E. I. DU PONT DE NEMOURS POWDER COMPANY ET AL.
v.
MASLAND ET AL.

U.S. | 1917-05-21
No. 210
244 U.S. 100 Supreme Court of the United States (1917) Caution
Also reported at: 61 L. Ed. 1016 · 37 S. Ct. 575 · 1917 U.S. LEXIS 1614 · SCDB 1916-062
Cited by 130 cases

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Synopsis

DuPont sued to enjoin a former employee from using or disclosing secret manufacturing processes he had learned during his employment, and the defendant sought to disclose these secrets to expert witnesses to prepare his defense. The Supreme Court held that while the defendant could not be absolutely prevented from defending himself, the injunction against disclosing the trade secrets was proper based on the duty of good faith arising from the confidential employment relationship, with the trial judge having discretion to permit disclosure to others only if necessary and appropriate. The Court established that trade secrets protection rests fundamentally on a duty of confidence accepted by an employee, rather than on property rights, and that such duties survive the end of the employment relationship.


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Opinion of the Court
Mr. Justice Holmes

Mr. Justice Holmes delivered the opinion of the court.

This is a bill to prevent the defendant Walter E. Mas-land 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 tne 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.


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Citator

Cited By (36 total)

  • Ruckelshaus v. Monsanto Co., 467 U.S. 986 (U.S. 1984)
    …gislative history merely as one more illustration of the general perception of the property-like nature of trade secrets. Contrary to EPA's contention, Brief for Appellant 29, Justice Holmes’ dictum in E.I. du Pont de Nemours Powder Co. v. Masland, 244 U. S. 100 (1917), does not undermine our holding that a trade secret is property protected by the Fifth Amendment Taking Clause. Masland arose from a dispute about the disclosure of trade secrets during preparation for a trial. In his opinion for the Court, t…
  • Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (U.S. 1974)
    …in accord with prior cases of this Court. Universal Oil Co. v. Globe Co., 322 U. S., at 484; United States v. Dubilier Condenser Corp., 289 U. S., at 186—187; Becher v. Contoure Laboratories, 279 U. S. 388, 391 (1929); Du Pont Powder Co. v. Masland, 244 U. S. 100, 102 (1917); Dr. Miles Medical Co. v. Park & Sons Co., 220 U. S. 373, 402-403 (1911); Board of Trade v. Christie [*493] Grain & Stock Co., 198 U. S. 236, 250-251 (1905).23 Trade secret law and patent law have co-existed in this country for over one…
    1 / 2
  • Becher v. Contoure Labs., 279 U.S. 388 (U.S. 1929)
    …t .matter of Oppenheimer’s claim was an undisclosed invention which did not need a patent to protect it from disclosure by breach of trust. Irving Iron Works v. Kerlow Steel Flooring Co., 96 N. J. Eq. 702. Du Pont de Nemours Powder Co. v. Masland, 244 U. S. 100. Oppenheimer’s right was independent of and prior to any arising out of the patent law, and it seems a strange suggestion that the assertion of that right can be removed from the cognizance of the tribunals established to protect it by its opponent…

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