One hundred and fifty-four years ago this month, New York marble marker Egbert Deming sued Ezra Chapman, seeking to prevent him from disclosing a secret method for making artificial marble. Chapman had agreed in writing not to disclose the secret, but sought to get out of his promise.
Although marble has been used in sculpture for millennia, it appears that the method of making artificial marble in question was, at that time, relatively new. The court observed that, at least according to the defendant, “the art of making artificial marble” was invented by “a person of the name of Hardinge” (possibly Benjamin Hardinge), who, in 1850, communicated the secret method to Williams, who later communicated that method to Deming.
The case is interesting because it shows how courts initially grappled with some fundamental questions that are now more routinely addressed in trade secret cases: Read More
One hundred and sixty-five years ago in New York, Albert Bagley filed one of the first trade secret cases in modern times (if Lexis is to be believed) against his former employee Charles Peddie. In Bagley v. Peddie, 16 N.Y. 469 (1857), Bagley claimed that Peddie had breached an agreement not to disclose Bagley’s secrets for making gold pens.
The trial court dismissed Bagley’s case for failing to prove special damages, but New York’s high court reversed. The court held that Bagley’s failure to prove damages wasn’t the end of the story, because Peddie had agreed to pay $3,000 in liquidated damages if he breached the agreement. The court found the provision enforceable because it was otherwise impossible to determine what damages Bagley sustained from entrusting his trade secrets to an employee who subsequently leaves, reveals the secrets to others, or embezzles his materials. Read More
On this day in 1979, the National Conference of Commissioners on Uniform State Laws approved the Uniform Trade Secrets Act (UTSA) and recommended it for enactment in all states. The act was amended once, nearly six years to the day later, on August 8, 1985.
The law’s Prefatory Note gives some context for how it came about:
“Notwithstanding the commercial importance of state trade secret law to interstate business, this law has not developed satisfactorily. In the first place, its development is uneven. Although there typically are a substantial number of reported decisions in states that are commercial centers, this is not the case in less populous and more agricultural jurisdictions. Secondly, even in states in which there has been significant litigation, there is undue uncertainty concerning the parameters of trade secret protection, and the appropriate remedies for misappropriation of a trade secret….
The Uniform Act codifies the basic principles of common law trade secret protection, preserving its essential distinctions from patent law….
On this day in 1922, the New York appellate division granted magician Horace Goldin an injunction against Clarion Photoplays, Inc., preventing it from disclosing in a motion picture his trade secret for “Sawing a Woman in Half.”
The trial court record included an affidavit by Harry Houdini, who testified that this trick did indeed originate with Goldin:
“Harry Houdini, a producer of magical feats and illusions since 1882, and president of the Society of American Magicians and of the Magicians’ Club of London, states that, so far back as his memory and records go, he is positive that he never witnessed a production of the illusion ‘Sawing a Woman in Half’ by any one other than the plaintiff.”
The appellate court credited this and other affidavits, and rejected the defense that this trick actually originated in ancient Egypt: Read More