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Crowe v. M & M/Mars

Decided: July 11, 1990.

THOMAS CROWE, PLAINTIFF-APPELLANT,
v.
M & M/MARS, A DIVISION OF MARS INCORPORATED, DEFENDANT-THIRD-PARTY PLAINTIFF, RESPONDENT-CROSS-APPELLANT, V. SPARTAN DESIGN INCORPORATED, THIRD-PARTY DEFENDANT-CROSS-RESPONDENT



On appeal from the Superior Court, Law Division, Morris County.

Michels, R.s. Cohen and Brochin. The opinion of the court was delivered by R.s. Cohen, J.A.D.

Cohen

[242 NJSuper Page 594] If a person is employed to invent for the employer, a resulting invention belongs to the employer. If a person who is employed to perform other functions conceives and develops an invention during working hours with the aid of fellow employees and with the use of the employer's materials and machinery, the invention belongs to the employee but the employer has

an irrevocable but non-exclusive right to use it. This is the "shop right" rule. Kinkade v. N.Y. Shipbuilding Corp., 21 N.J. 362, 369, 122 A.2d 360 (1956); United States v. Dubilier Condenser Corp., 289 U.S. 178, 53 S. Ct. 554, 77 L. Ed. 1114 (1933), opinion amended in an immaterial respect, 289 U.S. 706, 53 S. Ct. 687, 77 L. Ed. 1462 (1933); 9 Williston on Contracts, ยง 1016, p 111 (3rd ed. 1967). The issue presented by this case is whether the shop right rule defeats an action to recover in quantum meruit for a manufacturer's use of a device invented by a person who was not employed by the manufacturer but whose employer placed him in the manufacturer's plant on a long-term basis, at the manufacturer's request and expense, to work with employees of the plant to serve its needs. We hold that the shop right rule does apply, and that therefore the Law Division judge properly granted the manufacturer's motion for summary judgment.

In deciding defendant's motion, the Law Division judge accepted, as he had to do, the following facts favoring plaintiff's claim.

Plaintiff Thomas Crowe is a licensed mechanical engineer, employed by third-party defendant, Spartan Design. Spartan had an on-going contractual relationship with defendant M & M/Mars for Spartan to furnish engineering and design personnel from time to time at M & M/Mars's plant as needed to assist in various M & M/Mars engineering projects. The personnel were intended to remain independent contractors or Spartan employees, but not to become employees of M & M/Mars. They were paid by Spartan which billed M & M/Mars, and they had no employment contract with M & M/Mars.

Plaintiff Crowe was at M & M/Mars' plant from February 1, 1983, through June 3, 1985, engaged in various projects having to do with plant maintenance and production machinery. While much of plaintiff's daily work was self-directed, he worked with

M & M/Mars personnel and under an M & M/Mars employee, Wayne Najduch.

One of the projects which occupied plaintiff was Project 131. It was a continuous system designed to spray a chocolate coating onto various candies. The Project 131 team included M & M/Mars employees and representatives of Omni Systems, Inc., which had produced components of the chocolate spray system. Plaintiff's first assignment as a member of the Project 131 team was to design a spraying arm compatible with the spray tub into which the candies went to be coated.

Significantly impeding satisfactory production on the chocolate spray system were the continually failing pumps. There were twelve of them, furnished by Omni Systems. They were a constant problem, an object of repeated improvement attempts by the team, and one of plaintiff's functions was to increase the production achieved by the pumps. After a particular team meeting at which the shortcomings of the pumps were a central discussion issue, plaintiff focused his work efforts on improving them, with the approval and under the direction of Wayne Najduch.

Plaintiff conceived of a new pump -- not an alteration of the Omni pump, but a new design. His initial idea came to him at home. He went to Najduch and told him he thought he could design a better pump. Najduch told him to submit some drawings for review. Najduch approved the drawings and had plaintiff go to Henry Schwager, an M & M/Mars machinist, to fabricate a prototype. The drawings and fabrication utilized M & M/Mars personnel, materials and machinery, and also plaintiff's time for which it was paying Spartan.

Two prototypes were built and installed in the chocolate spray system. They worked so well that M & M/Mars decided to switch over completely to the newly designed pumps. Omni Systems built the new pumps. As a result of ...


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