plaintiff.

William Marvel, of Morford, Bennethum & Marvel, Wilmington, John K. Watson of Dorr, Hand & Dawson, New York City, for defendant.

SEITZ, Chancellor.

This is an action to enjoin the defendant corporation from using certain drawings and patterns or copies thereof, and for an accounting of profits earned by defendant.

Plaintiff, George E. Gronemeyer, is a mechanical engineer who for some years has specialized in industrial installation. He devised [34 Del.Ch. 517] a system of reflective metal sheets arranged in layers with air spacings between which he called ‘ Mirror Insulation’ . The basic idea was subsequently incorporated in a patent which was granted him.

The plaintiff by testing and experimentation came to develop a practical and economical feasible basis for the commercial use of the product. In the course of this development plaintiff prepared or caused to be prepared a large number of patterns and drawings which showed how to make all the various types of insulating units for different sizes and shapes of pipes and for various temperatures.

Having obtained some financial backing, plaintiff organized a corporation known as the Gronemeyer Corporation which commenced the production of Mirror Insulation on a fairly large scale. Gronemeyer Corporation was active for approximately two years and furnished insulation for several large power plants. The sales for this period amounted to $350,000.

For reasons not here important the Gronemeyer Corporation encountered financial difficulties which required it to discontinue operations. About this time, Charles E. Hunter, president of the defendant corporation, became interested in Mirror Insulation. As a result negotiations were entered into which culminated in the contemporaneous execution on February 20, 1952 of four written agreements. One constituted a sale of the assets of Gronemeyer Corporation to defendant. The second was an employment contract between Gronemeyer and defendant. The third was an agreement to sell and assign the patent. The fourth was the so-called pattern agreement.

Under the agreement of sale between Gronemeyer Corporation and defendant, plaintiff provided for the assignment and sale to defendant of all the tools, machinery, stock in process and materials and all of the right, title, and interest of Gronemeyer Corporation, ‘ if any’, in the patterns, drawings, copyrights, trade-names and trade-marks set forth in the attached schedule. For this defendant paid $34,636.54.

Under the employment agreement with defendant the plaintiff agreed to devote his entire time and engineering abilities to the furtherance [34 Del.Ch. 518] of defendant's business. ...


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