B-143711, MAY 15, 1961

B-143711, MAY 15, 1961

TO MARECHAL, BIEBEL, FRENCH AND BUGG:

BY LETTER DATED JANUARY 24, 1961, WITH ENCLOSURES, YOU REQUESTED THAT WE RECONSIDER OUR DECISION OF DECEMBER 22, 1960, WHEREIN WE HELD THAT SINCE THE INCLUSION OF EXHIBIT "A" TO SPECIFICATION MIL-S-9129A IN INVITATION FOR BIDS NO. 33-604-61-101 CONSTITUTED AN IMPROPER DISCLOSURE OF THE PROPRIETARY DATA OF THE GAYSTON CORPORATION, THE INVITATION SHOULD BE CANCELED AND A CONTRACT NEGOTIATED WITH GAYSTON PURSUANT TO 10 U.S.C. 2304 (A) (10). WE STATED IN SUCH DECISION THAT WHILE YOUR CLIENT, DAYTON AIRCRAFT PRODUCTS, INC., WAS THE LOWEST BIDDER UNDER THE INVITATION, THE INTEGRITY OF THE GOVERNMENT AS A CONTRACTOR REQUIRES THAT THE INVITATION BE CANCELED.

YOU POINT OUT THAT HIGHLY PERTINENT FACTS, NOT HERETOFORE BEFORE OUR OFFICE, ESTABLISH THAT IT WOULD BE IMPROPER TO AWARD A CONTRACT TO GAYSTON AND THAT AWARD SHOULD BE MADE TO DAYTON AS THE LOWEST COMPETITIVE BIDDER. IT IS CONTENDED ON BEHALF OF DAYTON THAT GAYSTON WAS NOT THE FIRST TO SUGGEST THE USE OF NYLON AS A SUBSTITUTE FOR THE COTTON WICKING COMMONLY USED IN STATIC DISCHARGERS; THAT THE PROVISION FOR THE USE OF NYLON IN EXHIBIT "A" PREPARED BY GAYSTON WAS NOT A ,TRADE SECRET" GIVING GAYSTON A PROPRIETARY RIGHT THEREIN; AND THAT THERE WAS NO PROPRIETARY RIGHT IN GAYSTON IN THE PARTICULAR DETAILS OF THE TEST SPECIFICATION, EXHIBIT "A," TO THE EXTENT THAT IT DIFFERED FROM, OR WAS A MODIFICATION OF, SPECIFICATION MIL-S-9129A.

TO SHOW THAT THE GAYSTON USE OF IMPREGNATED NYLON WICKING IN EXHIBIT "A" WAS NOT NEW OR SIGNIFICANTLY NOVEL SO AS TO BE PROPRIETARY TO GAYSTON, YOU REFER TO THE DR. W. C. HALL PATENT NO. 2,466,311 DATED APRIL 5, 1949, AND TO DR. HALL'S PROJECT NOTEBOOKS ON EXPERIMENTS INVOLVING THE TREATMENT OF FINE THREAD NYLON CORD WITH A SILVER SOLUTION AND SUBJECTING THE SAME TO A WASH TEST. THE HALL PATENT, ENTITLED "APPARATUS FOR PREVENTING RADIO INTERFERENCES," MAKES REFERENCE TO THE USE OF "CHAMOIS SKIN, COTTON, WOOL, GLASS AND SYNTHETIC FIBERS" AS SATISFACTORY MATERIALS FOR STATIC WICK DISCHARGERS WHEN RENDERED SEMI-CONDUCTING BY IMPREGNATION WITH FINELY DISPENSED CONDUCTING AGENTS SUCH AS CARBON OR FINELY DIVIDED METAL. IT IS UNDERSTOOD THAT THE HALL PATENT WAS DEVELOPED DURING THE COURSE OF GOVERNMENT EMPLOYMENT AND THAT THE GOVERNMENT HAS A LICENSE UNDER THE PATENT. IN THAT CONNECTION, YOU CITE AS AUTHORITY FOR THE PROPOSITION THAT THERE CAN BE NO ENFORCEABLE TRADE SECRET WHERE THE PARTY DISCLOSING THE INFORMATION ALREADY HAS ACQUIRED, THROUGH PROPER CHANNELS, THE INFORMATION SOUGHT TO BE ESTABLISHED AS PROPRIETARY, CANFIELD V. BLAW- KNOX, 98 F.2D 805; FERROLINE CORP. V. GENERAL ANILINE AND FILM CORP., 207 F.2D 912. THOSE CASES ARE NOT DISPOSITIVE OF THE QUESTION HERE SINCE THEY INVOLVED NO EXPRESS OR IMPLIED PROVISIONS BETWEEN THE PARTIES TO TREAT THE DISCLOSURE IN CONFIDENCE, WHEREAS, IN THE INSTANT CASE THE AIR FORCE WAS OBLIGED, UNDER ESTABLISHED PROCEDURES, TO MAINTAIN THE CONFIDENTIAL CHARACTER OF THE DATA SUBMITTED BY GAYSTON.

