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Andrea Dumon, Inc. v. Pittway Corp.

OPINION FILED NOVEMBER 9, 1982.

ANDREA DUMON, INC., PLAINTIFF-APPELLANT,

v.

PITTWAY CORPORATION ET AL., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County; the Hon. John F. Hechinger, Judge, presiding.

PRESIDING JUSTICE STAMOS DELIVERED THE OPINION OF THE COURT:

Plaintiff Andrea Dumon, Inc., brought this action in the circuit court for an injunction and for damages, alleging that defendant Pittway Corporation, through its division known as the Barr-Stalfort Company (Barr), misappropriated Dumon's secret processes and methods for the manufacture of an aerosol foam depilatory. The trial court held that the methods and processes were not protectable because they were not of such a special nature as to be trade secrets, and that Barr had been expressly released from the secrecy agreement between the parties because Dumon's manufacturing methods were commonly known in the industry at the time that Barr began to use them and to divulge them to others. Plaintiff appeals, contending that: (1) the trial court's finding that the manufacturing process was not a trade secret was against the manifest weight of the evidence; (2) the trial court erred in finding that Barr had not breached a fiduciary duty which existed apart from the secrecy agreement between the parties; (3) the trial court should have stringently tested the authenticity of two of defendant's exhibits before receiving them into evidence; (4) the trial court abused its discretion in allowing two of defendant's witnesses to testify as experts; (5) the trial court abused its discretion in allowing defendant's trial counsel to testify as a witness in the case without requiring him to withdraw; and (6) plaintiff was denied a fair trial due to the physical and mental infirmity of its trial counsel, who was terminally ill during the pendency and trial of this case.

Plaintiff is an Illinois corporation which was engaged in the sale of various cosmetic products. Defendant Barr manufactures and packages various aerosol products for others according to formulas and manufacturing procedures developed by Barr, its customers, or both. The events which culminated in this litigation began in March 1969, when Bernard Malits, plaintiff's president, entered into an agreement with Sam Rogers under which plaintiff purchased the rights to a formula and manufacturing process for an aerosol foam depilatory that Rogers had developed. In June of 1969, plaintiff and Barr entered into an agreement by which Barr would prepare and package a foam depilatory for plaintiff to be marketed under the trade name "Gone." The ingredients of the product were to be provided by plaintiff in coded containers and the exhibit to the manufacturing contract which set out the compounding instructions did not identify the ingredients other than by code name. The agreement provided that Barr would keep the "processes and methods set forth in said attached Exhibit A secret and in and of the strictest confidence." The agreement also provided that if those processes or methods "are or should become a matter of general knowledge within the industry, Barr's duty of nondisclosure hereunder shall then terminate." Although the agreement states that the pertinent exhibit was attached, the exhibit was not shown to Barr's officers until after the contract was signed. The exhibit reads as follows:

"Heat 2000cc distilled water or deionized water to 85C, then add solid Chemical X and stir until dissolved. Then add 1460cc cold water and stir a little. Then cool this mixture to 31 or 30° C. Then slowly add the calcium thioglycollate (240 grams) and stir mechanically for 10 minutes. The rpm rate of stirring should be between 1000 to 4000 rpm and less rpm if the blade is larger. After 10 minutes of stirring the above mixture, slowly add liquid chemical No. 3 and again stir for 10 minutes. After 10 minutes, add the perfume slowly and again stir for 10 minutes. The whole process should take 40 minutes after adding the calcium thioglycollate. Propellants 8% of 114-40% 12-60%."

Barr commenced production of "Gone" for plaintiff. Plaintiff had some difficulty in marketing the product as it was first compounded, because the original mixture removed hair slowly, had an unpleasant odor, and was irritating to the skin of users. Barr stopped producing "Gone" for plaintiff in 1970.

In 1971, Barr began packaging an aerosol foam depilatory known as "Take 3" for Depilan, Ltd. Three hundred thousand cans of this depilatory were eventually produced. The manufacturing procedure used for "Take 3" was similar to that used for "Gone," although the parties dispute whether the procedures were identical. In that same year, Barr furnished 5,000 cans of depilatory to Scholl, Inc., for test marketing in Europe. An agreement was contemplated by which Barr would supply Scholl with depilatory for sale in the United States and would provide Scholl with a formula and production method for Scholl's use in manufacturing a depilatory for the European market. Barr, in correspondence with Scholl, stated that it was providing the formula and production method "in confidence." No final contract was ever made between the companies and no secrecy agreement was entered into.

