Case Name: Recording & Computing Machines Company v. George Neth and Clarence H. Tamplin
Court: Montgomery County Court of Common Pleas
Jurisdiction: Ohio
Decision Date: 1904-04-08
Citations: 7 Ohio N.P. (n.s.) 217
Docket Number: 
Parties: Recording & Computing Machines Company v. George Neth and Clarence H. Tamplin.
Judges: 
Reporter: Ohio nisi prius and general term reports (new series)
Volume: 7
Pages: 217–237

Head Matter:
DISCLOSURE OF SECRET MECHANICAL IDEAS.
Common Pleas Court of Montgomery County.
Recording & Computing Machines Company v. George Neth and Clarence H. Tamplin.
Decided, April 8, 1904.
Confidential Information — Obtained by Employes in the Course of Their Employment — Mechanical Secrets Learned in an Experimenting Room — Disclosure of, to a Rival Concern may be En joined — Corporations—Contracts—Jurisdiction.
1. Where the minds of the parties have met with reference to a proposed contract and the conditions to be embodied therein, the mere fact that the contract which was not ready for signature at the time of reaching the agreement was never signed does not deprive it of its binding character, and such a contract where not within the scope of the statute of frauds is enforcible.
2. One employed to perfect an invention occupies a confidential relation toward his employer, and is not at liberty to make disclosures with reference to the work in hand; nor will he be permitted, after successfully accomplishing the work for which he was employed and perfecting the machine, to claim title thereto as against his employer, or to engage in work for a rival concern on the same machine or other machines involving the same mechanical features, or involving devices or ideas peculiar to .said machine.
Sprigg <& Fitzgerald, for plaintiff.
B. J. McCarty and Dickson & Clark, contra.
In this case the plaintiff company filed the subjoined petition in the common pleas court:
“Plaintiff says that it. is a corporation organized under the laws of the state of Ohio, with its principal place of business in the city of Dayton, Montgomery county, Ohio. The defendants, George Neth and Clarence Tamplin, are residents of the city of Dayton, Montgomery county, Ohio.
“For cause of action against the said defendants plaintiff says that for some time before the organization of the plaintiff, Will I. Ohmer was engaged in the business of manufacturing or experimenting in the manufacture of recording or computing or registering machines in the said city of Dayton, Ohio, and was the sole owner of a plant in the said city, with valuable patents, good will and the .accessories to the manufacturing business in said city.
“On or about the 5th day of February, A. D- 1904, the said Will I. Ohmer sold, assigned and transferred to the plaintiff, the Recording & Computing Machines Company, his entire business with all the property and rights of every kind and description, and since said date the plaintiff, the Recording & Computing Machines Company, has been .the owner and possessor of said business, and has been engaged in the manufacture of recording, computing and registering machines under valuable patents granted by the patent office of the United States of America, and of prosecuting invention thereon. For several years last past the defendants, George Neth and Clarence Tamplin, have been employed by Will I. Ohmer and by the plaintiff, as his successor, as experimenters under the direction of said Will I. Ohmer in the experimental department of their said business, and in a confidential relation to them, and have received large salaries in their said employment from the plaintiff and the said Ohmer. By reason of their connection with the said experimental department of plaintiff, the defendants, George Neth and Clarence Tamplin, have acquired'valuable information as to the mechanisms of the machines being developed and manufactured by the plaintiff. On or about the 10th day of May, 1904, the defendants, Neth and Tamplin, represented to the officers of the plaintiff that they had developed a new and improved registering and operating mechanism, which was thoroughly practical and would do all and more than the machines made for similar purposes by the said plaintiff, and other machines of similar nature, and represented that said mechanism is new in principle, patentable, and that it did not infringe upon any othey mechanism of any other person whatsoever. Whereupon, Will T. Ohmer, acting for the plaintiff, entered into a contract in his name with the defendants, Neth and Tamplin, by the terms of which he agreed to buy, and defendants, Neth and Tamplin, agreed to sell to him such new and improved mechanism and registering" machine when said machine Avas completed as a practicable and acceptable registering machine. By the terms of said contract Will I. Ohmer agreed to pay $200 in cash and large salaries to defendants, Neth and Tamplin, to remain in his employment and perfect the said machine. He was further to furnish them with all the necessary shop room, tools and material for the completion of the first model of said machine, and upon its completion as a practicable .and acceptable registering machine was to pay them a large sum of money as an additional consideration therefor, to-wit, the sum of $4,000, less what had been already paid in wages to the two men. The defendants, Neth and Tamplin, agreed to. work upon and perfect the model of said machine at his expense, and that upon the request of Will I. Ohmer, or his nominee or nominees, they would sign all papers, make all lawful oaths, assignments, assign all applications for letters patent, and any other documents necessary, and to assign any and all improvements on said machine, .and to do all things necessary or desirable in procuring the issue or re-issue of any patent or patents relating to the inventions set out.