AT THIS JUNCTURE, IT SHOULD BE NOTED THAT THE RECORD DOES NOT ESTABLISH, AT THE TIME GAYSTON SUBMITTED EXHIBIT "A" TO THE AIR FORCE, THAT THE USE OF NYLON WICKING HAD BEEN INTRODUCED UNDER THE HALL PATENT EITHER BY THE AIR FORCE OR DAYTON. IN FACT, THE RECORD SATISFACTORILY ESTABLISHES THAT THE AIR FORCE WAS UNAWARE OF THE EXISTENCE OF THE HALL PATENT AT THE TIME OF THE GAYSTON SUBMISSION AND THAT DEPARTMENT HAD CHARACTERIZED THE GAYSTON DISCLOSURE AS AN "IMPROVEMENT OVER THE PAST RESULTS," AND AS INDICATING "SIGNIFICANTLY IMPROVED PERFORMANCE" AND "SUPERIOR RUGGEDNESS, LIFE AND OVERALL PERFORMANCE.' MOREOVER, WHILE THE RECORD SHOWS THAT THE DEPARTMENT OF THE NAVY--- THE IMMEDIATE BENEFICIARY OF THE HALL PATENT--- WAS FURNISHED A COPY OF THE GAYSTON PROPOSAL IN OCTOBER 1959, THAT DEPARTMENT IN REFERRING TO THEIR INTEREST IN THE PROPOSAL APPARENTLY DID NOT ADVISE THE AIR FORCE OF THE EXISTENCE OF THE HALL PATENT.

THUS, ON THE BASIS OF THE FACTS BEFORE US, NO SUCCESSFUL REDUCTION TO PRACTICE OF THE USE OF NYLON WICKS WAS MADE IN THE FIFTEEN YEARS PRIOR TO SUBMISSION OF THE GAYSTON PROPOSAL. THE COURT HELD IN THE FERROLINE CASE (207 F.2D 912, 921) THAT:

"SECRECY IS THE BASIS OF PLAINTIFF'S CLAIM. HERE EVIDENCE TENDS TO PROVE THAT MANY MONTHS AND MUCH LABOR WERE EXPENDED BY PLAINTIFF IN DEVELOPING A SUCCESSFUL CARBONYL PROCESS, INVOLVING COMPLICATED CHEMICAL AND MECHANICAL PROBLEMS. DEFENDANT CONTENDS, HOWEVER, THAT THIS PROCESS WAS MERELY THAT DISCLOSED IN THE FARBEN PATENTS, AND CONSTITUTES AN INFRINGEMENT OF THOSE PATENTS. OBVIOUSLY, THE DETERMINATIVE QUESTION IN THIS RESPECT IS NOT THE VALIDITY OF THE PATENTS, AS THE MASTER APPARENTLY BELIEVED, BUT WHETHER PLAINTIFF'S ALLEGED SECRET PROCESS, IN ALL ITS DETAILS, IS DISCLOSED IN THE PATENTS OR IN PRIOR ART TEACHINGS. IF ALL ESSENTIAL DETAILS HAVE BEEN DISCLOSED, THE PROCESS HAS BECOME A PART OF THE PUBLIC DOMAIN AND CAN NOT BE CLAIMED BY PLAINTIFF AS ITS PROPERTY. SMITH V. DRAVO CORP., SUPRA; CARVER V. HAR, SUPRA. ALTHOUGH THE INFERENCE FROM THE EVIDENCE THAT MANY MAJOR ELEMENTS OF PLAINTIFF'S PROCESS ARE SHOWN IN THE PRIOR ART TEACHINGS IS TENABLE, THE COMBINATION OF THESE ELEMENTS INTO A COMPLICATED PRODUCTION PROCESS AMOUNTED TO A TRADE SECRET, STONE V. GOSS, SUPRA, IF THE COMBINATION OF THE INTERRELATED PARTS REPRESENTED A VALUABLE CONTRIBUTION ARISING FROM PLAINTIFF'S INDEPENDENT EFFORTS. SMITH V. DRAVO CORP., SUPRA. HERE THE MASTER HAS FOUND, AND THE EVIDENCE SUPPORTS THE FINDING, THAT THE PROCESS AS A WHOLE WAS THE PRODUCT OF PLAINTIFF'S EFFORTS, DIFFERING MATERIALLY FROM ANY METHODS TAUGHT IN THE PRIOR ART. THE TRIAL COURT COULD NOT, AND THIS COURT MAY NOT, DISTURB THAT FINDING.'

