The opinion of the court was delivered by: Brotman, District Judge.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Presently before the court is plaintiff Campbell's
application for a preliminary injunction for misappropriation
of trade secrets, breach of contract, tortious interference
with a contract and breach of fiduciary duty. Campbell seeks to
enjoin defendants ConAgra and Rosenthal from using and
disclosing Campbell's trade secrets and other proprietary and
confidential information relating to the process for making a
low calorie frozen food product which has the texture, taste
and appearance of fried food, but which has never been fried.
Campbell also seeks to enjoin ConAgra and Rosenthal from using
or exploiting a patent allegedly based on Campbell's trade
secrets. Hearings were held from August 27, 1991 until
September 4, 1991. After considering the evidence presented and
the arguments and submissions of counsel, the court makes the
following findings of fact and conclusions of law.
1. Plaintiff Campbell Soup Company (Campbell) is in the
business of selling, manufacturing and developing food
products. It markets its frozen food products under the
trademarks "Swanson," "Mrs. Paul's," and "Le Menu Healthy."
3. Defendant Sallie Rosenthal (Rosenthal), formerly Sallie
O'Brien, received a B.S. in Food Science from Cornell
University in 1979, and a M.S. in Food Science from Cornell in
1981. On March 5, 1984, Campbell hired Rosenthal as a Product
Development Technologist in the Poultry Product Development
section of Campbell's research facility in Camden, New Jersey.
4. As a condition of her employment at Campbell, Rosenthal
was required to execute a Patent-Trade Secret Agreement
Relating to Inventions, Business Ideas and Trade Secrets. The
Agreement prevented Rosenthal from using any trade secrets,
inventions or business ideas which she conceived or to which
she was exposed while working for Campbell if those ideas were
used by or useful to Campbell. She was also required to keep
all Campbell's trade secrets strictly confidential. The
Agreement further vested Campbell with the exclusive right to
all inventions and business ideas conceived by Rosenthal within
one year following her termination of employment provided such
inventions and ideas resulted from and related to her work for
Campbell. The Agreement defined Campbell's trade secrets to
include such things as recipes, manufacturing processes,
research results and manufacturing layouts.
5. In the late 1970s, Campbell began an internal research and
development program directed to the development of a
nutritional frozen food product which was later identified as
"Never Fried Chicken". In forming some of the "Never Fried
Chicken" samples, Campbell's research personnel worked on and
developed a product wherein skinless chicken was first injected
with a phosphate solution and then coated with a predust layer.
The predusted product was then covered with a batter. Next, a
bread crumb mixture containing 13% encapsulated or beaded
shortening and known as Japanese bread crumbs was applied.
Liquid margarine or oil was then sprayed or misted onto the
bread crumb mixture to form the coating of the "Never Fried
Chicken." The battered and breaded product was then passed
through a high temperature humidified oven or multi-purpose
oven (MPO) for baking.
6. Campbell assigned Rosenthal to work on the "Never Fried
Chicken" project. Rosenthal set forth formulas and procedures
to be used on at least five different scale-up runs of the
"Never Fried Chicken" project at Campbell's Farmington pilot
plant. The process involved no frying and was intended for a
product that was to be frozen after it was cooked so that the
consumer could buy it in its frozen state and reheat it for
7. On June 5, 1984, Rosenthal wrote a memorandum to
Campbell's marketing group identifying the following concepts
at Campbell as unique:
a. the use of encapsulated fat and a margarine spray to
achieve a product which had the textural attributes of fried
b. the use of an MPO or humidified oven to bake a battered
and breaded chicken product which had all the flavor and
textural attributes of prefried chicken without ever being
8. In late 1984 or early 1985, Rosenthal engaged in
discussions with an executive recruiter regarding potential
career opportunities at ConAgra. During her discussions with
ConAgra, Rosenthal disclosed that she was currently engaged in
new product development on new frozen poultry products for
Campbell. On Friday, February 22, 1985, Rosenthal traveled to
St. Louis to interview with ConAgra. After arriving in St.
Louis, Rosenthal completed a formal application for ConAgra in
which she falsely represented that she had no "currently
effective agreement with employers or others concerning
inventions [she had] made or [might] make" in the future. By
letter dated February 25, 1985, ConAgra extended Rosenthal a
formal written offer for the position of Food Technologist. In
late February, 1985, Rosenthal knew that the position she had
been offered at ConAgra involved new poultry product
development for its Banquet frozen foods division.
9. Rosenthal resigned from Campbell on March 4, 1985, the
same day that she accepted a position at ConAgra as a Food
Technologist in the Research & Development Department with
principal responsibility in the poultry unit. When an employee
involved in research announced that he or she would be leaving
to work for a competitor, it was Campbell's policy thereafter
to exclude that employee from Campbell's research facilities.
In keeping with this policy, Campbell personnel promptly
informed Rosenthal that March 4, 1985 would be her last day and
Rosenthal thereafter ceased working for Campbell. She started
working for ConAgra on March 12, 1985.
10. Campbell took substantial measures to safeguard the
confidentiality of proprietary information relating to its
"Never Fried Chicken" product. Upon commencement of employment,
Campbell provided all employees working on or exposed to the
"Never Fried Chicken" technology with a lockable desk and a
corresponding key and instructed such employees to keep all
research documents in the desk under lock and key. Campbell's
research facilities in Camden and Farmington were secured from
the public so that outsiders could enter Campbell's research
premises only after signing a register, obtaining a pass and
only under the escort of a Campbell employee.
