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Gronemeyer v. Hunter Mfg. Corp.

Court of Chancery of Delaware, New Castle County

October 28, 1954

George E. GRONEMEYER, Plaintiff,
HUNTER MANUFACTURING CORPORATION, a corporation of the State of Delaware, Defendant.

Action by patentee to enjoin assignee of patent from using secret information as to commercial use of patented product disclosed by patterns and drawings submitted to assignee and for an accounting of profits, wherein defendant filed a counterclaim. The Court of Chancery found in favor of patentee, but upon failure of the parties to agree upon the form of order to be entered, the matter was submitted to the court, and the Court of Chancery, Seitz, Chancellor, held that since it was impossible to formulate a completely fair and workable injunction, the decree should be drawn in the alternative requiring patentee to elect to take either a money judgment for the fair value of information retained by assignee or an injunction directing destruction of all patterns and drawings in possession or control of assignee except those taught by patent and an accounting covering period from date drawings should have been returned to date to be fixed by court.

Order in accordance with opinion.

Page 590

John M. Bader, Joseph A. L. Errigo, Wilmington, for plaintiff.

James R. Morford, Ernest S. Wilson, Jr., of Morford & Bennethum, Wilmington, and Robert R. Thornton of Dorr & Hand, New York City for defendant.

SEITZ, Chancellor.

Since the court filed its opinion in this case, Gronemeyer v. Hunter Mfg. Corp., Del.Ch., 106 A.2d 519, the [35 Del.Ch. 2] parties have been engaged in prolonged private argument as to the form of order to be entered thereon. The matter has finally been submitted to the Court for decision. The difficulty arises from the nature of the case, as is best demonstrated by a reading of the previous opinion. It was there held, in substance, that plaintiff was entitled to protection of the ‘ know-how’ taught by certain patterns and drawings which were revealed to defendant under an agreement and then returned to plaintiff.

Plaintiff seeks one of two types of injunction:

1. Enjoin defendant perpetually from using or disclosing any of the processes, methods or techniques exemplified by the patterns and drawings, or,

2. Enjoin defendant, for a limited period of time, from making any reflective insulation which embodies or employs methods or techniques that are substantially identical with those taught by the drawings.

Defendant says that plaintiff is not entitled to an injunction and that even if he is, it is necessary to limit it so that it will not embrace matters taught by the patent owned by defendant, or information already in the public domain or know-how secured from plaintiff while he was employed by defendant. Alternatively, defendant contends that the Court should grant plaintiff monetary relief in lieu of an injunction because of the practical difficulties in formulating an injunction which would be both fair and workable.

I do not hesitate to say that this problem is a particularly difficult one for this Court. As the arguments of counsel have demonstrated, it is a challenge to the ingenuity of a Court of Equity. The conclusions hereinafter reached are not entirely satisfactory. I believe that such a result is inevitable where, as here, there must be an accommodation

Page 591

of the rights of both sides. The subject matter-know-how-is such that language is inadequate to delineate the respective rights of the parties in a manner which will be fully meaningful to defendant when it proceeds with its operation. And, more important, language of the kind sought by plaintiff would make a fairly objective evaluation of defendant's subsequent conduct almost impossible.

[35 Del.Ch. 3] In my discretion I determine that the relief should take the form of the grant of an election to plaintiff to choose between two alternatives. In this way, plaintiff may have a choice of fair alternatives and defendant will not benefit by its legal wrong. I do not believe that these facts present a situation where plaintiff is being forced to take something less or something different than he is entitled to under the decision. The reversing aspects of Richard Paul, Inc., v. Union Improvement Co., Del.Sup., 91 A.2d 49, are therefore not in point.

I believe equity has jurisdiction to give a plaintiff such a choice in a case such as is revealed by my previous opinion, viz., where the equitable right has been established and the ...

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