IN DISPOSING OF A DEFENSE THAT A TRADE SECRET WAS ANTICIPATED IN THE PRIOR ART, THE NEW YORK COURT OF APPEALS IN FAIRCHILD ENGINE AND AIRPLANE CORP. V. COX, 50 N.Y.S.2D 643, 656-657, HELD:

"* * * A TRADE SECRET NEED NOT BE PATENTABLE. UNLESS THIS CARDINAL DISTINCTION IS KEPT CLEARLY IN MIND, THE TRANSCENDENT ISSUE WHICH THIS CASE PRESENTS IS LIKELY TO BECOME BLURRED BEYOND RECOGNITION. THE DOCTRINE OF "PRIOR ART," WHICH THE DEFENDANT INVOKES AS A SHIELD, IS OF VITAL IMPORTANCE IN PATENT CASES, BUT IT IS NOT SO SIGNIFICANT IN THIS CASE. THE DIFFERENCE IS BOLDLY ETCHED UNDER THE HEADING "NOVELTY AND PRIOR ART," IN THE "RESTATEMENT OF TORTS," PP. 6, 7, AS FOLLOWS:

" "NOVELTY AND PRIOR ART. A TRADE SECRET MAY BE A DEVICE OR PROCESS WHICH IS PATENTABLE; BUT IT NEED NOT BE THAT. IT MAY BE A DEVICE OR PROCESS WHICH IS CLEARLY ANTICIPATED IN THE PRIOR ART OR ONE WHICH IS MERELY A MECHANICAL IMPROVEMENT THAT A GOOD MECHANIC CAN MAKE. NOVELTY AND INVENTION ARE NOT REQUISITE FOR A TRADE SECRET AS THEY ARE FOR PATENTABILITY. * * * THE PROTECTION IS MERELY AGAINST BREACH OF FAITH AND REPREHENSIBLE MEANS OF LEARNING ANOTHER'S SECRET. FOR THIS LIMITED PROTECTION IT IS NOT APPROPRIATE TO REQUIRE ALSO THE KIND OF NOVELTY AND INVENTION WHICH IS A REQUISITE OF PATENTABILITY. * * *"

"SO HERE,"BREACH OF FAITH AND REPREHENSIBLE MEANS OF LEARNING ANOTHER'S SECRET" IS THE ISSUE. TO LOSE SIGHT OF EVERYTHING ELSE IN PURSUIT OF "PRIOR ART"--- "THE KIND OF NOVELTY AND INVENTION WHICH IS A REQUISITE OF PATENTABILITY"--- IS TO BECOME A FUGITIVE FROM THE PREMIER IF NOT THE SINGLE ISSUE TO BE APPREHENDED AND SOLVED.

