Whipps, Inc. v. Ross Valve Mfg. Co.

Trade Secrets: Preliminary Injunction: An idea may still be held to be a trade secret, despite not being written down or having written design plans, if a sufficiently detailed description of the design is provided to others.

Opinion (Hillman): Defendant Clyve Gamble, an employee of Ross-Whipps Gate Company, was a former employee for plaintiff Whipps, Inc. During his time at Whipps, Inc. he was the Director of Engineering; an employee of Whipps, Inc. conceived of a proprietary design for a unique application of a manufacturing process known as a “self-jigging” gate and brought the idea to Gamble so it could be taken to the engineering department to begin development. The process would afford Whipps numerous benefits including reduced labor time, reduced manufacturing costs, and production uniformity and efficiency. Gamble was a senior-level employee in a position of trust and confidence at Whipps, Inc.; he continually resisted efforts to develop the “self-jigging” process and delayed assigning the task of creating the engineering design that needed to be submitted with a patent application Whipps, Inc. wanted to submit for the idea. Gamble resigned from Whipps, Inc., leaving the design plans for the process uncompleted; shortly thereafter, Ross-Whipps hired Gamble and then manufactured and displayed on its website a metal slide gate product that appeared to have been produced using the same process that had been conceived by the Whipps, Inc. employee that Gamble had delayed implementing. For a Misappropriation of Trade Secrets claim, a plaintiff must show that the information is a trade secret; the plaintiff took reasonable steps to preserve the secrecy of the information; and that the defendant used improper means, in breach of a confidential relationship, to acquire and use the trade secret. The Court held that the third prong was clearly satisfied. Under Massachusetts law, a trade secret is a “‘secret,’ that is ‘used in one’s business,’ and that ‘gives the owner an opportunity to obtain an advantage over competitors who do not know or use’ the secret.” The Court also held that if the Whipps employee had completed written design plans, this clearly would have been a trade secret; it held that the Whipps employee had, however, given a sufficiently detailed description of the design to constitute a trade secret. Additionally, the use of this design was not yet known in the water gate industry, and Gamble was a senior-management level employee that was held to a standard of confidentiality, satisfying the other prongs of a Misappropriation of Trade Secrets claim. Plaintiff Whipps, Inc.’s Motion for Preliminary Injunction was GRANTED.