“The plaintiff, after said contract was made, tendered to the defendants the sum of $200 in cash, gave them all the necessary shop room, tools and materials, and was and is ready and willing to pay the stipulated weekly wages to the defendants, and upon the completion of the model, drawings, specifications, etc., to inspect the same, and if a practical machine and acceptable to the trade using the same, to pay for the same according to the terms of the contract, the defendants to turn over the application for the patents, and the patents when issued, and all models, drawings, etc.
“Plaintiff says that during the time that defendants have been with it and Will I. Ohmer, experimenting at its and his expense, several machines or models have been constructed containing special devices, and in their confidential employment defendants have become familiar with the business and mechanical secretsmf the plaintiff, the disclosure of which to its rivals would be very injurious, and they have acquired a special knowledge, and have prepared drawings and plans which they should not be permitted to carry away to the said rivals or other persons.
“Plaintiff avers that notwith standing their agreement as aforesaid the defendants have purposely and intentionally abandoned the same without cause; they have refused to receive the cash payment; they have left the shop of the plaintiff and taken away their tools; and decline to work upon the invention and to perfect the model for the plaintiff, or to do anything under the contract.
“Plaintiff avers that notwithstanding their agreement as ment with some other person or corporation, in its belief, and it avers that they are about to work upon the same elsewhere, in the interest of some other party, and to sell the same to such other party without giving the plaintiff the right to inspect- the same and exercise its option, if it is a valuable invention, to become the exclusive owner of the same upon the payment of the consideration money provided in the contract. And unless-restrained the defendants will work upon the same in the interest of other parties, disclose to them the secrets involved in its construction and mechanism, as well as in the mechanism and construction of various other machines which the plaintiff is engaged in making, and carry to them drawings, specifications and other ideas and information, 'the private property of the plaintiff, acquired by defendants while so confidentially engaged, and when said invention is perfected they will refuse to disclose the same to the plaintiff, or to expose to it the model and the invention thereon, or to give it an option to inspect the same and upon approval to take the said model, invention, patents, etc., at the agreed price, or to transfer the same to it upon its tender of the price, all of which will be to the -irreparable injury of the plaintiff.
“Wherefore, plaintiff prays that the defendants, Neth and Tamplin, and each of. them, be restrained from disclosing or divulging to any other party or parties the information, drawings, specifications, or mechanical -secrets of the plaintiff, from carrying to them any of the said drawings or models; or from engaging in any work for other parties than the plaintiff upon the invention referred to herein, in the perfection of the same, or the making of machines or models under the same; from communicating .in any way to other parties the knowledge of the secrets of the business of the plaintiff, acquired by them while in its employ, or the employ of the said Will I. Ohmer; and from in any way placing themselves in such a position that they will not be able to comply with the contract made with the plaintiff.