11. Prior to Rosenthal's employment with either Campbell or
ConAgra, many companies in the food industry tried to develop
a chicken product which was not fully fried but which tasted
like chicken that had been fried. These efforts included those
of General Foods with its "Shake-N-Bake" and "Oven Fry"
products which had been underway for approximately twenty
12. It is common to incorporate beaded shortening in bread
crumbs to coat poultry products. Crumbs containing beaded
shortening were generally available before, during and after
Rosenthal's employ with Campbell.
13. The application of edible oil to a baked product in
either a mist or spray form has been a widely known practice in
the baking industry since the 1970's. Modern Maid Food
Products, Inc. described this process of spraying oil on a
breaded product in a 1981 memo to Campbell.
14. A multi-purpose oven, or MPO, is a type of humidified
oven which has been in general use since the early 1980's by
15. By letters dated April 25, 1985, Campbell notified
ConAgra and Rosenthal of Rosenthal's Agreement with Campbell
pertaining to inventions, business ideas and trade secrets.
Campbell provided ConAgra with a copy of the Agreement and
informed ConAgra that Rosenthal had worked on several
enumerated projects including Campbell's non-fried chicken
project, wherein she was made privy to Campbell's trade
secrets. None of Rosenthal's supervisors at ConAgra made any
inquiry of Rosenthal concerning her non-fried chicken work at
16. By letter dated June 3, 1985, ConAgra responded to
Campbell's letter stating that it was not interested in
acquiring any trade secrets belonging to Campbell. Rosenthal
does not recall reviewing or even being requested to review
ConAgra's June 3, 1985 letter, nor does she recall being
questioned by anyone representing ConAgra on the subject
17. For roughly a year prior to Rosenthal's employment with
ConAgra, ConAgra had worked on a new line of nutritional
chicken products, which it termed "Project Nova." As part of
this project in 1984, ConAgra considered introducing a premium
quality frozen chicken that was baked not fried.
18. As part of these efforts, ConAgra experimented with
prototypes of an oven-fried chicken employing "Oven Fry," a
breading product manufactured by General Foods. David Scherpf,
the head of Research and Development for Banquet Foods both
before and after Rosenthal's employment, was a former General
Foods executive and had responsibility for the "Shake-N-Bake"
and "Oven Fry" products.
19. Prior to Rosenthal's arrival at ConAgra, ConAgra had not
attempted to use a bread crumb mixture which included
encapsulated or breaded shortening to form the coating of its
"Project Nova" chicken product. ConAgra also did not use
sprayed or misted vegetable oil or margarine on the coating of
its "Project Nova" chicken product.
20. In an interoffice memorandum dated March 18, 1985,
ConAgra's Ron Wesley, who was then the researcher in charge of
ConAgra's "Project Nova" chicken product, described the status
of the project. The three cooking methods described in Wesley's
memorandum all involved frying. The memorandum did not discuss
the use of a high temperature humidified oven or MPO-type oven
to bake a skinless chicken product which has been injected with
a phosphate solution, predusted, battered and breaded. It also
failed to show the use of a bread crumb mixture containing 13%
beaded shortening or encapsulated fat or the use of sprayed or
misted oil applied to the bread crumb mixture to form the
coating of non-fried chicken product.
21. Within two months after arriving at ConAgra, Rosenthal
developed a process which allowed ConAgra to eliminate all
frying from its "Project Nova" chicken product. Her procedure
for making a frozen non-fried chicken product included the
following steps: 1) skinless chicken was injected with a
phosphate solution; 2) the injected chicken was coated with a
predust mixture; 3) the predusted product was covered with
batter; 4) the battered product was covered by a bread crumb
mixture containing Japanese and extruded bread crumbs
containing 13% encapsulated or beaded shortening; 5) the bread
crumb mixture was sprayed with vegetable oil to form the
coating; 6) the battered and breaded product was then baked in
a high temperature humidified oven; and 7) the product is
subjected to surface browning in a browning oven.
22. The use of extruded crumbs or crumbs manufactured from
extruded flour is a widespread practice which preceded
Rosenthal's employment with either Campbell or ConAgra. Before
Rosenthal came to ConAgra, ConAgra also used extruded crumbs on
chicken products that were not fully fried. The extruded and
Japanese bread crumb mixture used by Rosenthal at ConAgra
contained 13% encapsulated or beaded shortening, the same
amount of shortening used at Campbell.
23. On a work-related assignment for ConAgra, Rosenthal was
exposed to the use of a browning unit on her trip to Heat and
Control, Inc. in San Francisco in April, 1985. Campbell had
previously achieved a dark appearance on its poultry products
by using double toasted or pre-browned bread crumbs.
24. On June 20, 1985, ConAgra assigned "TOP SECRET" status to
its "Nova Chicken" project. In a memorandum to those employees
involved in the project, ConAgra stated that there were
"several major competitors that could potentially preempt our
entry into the market. One proprietary conversation over-heard
on an airplane or in the mens room . . . could end up costing
us millions on the bottom line. Please make this a top
25. As of May, 1985, ConAgra did not have either a pilot
plant or a pilot size MPO oven which could be used to test the
"Project Nova" chicken prototypes. On May 24, 1985, Rosenthal
addressed a memorandum to her superiors at ConAgra advocating
that such a pilot plant line be installed at ConAgra's research
facility. She stated that the pilot plant line could be used
initially to further develop and refine "Project Nova." In
connection with that memorandum, Rosenthal disclosed to her
superiors at ConAgra that Campbell had a pilot production line.
ConAgra adopted Rosenthal's recommendations and in late 1985
installed a pilot plant line ...