"THE DEFENDANT'S REPLY THAT WHAT HE PROPOSED TO DO DOES NOT CONCERN A "SECRET," IN CONTRADICTED BY HIS OWN CONDUCT AND WORDS. FROM THE MASS OF TESTIMONY THE TRANSCENDENT FACT EMERGES THAT THE PLAINTIFFS' PROCESS SUCCEEDED WHERE OTHERS FAILED. NO ONE ELSE ACHIEVED THE PRACTICAL RESULTS THESE PLAINTIFFS ACHIEVED. TO RETORT THAT OTHERS MIGHT OR COULD HAVE DONE IT, OR WERE ON THE SAME TRACK, DOES NOT ALTER OR WEAKEN THE FACT THAT THE PLAINTIFFS DID DO IT. * * *

"IT IS QUITE MANIFEST THAT AFTER THIS LITIGATION WAS PROJECTED, THE DEFENDANT COMMENCED DIGGING IN THE FIELD OF "PRIOR ART" TO ASCERTAIN WHAT HAD BEEN DONE AND WRITTEN ABOUT BONDING ALUMINUM WITH FERROUS METALS. CONCEDEDLY, THE FIELD WAS NOT ENTIRELY VIRGIN. BUT THE PLAINTIFFS' EXPENDITURE OF TIME AND MONEY BROUGHT RESULTS NOT REACHED BY OTHERS. ONCE WE CONCLUDE THAT THE WORK DONE UNDER COX'S SUPERVISION WAS CONFIDENTIAL, AND THAT COX THREATENS TO BREACH THE CONFIDENCE, ALL ELSE IS OF SUBORDINATE IMPORTANCE. AS MR. JUSTICE HOLMES SUCCINCTLY SAID IN E. I. DU PONT DE NEMOURS POWDER CO. V. MASLAND, SUPRA, 244 U.S. PAGE 102, 37 S.CT. PAGE 576, 61 L.ED. 1016:

" "* * * 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.'

"AS HERE, THE DEFENDANT IN THE DU PONT CASE DEFENDED ON THE GROUND, INTER ALIA, THAT KNOWLEDGE OF THE PROCESS THERE INVOLVED WAS POSSESSED BY ALL PERSONS ENGAGED IN THE INDUSTRY. SEE THE REPORT IN THE LOWER COURT, 3 CIR., 224 F. 689.'

SEE, ALSO, SHELLMAR PRODUCTS CO. V. ALLEN-QUALLEY CO., 36 F.2D 623; K AND G OIL TOOL CO. V. G. G. FISHING TOOL SERV., 314 S.W.2D 782; SUN DIAL CORP. V. RIDEOUT, 102 A.2D 90.

WHILE IT MAY BE ARGUED THAT EITHER OR BOTH DR. HALL'S EXPERIMENTAL WORK ON SYNTHETIC WICK DISCHARGERS OR THE DISCLOSURE IN HIS PATENT CONSTITUTED AN ANTICIPATION OF GAYSTON'S USE OF NYLON WICKING SO AS TO PREVENT ANY ACQUISITION OF A TRADE SECRET, WE BELIEVE THAT THE PRESENT RECORD INDICATES THAT DR. HALL'S EXPERIMENTS WITH NYLON WERE INCONCLUSIVE AND ABANDONED. FROM THE FACTS KNOWN TO US, DR. HALL'S EFFORTS TO DEVELOP A SATISFACTORY NYLON WICK WERE NEVER BROUGHT TO FRUITION. AS HELD IN PENNINGTON V. NATIONAL SUPPLY CO., 95 F.2D 291, IN THAT CONNECTION:

"AN UNSUCCESSFUL EXPERIMENT WHICH IS LATER ABANDONED DOES NOT NEGATIVE NOVELTY IN A NEW AND SUCCESSFUL DEVICE.'

UNSUCCESSFUL ABANDONED EXPERIMENTS CONFER NO RIGHT UPON THOSE WHO MAKE THEM, AND THEY AFFECT NO RIGHTS OF ANY OTHER PERSON. 40 AM.JUR., PATENTS, SECTIONS 28 AND 29.

WHILE IT IS ARGUED THAT THE USE OF NYLON AS WICKING HAD ALREADY BEEN ACQUIRED BY THE GOVERNMENT THROUGH THE HALL PATENT, THE FACT REMAINS THAT THE PRACTICAL APPLICATION OF NYLON TO STATIC DISCHARGERS WAS NOT DISCOVERED BY THE GOVERNMENT PRIOR TO OR INDEPENDENTLY OF THE GAYSTON CONFIDENTIAL DISCLOSURE. THE GOVERNMENT, ONCE HAVING ACCEPTED THE GAYSTON IDEA IN CONFIDENCE, MAY NOT NOW CONTEND THAT SUBSEQUENTLY DISCOVERED, OBSCURE, EVEN PUBLIC, REFERENCES TO THAT IDEA AVOID THE LEGAL RESPONSIBILITIES ATTENDANT IN A CONFIDENTIAL DISCLOSURE OF A TRADE SECRET.