“And plaintiff prays that when said invention is perfected and before said application for patent is filed, and patent is issued, the plaintiff, before defendants be permitted to transfer the same to anyone, shall have a reasonable opportunity of inspecting and examining the same, and of having the option to take the same at the agreed price, and that the defendants be restrained from selling, assigning, transferring, or in any way granting any license or permit under the same until such option has been extended, and for all other proper relief.”
To this petition the defendants filed the following answer:
“Now comes .the defendants and for answer say, that they were for a time in the employ of said Will I. Ohmer and the plaintiff; that on the 7th day of June, 1904, after they had quit the employment of plaintiff, and not on the 10th day of May, 1904, as alleged in the petition, and not prior to the 7th day of June, 1904, they told said Will I. Ohmer that they had in mind a registering mechanism. Defendants further say that they had some negotiations with said Will I. Ohmer with reference to said mechanism, looking toward a contract with him; that said Will I. Ohmer made certain proposals to them, and drew up in writing a contract containing about the stipulations mentioned in the petition; but the defendants deny that they entered into the contract as alleged in the petition; but on the contrary aver that they refused to sign same, and asked for á copy of same and for further time to consider same. Defendants deny that they ever entered into said alleged contract or that they are under any contract whatever with said Will I. Ohmer, or plaintiff.
“Defendants deny that they have carried away any- drawings or plans; deny that they are about to divulge the secrets mentioned in the petition, or any secrets belonging to plaintiff or Will I. Ohmer to any one.
“Defendants say that at the time they requested said Ohmer to give them a copy of his proposal he neglected and refused to do so; and that his suit was brought and injunction asked for to coerce them into treating as a contract his said proposal which they never signed.
“Wherefore, defendants ask to be dismissed with their costs and for all proper relief.”
A -temporary injunction was granted, which was afterward made perpetual in the following final decree:
“This cause came on to be heard upon the petition of the plaintiff, the answer of the defendants, and the evidence, and was submitted to the court; whereupon the court, being folly advised, upon consideration finds upon -the issues joined in favor of the plaintiff, and that the allegations of the petition are true; i-t is therefore ordered and adjudged by the _ court that the temporary injunction heretofore allowed herein be, and the same is hereby made perpetual, and the said defendants, George Neth and Clarence Tamplin, and each of them, are hereby perpetually enjoined, from disclosing or divulging knowledge to any person or persons other than the plaintiff, of all and singular the mechanical ideas, combinations, mechanisms, models, patterns, sketches, drawings, and devices involved in, or relating to fare and ticket registering, recording and computing machines, suggested, disclosed, or developed by plaintiff during the confidential employment of defendants by plaintiff or by Will I. Ohmer, including the machines known in plaintiff’s shops as Nos. 1, 2 and 3, and the machine to be built by defendants for plaintiff under the written and unsigned contract set forth in the petition.
“From engaging in any work, save for plaintiff only, upon said machines or upon any other machines involving the same mechanical features, devices, or ideas original with and peculiar to said machines of plaintiff.
“From in any way placing themselves in such position that they will not be able to comply with said contract.
“From transferring, assigning, or disposing of said invention claimed by them in said written unsigned contract, or of any interest in or concerning same or -the right to use or manufacture same, until plaintiff shall have had through defendants a reasonable opportunity to examine and test the same, and shall have exercised its right to accept or reject same on the'terms set forth in the said contract.
“And it is further adjudged that' plaintiff recover of defendants its costs herein expended, taxed at $--.
“To all of which finding, order, judgment, and decree, defendants and each of them except.
“And defendants giving notice of their intention to appeaf to the circuit court, the amount of the appeal bond is fixed at $200.”