The names of the coded ingredients in plaintiff's formula were never revealed to Barr. It is undisputed that those ingredients were well known and commonly used in the manufacture of aerosol foam depilatories. Plaintiff's contention at trial and on appeal is that the method of manufacture, particularly the heating and cooling of the formula to the specific temperatures set forth in the exhibit to the agreement, prevents a valve clogging problem common to this type of product and that therefore this "process and method" of manufacture is a legitimate trade secret which Barr appropriated by using the process in the manufacture of subsequent products.

Defendant Morris Root, a chemist and the Barr vice-president who executed the contract with plaintiff, testified that he did not know what "processes and methods" meant in the context of the contract, but that he felt certain when the contract was entered into that the formula must have contained "secret ingredients," because he had been making depilatories using the same manufacturing procedure that was used for plaintiff for many years.

Sam Rogers testified for plaintiff that he had conducted many experiments while seeking to eliminate the valve clogging problem that had once been common to aerosol foam depilatories. He stated that 85° C was the optimum temperature for melting the first ingredient in the formula, because that ingredient, an emulsifier, will develop "bubbles" or "globules" if it is heated at temperatures a few degrees higher or lower. On cross-examination, Rogers stated that no bubbles appear at 75° C, but later stated that some bubbles are present if the emulsifier is heated to that temperature. He also stated that although 85° C was the best temperature, giving a specific temperature to the manufacturing workers was a matter of "picking one number" to put into the instructions.

Defendant's expert witnesses included Dr. Robert Sliwinski. Dr. Sliwinski testified that he had been working with aerosol products since 1959 and that he obtained a patent on a formula for an aerosol foam depilatory in 1967. In his patent he set forth instructions for manufacturing the product which were similar to the process at issue in this case. He did not attempt to patent the production method provided with his formula. Dr. Sliwinski's production method calls for heating the emulsifier to a range of 75° C or 80° C rather than to a specific temperature. He testified that the procedures set out in his patent were common practices among emulsion chemists, and that a range of heating temperatures between 65° C and 90° C would create no difference in the emulsion, although if a higher temperature was used a simple adjustment would have to be made to compensate for the evaporation of water in the mixture.

Dr. Paul Sanders, an organic chemist with experience in foam depilatories and the author of two books on aerosol technology, testified that a formula for an aerosol foam depilatory could be heated to within a range of temperatures with no difference in the product and that the temperatures to which the mixture is cooled is not important. Dr. Sanders stated that his answer to a contention that a functional depilatory could only be made by cooling and heating the formula to specific temperatures would be that such a statement was "nonsense."

Peter Cade testified that he was the Director of Research for Croda, Inc., which manufactures the emulsifier which is called "chemical X" in the plaintiff's formula. He stated that in order to make an emulsion from that product it was only necessary to heat the water to a fairly high temperature, melt the emulsifier, and add the emulsifier to the water with good agitation. He also stated that as long as the heating temperature is above the melting point of the emulsifier, it does not matter how high the temperature gets, so long as the water in the mixture does not boil.

Plaintiff's first contention on appeal is that the trial court's finding that plaintiff's methods and processes are not a protectable trade secret is against the manifest weight of the evidence. The judgment of a trial court sitting in a bench trial will not be reversed as being against the manifest weight of the evidence unless the appellant presents evidence so strong and convincing as to overcome the evidence existing in the appellee's favor. (Schoenberger v. Chicago Transit Authority (1980), 84 Ill. App.3d 1132, 1136, 405 N.E.2d 1076.) The trial judge sitting without a jury evaluates the credibility of the witnesses, and determines the weight to be accorded to contradictory testimony, and his findings are presumed to be correct. See Hill v. Hill (1979), 79 Ill. App.3d 809, 814, 398 N.E.2d 1048.

In the instant case, the trial court's findings of fact stated that "[p]laintiff's procedures, methods and processes employing particular temperatures were not of such a special nature so as to possess a protectable value." A manufacturing ...


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