IN THE SHELLMAR PRODUCTS CASE, SUPRA, THE PLAINTIFF HAD DISCLOSED TO THE DEFENDANT, AS PROPOSED LICENSEE, UNDER A BAN OF SECRECY, A SECRET PROCESS AND MACHINERY FOR A NEW WRAPPER FOR CANDY PACKAGES. THE DEFENDANT THEREUPON HAD A SEARCH MADE AND DISCOVERED A PATENT TO ONE OLSEN COVERING SUCH WRAPPERS. THE DEFENDANT BOUGHT THE PATENT FOR $1,000 AND CLAIMED IT HAD THE RIGHT TO MAKE WRAPPERS LIKE THE PLAINTIFF'S UNDER SUCH PATENT. THE PLAINTIFF ASKED FOR AN ASSIGNMENT OF THE PATENT TO IT AND FOR AN INJUNCTION. IN AFFIRMING THE DECISION OF THE LOWER COURT GRANTING THE RELIEF REQUESTED, THE COURT HELD AT 36 F.2D 624-625 THAT:

"AT THE EXPENSE OF CONSIDERABLE TIME AND MONEY, APPELLEE HAD DEVISED THE WRAP AND THE MACHINE, AND HAD MANUFACTURED THE MACHINE, AND THOSE TWO THINGS WERE, AT THE TIME THE NEGOTIATIONS WERE COMMENCED, SECRETS THAT BELONGED TO IT, AND BECAME KNOWN TO APPELLANT UNDER THE PLEDGE OF SECRECY AFTER THE TERMS OF THE CONTRACT BETWEEN THE PARTIES HAD BEEN AGREED UPON. * * * WHETHER IT WOULD HAVE BEEN POSSIBLE TO HAVE DISCOVERED AND PURCHASED THE OLSEN PATENT, WITHOUT THE INFORMATION DISCLOSED TO APPELLANT IN CONFIDENCE, IT IS NOT NECESSARY TO DETERMINE, BECAUSE IT IS CLEAR FROM THE RECORD THAT BY A BREACH OF CONFIDENCE THE INFORMATION WAS DISCLOSED AND USED AS A BASIS FOR THE SEARCH THAT WAS MADE.'

IN BENTON V. WARD, 59 F. 411, IT WAS HELD THAT THE PURCHASER OF STOCKIN A CORPORATION REPRESENTED TO OWN A NEW AND SECRET PROCESS FOR TREATING METALS COULD NOT RESCIND HIS CONTRACT UPON LEARNING THAT A PATENT ON THE PROCESS HAD BEEN REFUSED ON THE GROUND THAT THE PROCESS HAD BEEN DISCLOSED IN A PRIOR PATENT. THE COURT STATED AS FOLLOWS, AT PAGES 413-414:

"* * * IN THE ARGUMENT OF COUNSEL FOR COMPLAINANT IT IS STATED THAT THE REPRESENTATIONS MADE BY THE DEFENDANTS TO INDUCE COMPLAINANT TO PURCHASE THE STOCK WERE FALSE IN TWO PARTICULARS: (1) THE PROCESS WHICH THEY CLAIMED TO OWN WAS NOT A NEW, SECRET PROCESS; * * *.

