U.S. Supreme Court
E. I. Du Pont De Nemours Powder Co. v. Masland
244 U.S. 100
1917
MR. JUSTICE HOLMES delivered the
opinion of the court.
This is a bill to prevent the
defendant Walter E. Masland from using or disclosing secret processes the
knowledge of which was acquired by the defendant while in the plaintiffs'
employ. The defendant admits that he intends to manufacture artificial leather,
to which some of the plaintiffs' alleged secret processes relate, but denies
that he intends to use any inventions, trade secrets, or secret processes of
the plaintiffs that he may have learned in any confidential relation, prefacing
his denial, however, with the averment that many of the things claimed by the
plaintiffs are well known to the trade. A preliminary injunction was refused at
first. 216 Fed. Rep. 271. But before the final hearing the defendant proposed
to employ one or more experts and to make such disclosures to them as the
preparation of the defence might require. Thereupon the District Court issued a
preliminary injunction against disclosing any of the plaintiffs' alleged
processes to experts or witnesses during the taking of proofs, but excepting
counsel, with leave to move to dissolve the injunction if occasion to consult
experts arose. Later a motion to dissolve was denied and the hearing was
continued for a decision by the Appellate Court. 222 Fed. Rep. 340. The Circuit
Court of Appeals reversed the decree. 224 Fed.Rep. 689. Before any further
order was entered the writ of certiorari was granted by this court.
The case has been considered as
presenting a conflict between a right of property and a right to make a full
defence, and it is said that if the disclosure is forbidden to one who denies
that there is a trade secret, the merits of his defence are adjudged against
him before he has a chance to be heard or to prove his case. We approach the
question somewhat differently. The word property as applied to trade-marks and
trade secrets is an unanalyzed expression of certain secondary consequences of
the primary fact that the law makes some rudimentary requirements of good
faith. Whether the plaintiffs have any valuable secret or not the defendant
knows the facts, whatever they are, through a special confidence that he
accepted. The property may be denied but the confidence cannot be. Therefore
the starting point for the present matter is not property or due process of
law, but that the defendant stood in confidential relations with the
plaintiffs, or one of them. These have given place to hostility, and the first
thing to be made sure of is that the defendant shall not fraudulently abuse the
trust reposed in him. It is the usual incident of confidential relations. If
there is any disadvantage in the fact that he knew the plaintiffs' secrets he
must take the burden with the good.
The injunction asked by the
plaintiffs forbade only the disclosure of processes claimed by them, including
the disclosure to experts or witnesses produced during the taking of proofs —
but excepting the defendant's counsel. Some broader and ambiguous words that crept
into the decree, seemingly by mistake, may be taken as stricken out and left on
one side. This injunction would not prevent the defendant from directing
questions that should bring out whatever public facts were nearest to the
alleged secrets. Indeed it is hard to see why it does not leave the plaintiffs'
rights somewhat illusory. No very clear ground as yet has been shown for going
further. But the judge who tries the case will know the secrets, and if in his
opinion and discretion it should be advisable and necessary to take in others,
nothing will prevent his doing so. It will be understood that if, in the
opinion of the trial judge, it is or should become necessary to reveal the
secrets to others it will rest in the judge's discretion to determine whether,
to whom, and under what precautions, the revelation should be made.
Decree reversed and case
remanded for further proceedings in conformity with this opinion.