had suggested; that it had obtained a supply from another company
the fall before; and that it would continue to purchase equipment
from TOM Co. on a competitive basis. April 4, 1956, Schulenburg
answered that they were willing to continue to refer all
inquiries to ASI on equipment for "Double T" signs but that IBM
was getting very strong in the field; that they were going to do
some more engineering work and then would announce to the sign
trade that they were going to supply this type of time and
temperature control; and that they would be happy to have ASI
continue to purchase their equipment.
April 27, 1956, Greek Wells wrote TOM Co. that they were
infringing upon ASI's patent rights and utilizing confidential
information, and if they did not desist ASI would bring suit for
damages. On June 18, 1956 ASI's attorney, Cameron Sherwood, again
threatened suit upon the basis that TOM Co. was a confidential
manufacturing agent, and was infringing on ASI's patent.
October 21, 1956, TOM filed the declaratory judgment suit, and
October 31, 1956, ASI filed its action.
This brings forward the first issue as to whether there was an
oral contract between TOM Co. and Williams Bros., Inc. to buy and
sell exclusively equipment for the "Double T". ASI stated in its
brief "Plaintiff does not contend and has never contended * * *
that Schulenburg said he will sell this exclusively to us." ASI
argues that since Schulenburg promised to refer all inquiries
which TOM Co. received to Williams Bros., Inc. that it was the
equivalent of an agreement to sell the equipment exclusively to
Williams Bros., Inc. This conclusion by the ASI is illogical.
From all the correspondence*fn3 it is obvious that TOM Co. never
made this exclusive agreement. Charles Williams understood this
when he wrote the letters of July 18, 1952 above referred to.
Luke Williams wrote a letter on August 22, 1952, to Sutphin in
which he also expressed his understanding that there was not an
exclusive agreement. In this letter he expressly stated: "we
would surely never ask you not to sell anyone a mechanism." From
all the evidence it is apparent that Williams Bros., Inc. was
relying upon its patent rights and not upon an exclusive
agreement. Furthermore, the acts of the parties after the
original meeting between Schulenburg and the Williams brothers
negates any such exclusive arrangement. The only conclusion that
can be reached considering all the evidence in this case is that
there was no such exclusive contract, either express or implied.
The second issue presented is whether there was a confidential
relationship between Williams Bros., Inc. and TOM Co. It must be
noted that TOM Co. was selling electrical control equipment to
various sign companies for some years prior to any contact by
Williams Bros., Inc. Williams Bros. Inc. had inquired about and
received information concerning TOM Co's equipment. On May 25,
1951, when Charles Williams telephoned Sutphin he wanted to know
if TOM Co.'s equipment could be so combined to display time and
temperature on a single bank of lights and, if so, what it would
cost. There is insufficient evidence to find that the Williams
brothers had a definite sketch of a sign displaying time and
temperature on one panel at the time of the call to Sutphin.
Williams brothers had photostats made of the sign for the Bank in
the latter part of June, 1951. On June 26, 1951 they gave Greek
Wells, their attorney, a photostat of this sign to obtain a
copyright and the design was registered in the United States
Copyright Office July 31, 1951. No rights are claimed nor can be
established by this registration. A "work of art" is registered
without search and the registration is perfunctory. Stein v.
Expert Lamp Co., 7 Cir., 1951, 188 F.2d 611, 612. The idea of
displaying time and temperature upon the same panel was then made
public. 17 U.S.C.A. § 212. "`[K]nowledge cannot
be placed in the public domain and still be retained as a
"secret".'" Skoog v. McCray Refrigerator Co., 7 Cir., 1954,
211 F.2d 254, 257. At the time of the communication with Sutphin
there was no confidential disclosure. Charles Williams merely
requested a quotation of cost in the event that TOM Co. could
combine their equipment. TOM Co. had not solicited the inquiry.
"Certain it is that a non-confidential disclosure will not supply
the basis for a law suit." Smith v. Dravo Corp., 7 Cir., 1953,
203 F.2d 369, 376. At the time of the meeting with Schulenburg on
September 21, 1957, at the Camlin Hotel in Seattle, with Emden
representing Northwestern Agencies, Inc., present, the Williams
brothers made no effort to treat the "Double T" as a confidential
disclosure, nor could they after the registration in the United
States Copyright Office on July 31, 1951. From all of the
evidence the only restraint on the sale of the "Double T"
equipment was that there was an application for patent pending
and that anyone who might attempt to duplicate the equipment or
use it would be infringing upon the patent. The Williams brothers
were claiming a patent before their patent application was filed.
ASI was leasing its signs, containing TOM Co. equipment, to
various banks on some kind of an exclusive basis. Whether the
provisions of the leases are valid or invalid this court is not
required to determine. Neither TOM Co. nor TOM were parties to
these leases. The evidence does not disclose that they were
informed of the terms of the leases, nor of the identity and
location of the lessees. It was TOM Co. that informed the
Williams brothers of a method by which TOM Co.'s equipment for
displaying time and temperature could be combined on a single
bank of lamps, and furnished diagrams for wiring the first sign.
Williams brothers even obtained the information as to how to lay
out the lamp bank from TOM Co. No charge was made for engineering
the equipment to display time and temperature on the same panel.