"IN SUPPORT OF THE FIRST PROPOSITION, RELIANCE IS PLACED UPON THE CLAIM THAT THE PATENT TO JOHN BURT, ISSUED IN 1869, COVERS THE SAME PROCESS, AND THEREFORE, IN THE LANGUAGE OF COUNSEL,"IT HAD BEEN A MATTER OF PUBLIC RECORD FOR TWENTY YEARS.' GRANTING THE CLAIM THAT THE BURT PATENT IN FACT DESCRIBED THE PROCESS USED BY THE HAWKEYE METAL COMPANY, THE QUESTION ARISES WHETHER THAT FACT PROVES THAT THE REPRESENTATIONS MADE BY THE DEFENDANTS WERE SUBSTANTIALLY FALSE. IT IS NOT SHOWN IN THE EVIDENCE THAT BURT, OR ANYONE CLAIMING UNDER HIM, EVER MANUFACTURED OR PUT IN USE ANY METAL TREATED BY HIS PROCESS. SO FAR AS THE PROOF IS CONCERNED, IT SIMPLY APPEARS THAT IN 1869 A PATENT WAS ISSUED TO BURT, BUT IT DOES NOT APPEAR THAT THE KNOWLEDGE OF THE PROCESS PROCEEDED FURTHER. MANY AN INVENTION AND MANY AN IDEA OF VALUE ARE DOUBTLESS TO BE FOUND IN THE RECORDS OF THE PATENT OFFICE, BUT, SO FAR AS PUBLIC ACTUAL KNOWLEDGE THEREOF IS CONCERNED, THEY MIGHT AS WELL BE NONEXISTENT. THE FACT THAT A PATENT HAD BEEN ISSUED IN 1869 TO BURT MIGHT BE SUFFICIENT TO DEFEAT THE ISSUANCE OF ANOTHER PATENT, BUT IT DOES NOT NECESSARILY SHOW THAT THE REPRESENTATIONS MADE BY THE DEFENDANTS WERE FALSE. * * *

"AS ALREADY STATED, IT DOES NOT APPEAR THAT THE USE OF THE METAL HAD BEEN INTRODUCED UNDER THAT PATENT, AND, SO FAR AS THE PUBLIC WERE CONCERNED, THE PROCESS REMAINED UNKNOWN. IT WAS THEREFORE OPEN TO ANYONE WHO SHOULD REDISCOVER THE PROCESS TO ENTER UPON THE MANUFACTURE OF METAL UNDER THAT PROCESS, AND BY GUARDING THE SECRET OF MANUFACTURE, REAP ALL THE BENEFIT POSSIBLE THEREFROM. THE REPRESENTATIONS CLAIMED TO HAVE BEEN MADE BY THE DEFENDANTS IN REGARD TO THE PROCESS BEING NEW AND SECRET MUST BE REASONABLY CONSTRUED. THE MEANING THEREOF CANNOT BE HELD TO HAVE BEEN AN AFFIRMANCE OF ABSOLUTE NOVELTY. IF THE KNOWLEDGE OF THE PROCESS WAS NOT HAD BY THOSE ENGAGED IN THAT LINE OF BUSINESS TO WHICH THE PROCESS PERTAINED, THEN IT WAS PRACTICALLY A NEW AND SECRET PROCESS. * * *"

SEE, ALSO, FAIRCHILD ENGINE AND AIRPLANE CORP. V. COX, SUPRA), L. M. RABINOWITZ AND CO. V. DASHER, 82 N.Y.S.2D 431.

HENCE, WE DO NOT FEEL THAT THE AFTER-THE-FACT REFERENCE TO THE HALL PATENT OR EXPERIMENTS NOW MITIGATE AGAINST THE TRADE SECRET ACQUIRED BY GAYSTON IN THE USE OF NYLON WICKING.

