Appeal from the Circuit Court of Cook County; the Hon. Arthur
L. Dunne, Judge, presiding.
JUSTICE JOHNSON DELIVERED THE OPINION OF THE COURT:
Plaintiffs, Edward Junkunc, Laddie Junkunc, and Helen Steirer, doing business as the General Machinery and Manufacturing Company (hereinafter General Machinery), brought an action against defendants, Stephen Junkunc IV and S.J. Advanced Technology and Manufacturing Corporation, in the circuit court of Cook County. Plaintiffs claimed that their process for manufacturing a type of fuel-nozzle seal for jet engines was a trade secret and that Stephen took the trade secret and used it to manufacture his own fuel-nozzle seals. Plaintiffs moved for a preliminary injunction against Stephen, ordering him to discontinue manufacturing and selling his fuel-nozzle seals. The trial court denied plaintiffs' motion. Plaintiffs appeal, contending that the trial court erred in denying their motion for a preliminary injunction.
The record shows that Edward and Laddie Junkunc and Helen Steirer are partners in General Machinery. Plaintiffs' manufacturing plant and offices are located in Chicago. Plaintiffs manufacture, inter alia, fuel-nozzle seals for jet aircraft engines and have done so since approximately 1956. Stephen's father, Stephen Junkunc III, was plaintiffs' brother and a partner in General Machinery.
All of the seals that plaintiffs manufacture are designed to fit jet aircraft engines made by the Pratt and Whitney Aicraft Division of United Technologies, Inc. (hereinafter Pratt & Whitney). Plaintiffs based the first seals that they manufactured on a design that Pratt & Whitney developed. Plaintiffs designated those seals as the DP-1 through the DP-14.
In the late 1950's and early 1960's, plaintiffs began developing a new seal of their own. The main innovation in their new design was that the circular sealing edges on both sides of the seal were sharp, like the edge of a knife. As such, the seal could cut into the surface of the engine manifold and the fuel nozzle, creating a leak-proof seal.
Stephen's father, Stephen Junkunc III, first suggested the idea of the knife edge. Stephen's father, with Laddie Junkunc and Louis Steirer (former chief engineer of General Machinery and husband of plaintiff Helen), created, designed, and developed the manufacturing process for the knife-edge seal. Plaintiffs manufactured the first knife-edge seal in 1976 and designated it as the DP-30.
A further innovation followed. "Nitriding" is a process of case-hardening steel by impregnating it with nitrogen. (Webster's Third New International Dictionary 1530 (1981).) In 1973, after two years of research and development, plaintiffs devised a process by which they could apply the nitriding process to only the knife edges and other specific areas of each seal. Plaintiffs designated this seal, which incorporated this selective hardening process, as the DP-37. Plaintiffs claim that the manufacturing process for the DP-37 is their trade secret.
Stephen worked at General Machinery from 1959 through 1979. He began as a tool-and-die apprentice and progressed to co-foreman of the air-products department. By the time that he resigned, Stephen made dies and gauges. Stephen was also responsible for the preparation of the checklists that contained the cutting dimensions, angles and radii of the tools necessary to produce the DP-37. He acquired knowledge of all aspects of plaintiffs' seal-manufacturing business and the manufacturing process of the DP-37.
Stephen's father died in 1978 and Stephen resigned from General Machinery in 1979. The parties agree that Stephen, upon leaving General Machinery, told his uncle, Laddie Junkunc, that he intended to establish a machine shop and that they did not enter into any restrictive covenants. There was conflicting testimony, however, whether Stephen told his uncle that he would manufacture seals in competition with General Machinery. Stephen formed S.J. Advanced Technology and Manufacturing Corporation within one year after leaving General Machinery's employ. Stephen's company did not operate actively until 1984, when it began manufacturing a seal comparable to the DP-14.
The United States Navy Aviation Supply Office solicited offers from both plaintiffs and Stephen for a contract to manufacture fuel-nozzle seals. In January 1985 plaintiffs learned that the Navy awarded the contract to Stephen's company. Believing that Stephen would use the information that he gained from plaintiffs to manufacture his seals, plaintiffs brought the present action.
Plaintiffs filed their complaint on April 12, 1985. They sought injunctive relief to (1) prevent Stephen from further using what plaintiffs allege to be their process in manufacturing his seals, (2) prevent him from selling the seals that he produced based on plaintiffs' process, and (3) require him to return to plaintiffs any documents containing plaintiffs' process for manufacturing the DP-37. Plaintiffs also sought $15,000 in compensatory damages in addition to costs and attorney fees. On the same day, the trial court entered a temporary restraining order preventing Stephen from disposing of or destroying any document containing the manufacturing process for the seals until it could hold a hearing on the preliminary injunction motion.
At the preliminary injunction hearing, plaintiffs claimed that their trade secret is not the design of the seal itself but, rather, the process required to manufacture the seal. Plaintiffs demonstrated how production of the DP-37 requires 58 steps, beginning with the creation of a disk from a stainless steel bar. Plaintiffs then use specially designed precision cutting tools to shape the disk. Plaintiffs claimed that the process consists of various phases and techniques that, when taken as whole, constitute their trade secret.
On July 1, 1985, the trial court denied plaintiffs' motion for a preliminary injunction and dissolved its temporary restraining order. The court found that plaintiffs failed to establish their entitlement to a preliminary injunction, specifically finding that they failed to prove the existence of a trade secret. The trial court also found no grounds on which to award damages, ...