The case was then taken to the' circuit court where the defendants, George Neth and Clarence Tamplin, were perpetually enjoined :
“From disclosing or divulging knowledge to any person or persons other than plaintiff, of all and singular the mechanical ideas, combinations, mechanisms, models, patterns, sketches, drawings, and devices .involved in or relating to fare and ticket registering, recording and computing machines, suggested, disclosed or developed by plaintiff during the confidential employment of defendants by plaintiff or by Will I. Ohmer, including the machines known in plaintiff’s shops as Nos. 1, 2 and 3, and the machine to be built by defendants for plaintiff under the written and unsigned contract set forth in the petition.
“From engaging in any work, save for plaintiff only, upon said machines 01; upon any other machine or machines involving the same mechanical features, devices, or ideas original with or peculiar to said machines of plaintiff.
“From transferring, assigning or disposing pf said invention claimed by them in said written unsigned.contract, or of any interest in or concerning same or -the right to use or manufacture same, until plaintiff shall have had through defendants a reasonable opportunity to examine and test same when completed, and shall have exercised its right to accept or reject same when completed on the terms set forth in said contract of June 13th, 190.4.”
In the Supreme Court the judgments below were affirmed. The opinion of Judge Kumler in the common pleas follows:
Affirmed by the Circuit Court without report; Circuit Court affirmed by the Supreme Court without report, 75 Ohio State, 603.

Opinion:
Ktjmler, J.
This matter came before Judge Brown last July on an application for a temporary restraining order to restrain George Neth and Clarence H. Tamplin from giving away or divulging bertain information or transferring certain patents, patent rights, and so on.
On that application a temporary restraining order was issued, and the matter came up before this court some three or four weeks ago to be heard upon its merits.
The plaintiff, after making the usual averments-, alleges that on the 5th of February, 1904, William I. Ohmer sold and transferred -to plaintiff, the Recording & Computing Machine Company, all of his interest in certain car fare registers, inventions, processes and so on. The petition then avers that for several years- last past the defendants, Neth and Tamplin, have been employed by said Ohmer and by the plaintiff as successors, as experimenters under- the direction of said Ohmer in the experiment department of their said business, and in a confidential relation to them, and have received _ large salaries under said employment from plaintiff and the said Ohmer. By reason of their connection with the said experimental department of plaintiff said Neth and Tamplin have acquired valuable information as to mechanism of the machines being developed and manufactured by the plaintiff; that on or about the 10th day of June, 1904, the defendants, Neth and Tamplin, represented to the officers of the company that they had developed a certain machine, representing to them that it was new in mechanism and principle and that it was patentable and did not infringe upon any other mechanism of any other person whatsoever. Whereupon Mr. Ohmer, acting in behalf of plaintiff, entered into a contract in his name with -the defendants, Neth and Tamplin, by the terms of which he agreed to buy of the defendants, Ne.th and Tamplin, the said improved mechanism and registering machine, when said machine was completed as a practicable and acceptable registering machine; that Ohmer was to pay them $200 in cash and was to pay them certain wages and was to furnish them with room and tools and implements by which to earry out this scheme, and if the machine was acceptable to him when constructed, he was to pay them the sum of $4,000. That the defendants, Neth and Tamplin, accepted said agreement and that said agreement was fully entered into for a valuable consideration. But after the contract was all agreed upon they declined to sign the contract; and that subsequent to that time they sold said improvement mechanism to a rival concern. Plaintiff further avers that while they were working as employes of the plaintiff they acquired all of the secrets of the mechanism of the cash car register machines — in fact, they knew •as much about it as Ohmer himself; and they say that said defendants are about to divulge all of those secrets, and that they not only do that, but "'claim to be inventors thereof.
The petition prays that the defendants may be enjoined from communicating any of the secrets which were acquired in a confidential, way, and also from transferring any .of the patents or any of the patentable interests in these machines, and also that when said machine is completed the defendants be required to exhibit the machine to Mr. Ohmer for his inspection, and if it is such a machine as represented and as called for by the contract, that plaintiff have the option to take the same at the agreed price, he being willing to perform all and singular his part of the contract, and for equitable relief.