YOU CONTEND THAT, APART FROM THE QUESTION WHETHER GAYSTON HAD PROPRIETARY RIGHTS IN THE USE OF NYLON WICKING, EXHIBIT "A" AS PREPARED BY GAYSTON COULD NOT BE TREATED AS A TRADE SECRET OR AS PROPRIETARY. IN THAT CONNECTION, YOU REFER TO THE RULE OF LAW THAT MERE INDIVIDUAL MECHANICAL ADVANCES IN THE ART OR ADVANCES IN MECHANICAL SKILLS ARE NOT ENTITLED TO SECRECY. VICTOR CHEMICAL WORKS V. ILIFF, 132 N.E. 806; PITTSBURGH CUT WIRE CO. V. SUFRIN, 38 A.2D 33; MYCALEX CORP. V. PEMCO CORP., 64 F.SUPP. 420. HOWEVER, FOR THE REASONS STATED BELOW, WE DO NOT BELIEVE THAT EXHIBIT "A" COMES WITHIN THAT RULE OF LAW. ON THE CONTRARY, WE FEEL THAT EXHIBIT "A" CONSTITUTED A NEW ADVANCEMENT IN THE ART SUBJECT TO PROTECTION WHEREIN THERE WERE EMPLOYED CREATIVE FACILITIES IN ORIGINATION AMOUNTING TO A MERITORIOUS DISCOVERY OR INVENTION. SEE 43 C.J.S., INJUNCTION, SECTION 148. THE MERE FACT THAT CERTAIN, BUT NOT ALL, OF THE ELEMENTS DISCLOSED IN EXHIBIT "A" WERE NOT NEW PER SE DOES NOT PRECLUDE GAYSTON'S WORK FROM BEING REGARDED AS A TRADE SECRET IN AN OVER-ALL SENSE. WHAT IS MORE IMPORTANT IS NOT THE NOVELTY OF ANY ONE OR MORE OF THE ELEMENTS OF GAYSTON'S DISCLOSURE, CONSIDERED SEPARATELY, BUT RATHER THE COMBINATION OF ALL OF THE FEATURES OF GAYSTON'S WORK IN AN OVER-ALL PRODUCT WHICH, IN THE WORDS OF THE AIR FORCE, WAS SIGNIFICANT IMPROVEMENT OVER THE CURRENT MODEL. IN THE CASE OF DIRIGOLD METAL CORP. V. KERN CO., 40 F.SUPP. 146, WHICH IS DIRECTLY PERTINENT HERE, THE COURT HELD:

"THE FACT THAT THE MEANS, BY WHICH THE MAKING OF THE ALLOY "DIRIGOLD" WAS DISCOVERED, WERE OBVIOUS AND A RESULT OF EXPERIMENTATION, WOULD NOT DESTROY VALUE OF DISCOVERY TO THE ONES WHO MADE IT. * * *"

EXPRESSED IN OTHER WORDS, THE RULE OF LAW IS THAT THERE IS NOTHING TO PREVENT THE GRANTING OF A TRADE SECRET FOR AN IDEA WHICH REPRESENTS MERELY A COMBINATION OF OLD IDEAS SO LONG AS A NEW RESULT IS PRODUCED. SEE THE FERROLINE CORP. CASE, SUPRA, AT PAGE 924; AND ALSO, 69 C.J.S., PATENTS, SECTION 68A; 40 AM.JUR., PATENTS, SECTION 59.

IT SHOULD BE NOTED HERE ALSO THAT THE CRITERIA OF "NOVELTY" AS ATEST OF THE EXISTENCE OF A TRADE SECRET IS NOT THE SAME AS THE HIGH STANDARD OF NOVELTY REQUIRED FOR PATENT PURPOSES. SEE COMMENT B, RESTATEMENT, TORTS, SECTION 757. THERE CAN BE NO REAL DOUBT THAT EXHIBIT "A" WAS OF SIGNIFICANT VALUE TO GAYSTON WITH RESPECT TO WHICH CONSIDERABLE TIME AND MONEY WAS EXPENDED. IN A. O. SMITH CORP. V. PETROLEUM IRON WORKS CO., 73 F.2D 531, 538-539, THE COURT SAID:

"THE MERE FACT THAT THE MEANS BY WHICH A DISCOVERY IS MADE ARE OBVIOUS, THAT EXPERIMENTATION WHICH LEADS FROM KNOWN FACTORS TO AN ASCERTAINABLE BUT PRESENTLY UNKNOWN RESULT MAY BE SIMPLE, WE THINK CANNOT DESTROY THE VALUE OF THE DISCOVERY TO ONE WHO MAKES IT, OR ADVANTAGE THE COMPETITOR WHO BY UNFAIR MEANS, OR AS THE BENEFICIARY OF A BROKEN FAITH, OBTAINS THE DESIRED KNOWLEDGE WITHOUT HIMSELF PAYING THE PRICE IN LABOR, MONEY, OR MACHINES EXPENDED BY THE DISCOVERER. * * *"

SEE, ALSO, SMITH V. DRAVO CORP., 203 F.2D 369.

