This Day in Trade Secrets: In October 1859, New York Marble Maker Sues Over Disclosure of Marbleizing Methods

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: (1) the interface between patents and trade secrets; (2) the tension between maintaining confidentiality and revealing trade secrets as part of litigation; and (3) the availability of injunctive relief.

First, finding this to be a “somewhat novel subject,” the court struggled with how trade secrets law should interact with patent law.  The court was reluctant to grant trade secret protection in perpetuity, and was concerned about overstepping the bounds of federalism by acting in an area (patent law) where the federal government had already spoken:

“How, then, can the courts, in effect, secure an invention without a patent, and for a period of indefinite duration, instead of the limited time of fourteen years.  Besides, the jurisdiction ‘of securing, for limited times, to inventors, the exclusive right to their respective discoveries,’ is confided by the constitution to the general government. Can the state tribunals, then, assume the same function after the general government has acted on the subject?”

Second, the court, without modern tools such as protective orders under Federal Rule of Civil Procedure 26 at its disposal, expressed concern over how disclosure as part of litigation would affect the alleged trade secrets:

“[H]ow is the identity of two given things to be investigated, if we are not permitted to inquire what the given things are?  But the moment the investigation takes place, the secret vanishes — its exclusiveness is gone; and with the exclusiveness of the subject of the action, the action itself disappears.”

Finally, the court was concerned about granting injunctive relief, something that now, under the Uniform Trade Secrets Act, may be granted based on actual or threatened misappropriation:

“An injunction, therefore, (if any,) is not the appropriate remedy — it is obviously inefficient in practice and incapable of enforcement.  An action for damages would seem to be the only redress in such cases.”

Ultimately, the court denied Deming’s request to continue the preliminary injunction.

But unfortunately for Deming, this apparently wasn’t the end of his legal woes.  Roughly a decade later, it appears that he was removed as trustee for the New-York Marble Company for “gross misconduct.”  This was part of an ongoing dispute within the company that made the headlines of the day.

The case was Deming v. Chapman, 11 How. Pr. 382 (N.Y. Supreme Court, New York County, Oct. 1854).