To this petition there is a motion filed to dissolve the injunction, and also an answer filed last July. During the trial of the case another motion was filed to strike out and to have the causes of action separately stated and numbered and then require plaintiff to elect upon which he will proceed. The matter came on for hearing, and the testimony is as follows:
That Ohmer was for twelve or thirteen years engaged in this business, in attempting to get up some patent registering machine, for the use of street car conductors; that he spent part of his time abroad, part of his time here; that he opened a shop on East First street; that he had expended in all in the last ten or twelve years in the neighborhood of $200,000 in order to perfect a machine of this character; that he had gotten up numerous models, sketches and drawings; that in December, 1891, he employed the defendant, Tamplin, as a mechanic to do most anything that was to be done around the premises; that on January 20th, 1902, he employed Neth. Neth was employed for the purpose, as hé testifies, of working in the experiment department under Mr. Ohmer's instructions and the instructions of the foreman at that time. Neth, when he was employed, received a salary of $2.75 a day. lie worked in that capacity until the following fall, I think it was, when the foreman resigned. Thereupon Neth was promoted, as Ohmer says, to be foreman of the experiment room at a salary of $21 and something a week; that soon after Neth came there Tamplin was also transferred to the experiment room, and his salary was increased from $15 to $16.80 a week. They were working all the time, so far as the testimony shows, on these machines.
They got out what was known as machine No. 1 first. After machine No. 1 was out they commenced to build machine No. 2, which contained, as the testimony shows, valuable improvements on No. 1; and after No. 2 was out Mr. Ohmer succeeded in getting a patent on No. 2. Then they commenced to construct No. 3, with the idea and for the purpose of placing on that machine some more valuable improvements. It was supposed to be the best machine of .the three.
No patent has ever been taken out on No. 1; no patent has ever been taken out on No. 3, but if we understand the testimony an application has been made at the patent office for the allowance of- patents on No. 1 and No. 3; that allowance has been granted, but the patent has not been issued.
Now, the claim of the plaintiff in this matter is that everything went along smoothly so far as it knew in the matter, until about the latter part of May or first of June, 1904. At that time, as plaintiff says, and as Ohmer .and Whistler, his assistant, testify, they missed the two defendants from the office and Ohmer made inquiry .and Mr. Neth said he had been sick. The testimony does not show exactly what Mr. Tamplin's excuse was. At any rate, there was a meeting arranged by Whistler, the assistant, 'between Mr. Ohmer and Tamplin and Neth at .the Beckel House. Mr. Ohmer testifies that -that is the first knowledge that he ever had of the improved machine that they tried to sell him and the first knowledge that he ever had that they claimed'any interest as inventors in the machines 1, 2 and 3. A rough proposition was submitted to him at -that time at the Beckel House on Friday, June 10th, 1904. He took the matter up with the defendants, and they agreed to meet him at his shop the next morning, which was Saturday morning.
Three propositions were submitted after the defendants had had a consultation for perhaps an hour or more in the experiment, room. They had the contract and all the propositions together. Aftér having consulted for some time they repaired to the main office, as Mr. Ohmer and Mr. Whistler testify, and the defendants, Neth and Tamplin, said there were -three things they wanted added to the contract; one was that they wanted their wages to be stated in -the contract, another was that.Tamplin's name should be inserted in -the contract with that of Neth, and the third was that they should receive $200 cash.
These things, as Mr. Ohmer -testified, were assented to on his part. They then left and came back on Saturday afternoon, and at that time the matter was deferred until the following Monday morning. On Monday morning they came around and insisted on another proposition, as the testimony of the plaintiff tends to show, and that was that, in the course of construction of this machine, should it in any wise interfere with any of the patents on 1, 2 and 3, they should be given the privilege of using so much of those patents as went to perfect this other machine which they were talking about. After some hesitation upon the part of Ohmer, as they all testify, he finally assented to that, and that was embodied in a rough proposition.
