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Adolph Gottscho Inc. v. Bell-Mark Corp.

Decided: May 3, 1963.

ADOLPH GOTTSCHO, INC., A CORPORATION, PLAINTIFF,
v.
BELL-MARK CORPORATION, A CORPORATION OF NEW JERSEY, JOSEPH MASTRACCHIO, LEONARD GUIDA, AND ANDREW J. ALESSI, JR., DEFENDANTS



Herbert, J.s.c.

Herbert

[79 NJSuper Page 157] Adolph Gottscho, Inc. charges that its trade secrets have been improperly used or dealt with by the

defendants, and it seeks relief by injunction or damages or both. The products made and sold by Gottscho are marking machines. Although the machines vary enough in size, design and method of use to make any summary descriptions subject to exceptions, they may be described in general terms as small printing machines designed and used to imprint a brief legend of some sort upon a container of products, or a product, as it comes off an assembly line. The process used is called "Flexography," a term adopted by an organization known as the Packaging Institute.

Proof was offered at trial that in recent years (as every consumer knows) there have been great increases in the practice of marketing goods in manufacturers' packages, and this growth has created an extensive demand for devices which will print upon a package at the time it is filled and closed for shipment. The information printed may be only the date of packaging, or it may be somewhat more extensive, but usually it will be in the nature of a last-minute legend to supplement the regular printing which has been placed on the container by other means. An informative short description of Flexography, its dependence upon quick-drying inks, its uses and the functions of machines like those of the plaintiff can be found in Wolfe, Printing and Litho Inks (5 th ed. 1957), pp. 331 and 336.

The Gottscho company has made itself a leader in the marking machine business. The defendant Bell-Mark Corporation is in direct competition. It sells and offers for sale a line of marking machines designed to do essentially the same work as comparable Gottscho machines. The Bell-Mark business was commenced in 1959, long after the Gottscho business was established. Gottscho claims the right to equitable protection against the use in Bell-Mark's machines of a number of features which Gottscho says it originated and used before Bell-Mark entered the field. Gottscho also contends that the defendants other than Bell-Mark are in one way or another answerable in equity for contributing to Bell-Mark's use of Gottscho's trade secrets.

The trial was exceptionally long. Over three months elapsed between the swearing of the first witness and the close of the last one's testimony. Several hundred exhibits were received, consisting of drawings, machines and parts of machines as well as documents. The complexities of the case were due in part to the number of trade secrets claimed by the plaintiff and to the period of years over which the testimony had to range in order to develop and contest those claims. However, I think the complications of the case and the length of the trial resulted in part from uncertainties in this field of the law, uncertainties about what a plaintiff must show to become entitled to relief. See Ellis, Trade Secrets, c. 1.

All of the plaintiff's claims to trade secrets depend upon physical characteristics of Gottscho machines. Although this generalization is not intended to rule out the effect of physical characteristics upon functioning, it is of some importance to note that this case does not involve manufacturing processes which remain inside the plant when a machine is shipped (e.g. Sun Dial Corp. v. Rideout , 16 N.J. 252 (1954)), or chemical formulae so well hidden in a marketed product (e.g. Colgate-Palmolive Co. v. Carter Products, Inc. , 230 F.2d 855, 863 et seq. (4 Cir. 1956)) that they remain unknown even in the laboratories of competitors.

I think the first question to be answered is this: Are those characteristics of Gottscho machines which are urged as a basis for equitable relief secrets in the dictionary sense of something kept from the knowledge of others, or revealed only to a few? Though the answer will not dispose of the case, it will be an important step toward a decision.

Machines incorporating the features for which the plaintiff seeks protection have been sold and offered for sale on the open market. Particular machines have been sold by the thousands, while other machines have been designed for a smaller market or have received a much less cordial reception from customers. My conclusion is that those characteristics of its products on which the plaintiff's claims to "trade

secrets" rest are not secret in the dictionary sense. This, in turn, is based upon the conclusion that the characteristics in question have been disclosed in the plaintiff's own machines and thus made available for copying or imitation by anyone interested enough to employ a generally skilled technician to make an inspection and take measurements.

I will not discuss each and every machine feature on which the plaintiff bases a claim to a trade secret. However, a few may be referred to as examples: Marking devices are commonly mounted near the end of a manufacturer's assembly line. The packaged product will pass the device on a conveyer belt or set of rollers, being imprinted as it passes. The marker can be mounted by fastening it to the frame of the conveyer. Some are "double hung," i.e. , are fastened to both sides of the conveyer frame so that the package or product to be marked passes between the mountings of the marker. Others are "overhung" by having a mounting only on one side of the conveyer frame. These differences of mounting may be made obvious by comparing the conventional double-hung window, which slides up and down in a frame, to the casement-type of window which is hinged along one side and swings outward or inward on those hinges.

The mounting of a marking machine on a conveyer line has considerable practical importance because of the need to make adjustments, change printing type, replenish ink supply, and the like. There are advantages to the overhung mounting, and the plaintiff claims its use of that mounting is a trade secret. Secrecy in the dictionary sense is not present, however; anyone with an interest in the style of mounting can see at a glance the essential outlines of the overhung model, and I am satisfied that anyone with a general skill in designing machinery, having seen it, could successfully reproduce it. The advantages of the overhung mounting would also be readily apparent to an observer having knowledge of marking practices and problems in the packaging industry.

Other features of Gottscho machines, claimed as trade secrets, though less obvious, are still open to the world in the

units which have been sold. Many of the models have three rollers. One furnishes the ink supply, another carries the type face and does the printing, while the third one is located between the other two and has the function of transferring the ink smoothly and in proper amounts to the printing roller. To be able to adjust the amount of pressure between the surface of this transfer roller and the other two rollers is important. The plaintiff has secured a degree of adjustability by giving its transfer rollers an off-center or eccentric mounting. This feature is claimed as a trade secret. I have no doubt that a good mechanic, examining such a model, would recognize the eccentric mounting. He could then duplicate it. The ...


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