THE COURTS HAVE LONG RECOGNIZED TRADE SECRETS AS A FORM OF PROPERTY RIGHT IF THEY ARE PROTECTED BY THE OWNER FROM PUBLIC KNOWLEDGE OR ARE DISCLOSED ONLY IN CONFIDENCE. E. I. DU PONT DE NEMOURS POWDER CO. V. MASLAND, 244 U.S. 100; 64 HARVARD LAW REVIEW 976. IN DOLLAC CORPORATION V. MARGON CORPORATION, 164 F.SUPP. 41, 59, IT WAS HELD:

"IT IS NOW WELL ESTABLISHED THAT THE LAW RECOGNIZES A PROPERTY RIGHT IN TRADE SECRETS, AND A COURT OF COMPETENT JURISDICTION WILL PROTECT THE RIGHT AGAINST INVASION BY ONE WHO APPROPRIATES TRADE SECRETS TO HIS OWN USE IN VIOLATION OF A CONTRACTUAL OBLIGATION OR CONFIDENTIAL RELATIONSHIP. * * *"

SEE, ALSO, AKTIEBOLAGET BOFORS V. UNITED STATES, 194 F.2D 145; PAGES 7-9 OF HOUSE REPORT NO. 2230, 86TH CONGRESS, 2D SESSION, WHEREIN THE CONGRESSIONAL VIEW AS TO PROPRIETARY DATA IMPROPERLY DISCLOSED BY THE GOVERNMENT IS EXPRESSED. IN VIEW OF THE FOREGOING, WE MUST HOLD AS A MATTER OF LAW AND PUBLIC POLICY THAT EXHIBIT "A" CONSTITUTED A TRADE SECRET PROPRIETARY TO GAYSTON AND, AS SUCH, WAS ENTITLED TO PROTECTION AGAINST UNWARRANTED DISCLOSURE TO THIRD PARTIES. EVEN ASSUMING THE CONTRARY TO BE THE CASE, THERE WOULD BE FOR APPLICATION THE RULE OF LAW RESTATED IN RESTATEMENT, TORTS, SECTION 757, AS FOLLOWS:

"ALTHOUGH GIVEN INFORMATION IS NOT A TRADE SECRET, ONE WHO RECEIVES THE INFORMATION IN A CONFIDENTIAL RELATION OR DISCOVERS IT BY IMPROPER MEANS MAY BE UNDER SOME DUTY NOT TO DISCLOSE OR USE THAT INFORMATION. BECAUSE OF THE CONFIDENTIAL RELATION OR THE IMPROPRIETY OF THE MEANS OF DISCOVERY, HE MAY BE COMPELLED TO GO TO OTHER SOURCES FOR THE INFORMATION. AS STATED IN COMMENT A, EVEN THE RULE STATED IN THIS SECTION RESTS NOT UPON A VIEW OF TRADE SECRETS AS PHYSICAL OBJECTS OF PROPERTY BUT RATHER UPON ABUSE OF CONFIDENCE OR IMPROPRIETY IN LEARNING THE SECRET. SUCH ABUSE OR IMPROPRIETY MAY EXIST ALSO WHERE THE INFORMATION IS NOT A TRADE SECRET AND MAY BE EQUALLY A BASIS FOR LIABILITY. * * *"

TO THE SAME EFFECT SEE WARNER-LAMBERT PHARM. CO. V. JOHN J. REYNOLDS, INC., 178 F.SUPP. 655, 665-666. IN CONSONANCE WITH THAT CASE, NEITHERARDC REGULATION 80-8 NOR ARDC FORM 91 ARE CONDITIONED ON THE FACT THAT THE DISCLOSURE MUST HAVE BEEN "SECRET" IN THE LEGAL SENSE OF "TRADE SECRETS.' RATHER, WE THINK IT IS REASONABLY CLEAR THAT UNDER THE REGULATION IT IS THE POLICY OF THE AIR FORCE, AND THE PURPOSE OF THE UNSOLICITED DISCLOSURE PROCEDURE SET FORTH IN THE REGULATION AND FORM 91, TO TREAT ALL UNSOLICITED DISCLOSURES AS THOUGH THEY CONTAIN LEGALLY PROTECTABLE TRADE SECRETS.

ACCORDINGLY, YOU ARE ADVISED THAT OUR DECISION OF DECEMBER 22, 1960, MUST BE AFFIRMED.