It seems from the testimony that all of the parties, Ohmer, Neth'and Tamplin, were .anxious to consult some lawyer to get the contract in legal form and have everything all right, and finally they agreed to consult Mr. John A. McMahon. In the afternoon of Monday, June 13th, they all went to Mr. McMahon's office, and I think he was busy trying some case up until 5 o'clock; at least it was late when they got there. He was informed of their mission by Mr. Ohmer, who seems to have been foremost of the three; that they wanted him to look over the matter and make any suggestions that he thought were right and proper for the protection of all of them, and as Mr. McMahon testifies, he supposed his duties were in the nature of arbitrator rather than anything else, he looked over the contracts and made two suggestions. One of them appears in the unsigned contract in lead pencil in his own handwriting, and the other I think was dictated by him, but reduced to writing by Mr. Ohmer. The thing went along until the matter was ready to sign. No suggestion was made at that time coming from any one of the three, so far as the testimony shows, that there was anything else to be added to the contract. It was in bad shape; some in lead pencil and some on one piece of paper and some on another, and it was scratched and interlined; and Mr. McMahon would not permit the matter to be signed. If an attempt had been made to sign it, so he testified, he would not have permitted a paper of that kind to go out of -his office.
The suggestion was then made (and there is a dispute upon that point), the suggestion was made that tfie contract was all agreed to; that Ohmer should take it with him and have it run off by his typewriter, and then they should all appear at his office on the next morning and sign the contract. The suggestion had been made that it should be run off by the typewriter in Mr. McMahon's office, and he went to get his stenographer and found he was gone, and so far as the testimony shows they left the office. Mr. Ohmer, I think, did sign -the rough contract. At any rate Tamplin says he agreed to sign the contract, if he was satisfied with it; said they wanted to look it over. Mr. McMahon, who was on the stand, and testified,' says that so far as his memory goes nothing of that kind was said, and that he is quite sure that if he had said, after he made the suggestions that he did, that this contract was now ready to sigip they would have signed it, all of them. That is his view of the matter.
The contract was perfect in every respect — it contained all the essentials; there had been a meeting of the minds upon all of them; there was a valuable consideration; everything was done that could be done or ought to be done in order to make a complete contract, except the redrafting of the contract and the signing of the names.
There is where the contention in a very large degree comes in this ease. It is insisted by the plaintiff that they did enter into a contract, and'the mere fact that the contract was not signed that night at McMahon's office did not make any difference. They entered into the contract, promising to sign the contract the next morning, after it was put in legal form.
Neither Neth nor Tamplin appeared next morning to sign the contract, nor did they ever appear at Ohmer's office for that purpose. But Tamplin appeared next morning at Mr. McMahon's office, and asked him whether or not that was a binding contract. Mr. McMahon said to him that he thought the proper thing for him to do was to go and employ a lawyer; and that is the last we hear of Tamplin. A few days after that time, perhaps a day after that, Mr. Neth came to the office and said that he and Tamplin had a disagreement; that Tamplin was going to the other firm, ancl hé (Neth) wanted to stay with Ohmer. The thing went on for a day or two, and Neth and Tamplin came and got their tools, and that was the end of the matter so far as this contract was concerned.
Now, the question presents itself: Is -that a valid contracti It is admitted by the defendants to be valid in every respect but the signature — the mere fact that the contract was not signed.
If there had been an understanding between all the, parties that evening — if the testimony showed that Mr. Ohmer and Neth and Tamplin agreed that that would not be a binding contract until signed, we would say, No, that is not a good contract; but the testimony does not disclose that fact. Both Tamplin and Neth admit that nothing of that hind was said while they were in McMahon's office; but they say that this conversation which they claim to have had with Mr. Ohmer was after they left Mr. Ohmer's office, that it was then they, said they would be in to sign the contract, if they were satisfied with it. Mr. Ohmer denies it in to to.
