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KEWANEE v. BICRON

Supreme Court of the United States

January 9, 1974, Argued ; May 13, 1974, Decided

No. 73-187

Opinion

 [*472]  [***320]  [**1881]    MR. CHIEF JUSTICE BURGER delivered the opinion of the Court.

 We granted certiorari to resolve a question on which there is a conflict in  [**1882]  the courts of appeals: whether state trade secret protection is pre-empted by operation of the federal patent law. 2 In the instant case the Court of Appeals for the Sixth Circuit held that there was preemption. 3 The Courts of Appeals for the Second, Fourth, Fifth, and Ninth Circuits have reached the opposite conclusion. 4

 [****6]  [*473]   I

Harshaw Chemical Co., an unincorporated division of petitioner, is a leading manufacturer of a type of synthetic crystal which is  [***321]  useful in the detection of ionizing radiation. In 1949 Harshaw commenced research into the growth of this type crystal and was able to produce one less than two inches in diameter. By 1966, as the result of expenditures in excess of $ 1 million, Harshaw was able to grow a 17-inch crystal, something no one else had done previously. Harshaw had developed many processes, procedures, and manufacturing techniques in the purification of raw materials and the growth and encapsulation of the crystals which enabled it to accomplish this feat. Some of these processes Harshaw considers to be trade secrets.

The individual respondents are former employees of Harshaw who formed or later joined respondent Bicron. While at Harshaw the individual respondents executed, as a condition of employment, at least one agreement each, requiring them not to disclose confidential information or trade secrets obtained as employees of Harshaw. Bicron was formed in August 1969 to compete with Harshaw in the production of the crystals, and by April 1970,  [****7]  had grown a 17-inch crystal.

Petitioner brought this diversity action in United States District Court for the Northern District of Ohio seeking injunctive relief and damages for the misappropriation of trade secrets. The District Court, applying Ohio trade secret law, granted a permanent injunction against the disclosure or use by respondents of 20 of the 40 claimed trade secrets until such time as the trade secrets had  [*474]  been released to the public, had otherwise generally become available to the public, or had been obtained by respondents from sources having the legal right to convey the information.

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416 U.S. 470 *; 94 S. Ct. 1879 **; 40 L. Ed. 2d 315 ***; 1974 U.S. LEXIS 134 ****; 181 U.S.P.Q. (BNA) 673; 69 Ohio Op. 2d 235

KEWANEE OIL CO. v. BICRON CORP. ET AL.

Prior History:  [****1]  CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT.

Disposition:  478 F.2d 1074, reversed and remanded for reinstatement of District Court Judgment.

CORE TERMS

patent, trade secret, invention, patent law, disclosure, discovery, inventor, trade secret protection, holder, secret, court of appeals, manufacturing, courts, encouraged, injunction, pre-empted, processes, confidence, employees, novelty, patentable subject matter, subject matter, public domain, exploitation, monopoly, license, federal patent law, confidential, invalid, forbid

Trade Secrets Law, Trade Secret Determination Factors, Definition Under Common Law, Constitutional Law, Supremacy Clause, General Overview, Federal Versus State Law, Federal Preemption, Patent Law, Trademark Law, Unfair Competition, State Unfair Competition Laws, Business Use, Labor & Employment Law, Conditions & Terms, Trade Secrets & Unfair Competition, Trade Secrets, Protected Information, Customer Lists, Machines, Manufacturing Processes, Breach of Contract, Implied Contracts, Licensing Agreements, Public Contracts Law, Intellectual Property Rights