The order for equipment on October 19, 1951 was made through
Coastal Sales, Inc. and not direct to TOM Co. ASI was enabled to
obtain profits from the equipment through the assistance and
efforts of TOM Co.
Had there been a violation of confidential relationship as
alleged by ASI it would have occurred in Illinois. This count of
its complaint rests jurisdiction upon diversity of citizenship.
The law of conflicts and torts would be governed by the law of
Illinois, the place of the wrong, if any. Smith v. Dravo Corp., 7
Cir., 1953, 203 F.2d 369. In Victor Chemical Works v. Iliff,
1921, 299 Ill. 532, 548, 132 N.E. 806, 812, the court set forth:
"The burden of proof * * is upon the complaining party." The
proof must establish (1) existence of trade secret owned by the
plaintiff; (2) communicated to the defendant; (3) while the
defendant was in position of trust or confidence; (4) and that
the defendant used the trade secret to the detriment of the
plaintiff.*fn4 Charles Williams had only the idea of displaying
time and temperature on the same panel at the time he telephoned
Sutphin. He had no definite plan how to accomplish the result.
ASI now claiming the right to this action, has failed to prove
that Williams Bros., Inc. had a trade secret or that this idea,
which had not as yet jelled to definiteness, was communicated to
TOM Co. through Sutphin while TOM Co. was in a position of
confidence. There was no order placed with Coastal Sales or TOM
Co. until October, 1951. The facts disclosed in Jones v. Ulrich,
1950, 342 Ill. App. 16, 95 N.E.2d 113, are distinguishable. There
the defendant operated a welding shop and did repairs on all
types of machinery. Plaintiff employed the defendant to construct
the new attachment to be used in spreading pulverulent material.
After disclosing all the details of his plan plaintiff spent an
entire day in the defendant's shop directing and superintending
the defendant and his employees in the construction
of the attachment. The device was then mounted on plaintiff's
truck and plaintiff paid defendant for his services. The court
has examined the cases cited by ASI but none are persuasive on
the facts in the instant case. It was TOM Co. that exercised the
"know how" and charged nothing for their engineering service.
Schulenburg instructed the Williams brothers at the first meeting
in September, 1951, as to the manner of constructing the lamp
bank. TOM Co. when they shipped the units enclosed therewith the
wiring diagrams showing how the units would be combined to
illuminate the lamp bank. It must be concluded that ASI has
failed to prove a confidential relationship.
The validity of the patent must next be determined. The patent
is entitled "Display Sign." "The * * * invention relates to
display signs and is particularly directed to a display sign
wherein the correct time and temperature are alternately given at
Elements in Claim I are:
1. A display sign comprising a bank of lamps,
(a) appropriate lamps to
(1) display time, and
(2) display temperature.
2. A source of current supply.
3. Two circuit controlling devices for connecting and
disconnecting current supply to said lamps.
4. Two control devices:
(a) one being time controlled to energize at
different intervals appropriate lamps for time
(b) one being temperature controlled to energize at
appropriate intervals lamps for temperature
(1) Each control device comprising spring closed
contacts for the lamps used in spelling out its
5. Continuously operable cams positioned to lift the
individual contacts to leave the correct combination of contacts
6. Rocker bars beneath each group of spring closed contacts
operable alternately to lift all of one group together, then all
the other group together.
Claim 2 is limited to display time and temperature with a means
responsive to time and temperature change blanking out the screen
during the change.
Claim 3 is broader and does not limit the mechanism to time and
A reading of the patent discloses that it is not based upon the
general design of displaying time and temperature on a single
bank of lights. Wells the patent attorney so testified. Counsel
for ASI stated, "that all of the elements were old," but
nevertheless contends that the design of the "Double T" was new.
However, the design of the "Double T" for the Bank was published
by registration in the United States Copyright Office more than
one year prior to the filing of the application for patent on
December 19, 1952. Counsel for ASI maintain that the registration
could not be considered as prior art since no notice of it was
given. Since ASI made no objection when it was admitted in
evidence it waived the notice. Monroe v. Bresee, 7 Cir., 1917,
239 F. 727. As a matter of law the general idea of the "Double T"
was not patentable, but the disclosure of the device, "in
sufficient detail to enable one skilled in the art to practice
the invention once the period of the monopoly has expired" was
patentable. Universal Oil Products Co. v. Globe Oil & Refining
Co., 322 U.S. 471, 484, 64 S.Ct. 1110, 1116, 88 L.Ed. 1399. ASI
"In evaluating patentwise a combination, we must
look to the novel connections between the elements,
and the novel connection as set forth in the claim is
connecting the lights of a lamp bank individually to
spring loaded contacts of a time clock and a
thermometer unit with means [i.e. lifter bars] for
raising all of the contacts of one unit for a short
period of time while the other unit has its spring
loaded contacts connected to the lamps, and then
alternating these connections at selected intervals."
There was no substantial change in the control mechanisms to
accomplish the expected result of displaying time and temperature
on the same bank of lights. TOM Co. by their drawing suggested an
individual standard clock and thermometer control on base plates
three inches wider than usual. The contacts on the controls were
removed and standard spring contacts used from their standard
flasher. The tails of these contacts, which were longer, extended
out so that the lifter bar beneath the tails could lift all
contacts at one time. A standard flasher with two contacts to the
solenoid motors which alternately energize the lifter bars were