There is a case reported in the 14 O. S., 292, Blaney & Morgan v. David T. Hoke. The syllabus is as follows:
' ' 1. Where an agreement not within the purview of the statute of frauds, is in all other respects complete — and in the absence of any understanding between the parties that the same should not be complete until reduced to writing — the same will bind the parties, although it may have been understood between them that the agreement should afterward be formally reduced to writing and executed-
"2. An agreement may be complete, although by its terms the obligations and rights of the parties may be made to depend upon the terms of a contract to be substantially entered into between one of the parties to the agreement and a third party."
This case clearly recognizes the rule that a contract can be a valid contract under certain circumstances without being signed at all. If -the understanding of all the parties to the contract is to the effect that the contract must be signed after it is reduced to writing, -then it would not be, as we understand this decision, a valid contract unless it was so signed. But suppose there was no understanding of that kind, or suppose that after the contract had been agreed to there was a separation of the parties, and nothing was said about signing this contract except that it should be signed in the morning, without any further consideration whatever, then I undertake to say, according to the principles of this case, that it did constitute a valid contract between the parties.
Another thing that strengthens the view of the court that these parties, Neth and Tamplin, recognized that as a valid contract, is the fact that they say — take their own statement, if you please — that "that is all right so.far as we now know; we will come to your office tomorrow morning"; that Neth came back, and nothing was ever said about any other elements1 in that contract except those which had been reduced to writing. What does that indicate? It indicates that there was nothing in their claims at all. They agreed to sign it the next morning! They did not propose anything else. So far as one of the parties to the contract was concerned, he was never again heard of in his relations to Mr. Ohmer. ITe did go to McMahon's office and a conversation took place as we have said. We think under the decision above cited and under the testimony in this case, that it constituted a contract between the plaintiff and defendants jin this ease.
The testimony in this case further shows that in May those same defendants, Neth and. Tamplin, undertook to sell this patent or invention, whatever it may be, to a syndicate composed of William Breidenbaugh, George Weimer, Clarence Grier, Harry Wagner, James Muldoon and a man by the name of Carpenter, from Sidney. That they were very anxious to sell this same machine and represented to these men what it was worth, and they dickered backward and forward for some time and could not agree upon terms and the matter was given up. It cropped out from the testimony that the defendants in this case were very anxious to perfect that machine. Mr. Weimer testifies to this. He said they wanted to get this machine out before Ohmer' got his No. 3 out; wanted to get their patent first, and they said, if we can believe Weimer, and.we have no reason for not believing him, that they had fixed No. 3 so that that machine could not be got out for two or three months.
As a matter of fact, if Mr. Ohmer and Mr. Whistler tell the truth, somebody did fix No. 3, because it took the better part of three months to reassemble that machine after these gentlemen left, and they had to get some expert from Springfield and one from Pittsburg. It° took -them three months to reassemble No. 3 and put it in proper condition. If Weimer tells the truth Neth admitted to him that they had done that very thing for the purpose of delaying Mr. Ohmer in getting out his model preparatory to getting a patent. It does not look right for a person to do that; much less a person who is engaged in business.
•The testimony discloses the further fact that within two or three days immediately before this temporary restraining order was allowed, this machine, whatever it is, was sold to another competing firm here in town. The defendants, Neth and Tamplin, evidently took the view that they were under no obligation to carry out this contract with Will Ohmer. They therefore dropped their negotiations with him and went ahead, and as they testified, sold the identical improvement — that is the language of both of them — there is no difference between the machine that they wanted.to sell to Will Ohmer and-the one they wanted to sell to the Ohmer Car Fare Register Company.
The testimony further shows that they worked there from'two and a half to three years. There is a total failure of the testimony to show that either of the defendants made any claim to have any interest as inventors or otherwise in machines No. 1, 2 and 3 until about the last of May or first of June, 1904, and there is nothing in the testimony to show that they had.
