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Stamicarbon, N.V. v. Am. Cyanamid Co.

Stamicarbon, N.V. v. Am. Cyanamid Co.

United States Court of Appeals for the Second Circuit

September 12, 1974, Argued ; October 4, 1974, Decided

Docket No. 74-1960 No. 254 - September Term, 1974.

Opinion

 [***322]   [*534]  KAUFMAN, Chief Judge:

James Madison probably did not suppose, on suggesting to the House of Representatives its inclusion in the Bill of Rights, 1 that the right to a public trial would one day conflict with someone's interest in concealing a method for producing a [**2]  triamino derivative of symmetrical triazine. It is not surprising then, that he gave no advice on how properly to resolve the controversy with which we are now presented. Stamicarbon, N.V. [Stamicarbon], a Netherlands corporation, appeals to us from an order denying its motion for a preliminary injunction to prevent disclosure of its trade secrets by American  [*535]  Cyanamid Co. [Cyanamid], the defendant in a criminal contempt proceeding which has been continued by Judge Brieant pending this appeal. We affirm.

I. FACTS

The rather improbable series of events which culminated in this action began a decade ago, with the entry of a consent decree against Cyanamid for antitrust violations 2 in the production of melamine. 3 The decree prohibited Cyanamid from producing more than 30 million pounds of melamine annually for ten years, 4 unless the production capacity of American [**3]  competitors not in conspiracy with Cyanamid should in the interim increase by 25 million pounds. Imports for the preceding year were to be included in the computation of Cyanamid's production for any given year. The decree also forbade Cyanamid to expand its production capacity beyond 30 million pounds annually during the ten-year period.

The decree was modified in 1969 to permit Cyanamid to expand its production capacity. 5 At its new facility Cyanamid employed a secret process, acquired from Stamicarbon by license, for producing [**4]  melamine from urea and ammonia rather than the more commonly used dicycyanamide. Article III of the licensing agreement provided:

CLIENT [Cyanamid] shall treat all STAMICARBON Know-How furnished to CLIENT under this agreement as strictly confidential and shall use its reasonably best efforts to prevent disclosure thereof to third parties.

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506 F.2d 532 *; 1974 U.S. App. LEXIS 6604 **; 183 U.S.P.Q. (BNA) 321 ***; 1974 Trade Cas. (CCH) P75,307; 1974-2 Trade Cas. (CCH) P75,307

STAMICARBON, N.V., Appellant, v. AMERICAN CYANAMID COMPANY, Appellee

Prior History:  [**1]   Appeal by Stamicarbon, N.V., from an order of the United States District Court for the Southern District of New York, Charles L. Brieant, Jr., Judge, denying its motion for a preliminary injunction to prevent disclosure of trade secrets by American Cyanamid Co., defendant in a pending criminal contempt proceeding.

Disposition: Affirmed.

CORE TERMS

secrets, right to a public trial, confidentiality, contempt, melamine, preliminary injunction, district court, pounds, criminal contempt, license agreement, public trial, disclosure, decree, district judge, circumstances, proceedings, in camera proceedings, criminal proceeding, production capacity, irreparable injury, in camera, witnesses, secrecy, attend

Civil Procedure, Appeals, Standards of Review, Abuse of Discretion, Remedies, Injunctions, Preliminary & Temporary Injunctions, Constitutional Law, Fundamental Rights, Procedural Due Process, General Overview