The opinion of the court was delivered by: FORMAN
This is a suit brought to have defendant declared a trustee ex maleficio of fourteen United States letters patent
and corresponding foreign patents now owned by defendant, and to compel defendant to assign the patents to plaintiff, and to account for all profits derived from the use of the inventions covered by the patents. An injunction is sought restraining defendant from assigning or granting licenses under the patents and from further contesting a certain interference proceeding now pending in the United States patent office involving one of the patents owned by defendant and a patent application filed by plaintiff.
As submitted to this court the suit is based upon the claim of Eugene R. Smoley that he disclosed the "fundamental idea" upon which all of the patents involved are based to employees of defendant under circumstances from which an obligation on the part of defendant not to make use of that idea without plaintiff's consent must be inferred, the "fundamental idea" referred to, beind the idea of applying the principle of rectification to separation of metals, particularly zinc, cadmium and lead.
Previous to the alleged conception of this idea it had been the practice to make fine degrees of separation of various fractions of petroleum hydrocarbons, such as gasoline, benzene, kerosene, etc. by distillation and rectification, but it had been impossible to separate zinc from traces of lead and cadmium by normal metallurgical practice.
Smoley's alleged idea of rectifying metals may be described as a process using a vertical column consisting of horizontal plates in the interior. A boiling point is maintained at the bottom of the column, and a condensing point is maintained at the top of the column, permitting vapors to pass countercurrent up the tower, through apertures in the horizontal plates, with liquid coming down and scrubbing the rising vapors. The lower boiling point constituent of the distillate is continuously removed from the top, and in the same manner the higher boiling point constituent is removed from the bottom of the tower.
It is the testimony of the plaintiff that in the spring of 1928, while attending a class in distillation at Massachusetts Institute of Technology "the idea flashed into my mind * * * of applying the principle of rectification to separation of metals".
The first thing Smoley did after the idea came to him was to bring it to the attention of Professor Williams in the Metallurgical School, asking his advice as to the commercial possibilities of the idea, and asking whether in Professor Williams' opinion the idea would be a fit subject for Smoley's doctoral thesis. Encouraged by Professor Williams, Smoley, who had worked for the New Jersey Zinc Company from 1918 to 1923 and was familiar with the metallurgy of zinc and its literature, turned his mind to the possibility of separating zinc from cadmium. He looked up in the available literature the vapor pressures, solubilities and physical properties of zinc and cadmium. He then made some calculations from the vapor pressures, and plotted an X-Y diagram showing the liquid vapor relationship of the components. Following this, he calculated by stepwise calculation "the number of theoretical trays (horizontal plates) for certain feeds to obtain certain purity cadmium overhead and certain purity zinc bottoms in a rectifying tower". As a result of these calculations he became "more certain" that zinc and cadmium could be separated by rectification.
Smoley finished his class work in connection with his master's degree, and with the aim of obtaining financial support which would enable him to carry out his doctoral thesis work on this problem, he planned and carried out a trip beginning about June 1, 1928, which included visits to New York, Washington, D.C., and Palmerton, Pennsylvania, where defendant's plant is located. It was during the period covered by this trip, according to Smoley, that the alleged disclosure upon which this suit is founded were made to various employees of defendant.
Smoley also testified that he told Holstein that he was on his way to Washington, and asked Holstein to suggest a patent lawyer located there. As a result of Holstein's recommendation Smoley communicated with Richard L. Scheffler, a patent lawyer in Washington, and told him: "* * * that Mr. Holstein had suggested his name in regard to an idea that I wished to explore further, * * * and I wished to consider it as a Doctor's thesis for experimental work and wished to develop the idea to a point of taking out a patent".
Following this Smoley proceeded to Palmerton, Pennsylvania, where he stayed at the home of Adolph Kummer, an old friend, who was assistant superintendent of defendant's lithopone plant. According to Smoley the first thing he did was to discuss "this new invention of mine", asking Kummer among other things whether he thought he, Smoley, "ought to work it for my Doctor's thesis, and whether he thought I could get the research department to finance such a project".
Continuing, Smoley testified that Edmund J. Flynn, who was at that time superintendent of defendant's lithopone plant and Kummer's immediate superior, joined them at Kummer's home later in the day. He states: "I went into considerable detail with Mr. Kummer and Mr. Flynn developing to them the idea that I had in mind. I made sketches of the tower, I drew in similar fashion to the sketches that were submitted for Mr. Scheffler the X-Y diagram and the steps and explained just how you would obtain this separation of zinc and cadmium as an illustration". According to Smoley there was a discussion of various other matters such as the type of tower, the type of trays, materials of construction, and the heating and condensing units.
On the following day Smoley states that he conferred with Earl H. Bunce, general manager of the Technical Department of the New Jersey Zinc Company. "I told him that I was short of funds and that the purpose of my visit to him was to attempt to get financing for my equipment for my thesis, and a monthly stipend for living. I told him that I had this new idea of rectification and separation of metals and told him that I * * * wanted the opportunity to continue that work on that problem as my Doctor's thesis. Mr. Bunce stated that he would consider this proposition."
Asked to tell as nearly as he recalled how he described his idea to Bunce, Smoley said: "I described it as a process for separating metals by rectification, using the column, boiling at the bottom, condensing at the top, vapors pass countercurrent up the tower with liquid coming down the tower, and taking overhead the lower boiling point constituent of the product, taking off the bottoms the higher boiling point constituent".
According to Smoley, he discussed with Bunce the purification of slabs of the western slab zinc containing cadmium and lead as impurities, but he made no sketches to illustrate the idea to Bunce.
The interview with Bunce ended with a statement by Bunce that he would consider Smoley's proposition and communicate his decision by letter, and with the suggestion that Smoley see certain other men in the research department, particularly Willis M. Peirce and George F. A. Stutz, in order to enable them to form an opinion as to the desirability of re-employing Smoley at the end of his school work.
Smoley testified that following Bunce's suggestion he sought out Peirce, chief of defendant's research department, and Stutz, who was also associated with defendant's research department. He says that he did not mention his idea to Stutz. As to his conversation with Peirce, Smoley testified: "* * * I told him about my proposition or consideration of trying to get the New Jersey Zinc Company to finance me for this work at M.I.T., told him I had completed my Master's degree and was considering going back to take the Doctor's degree, ...