They did claim, I believe, to have done some work at the house. They also admitted they had done some work on Ohmer's time on this machine they were about to sell; that they had gone away, made several trips, and on one of them at .least Ohmer was paying them for their time while they were working on this machine. One of them admits that to be true, fie said he didn't think it was the right thing to do, but he was doing it all the same.
Now, that is substantially what we have in the ease. Mr. Ohmer says that they have possession of all his secrets in reference to this matter and all the secrets in reference to another machine — what is called a ticket machine. According to his description it does everything but talk. It is truly a wonderful machine. lie described the action of the machine, what it would do. The mechanism, of course, he did not; was not allowed to.
There was another thing that cropped out in this matter; that .the United States Patent Commissioner does not pay much attention to an order of this kind anyhow. After Judge Brown had allowed a temporary restraining order in this ease a patent was issued to Mr. Ohmer on No 2. After a patent is issued the knowledge of it becomes public property; anybody can see then what is going on and what has been done. Then if anybody claims there is an infringement, he may bring a suit in the United States Circuit Court to test it. As testified in this case by Mr. Ohmer and not denied by defendants, some application that he had in the patent office for a patent on No. 2 was taken by the defendants in this case, and No. 2 was thrown into interference, so there is a contest on infringement before the natent commissioner.
After your patent is issued it seems to be nothing more then than prima facie evidence of title until it has been tested in the Circuit Court of the United States and thence on to the Supreme Court of the United States. It is not until then that a party can feel sure whether he has a patent
Now, I sáy these things all came along at the time they quit. Up until that time the testimony does not show that there was any claim made for these inventions.
What is the law on a case of this kind? There are three or four propositions of law. I will call your attention to them.
I believe it was first claimed that this court did not have juris diction; that this whole matter ought to be referred to the patent office. I am sorry that this is not the law of the case. But it has been held that a state court has jurisdiction to protect the rights of parties against the divulging of secrets, and to protect the rights of parties in reference to patents while a case is pending on a suit on infringement in the United States Courts. The fact -that the plaintiff would have a remedy in the Circuit Court of the United States for infringement of a patent, does not deprive him of his remedy in the state courts for the violation of the terms and conditions of a contract for the manufacture of such patent (Gordon v. Deckebach, 12 L. B., 169). And we have exactly the same holding in the case of Fuller & Johnson v. Bartelle, 68 Wis., 73.
According to these two authorities, we have jurisdiction in the matter, notwithstanding there may be infringement suits pending.
Now there is another proposition: That a court of equity will protect an inventor of a secret process against its disclosure by any one obtaining knowledge of it in confidence. I cite the well-known ease of Bell Foundry v. Dodds, — W. L. B., 84, decided by Judge Taft, where he lays down the proposition that—
"A court of equity will protect the inventor of a-secret process against its disclosure or unauthorized use by any person obtaining knowledge of it in confidence. The inventor may sell the secret to another and thereby vest in his assignee as full right to protection from disclosure or use by persons acquiring knowledge of it in confidence as he himself would have. The process must be shown to be a secret in order to entitle the complainant to protection."
In the 86th N. Y., 183, we find the same doctrine, in the ease of The Eastman Kodak Company v. Richenback et al:
"The actual creative act of an inventor is recognized as an invention, although he may have called to his assistance the ideas and creations of other parties, provided such ideas and creations are so used as to achieve new results. ' '
Here is another proposition:
"When, however, knowledge of such secret process is obtained by any breach of confidence, courts of equity will enjoin the use of such knowledge by parties acquiring the same in that manner. ' '
That decision shows that the right was perfectly clear for the power of a court of equity to be invoked for that purpose.
What is theduty of the master and the servant? We find in the 41st O. S,, what we think is applicable to a question of this kind.
What is the duty of the master to the servant or the servant towards the master? Under similar circumstances it seems to me that the principle which regulates the one, when the relationship of principal and agency is created, simply would regulate the other. Here was a question as to the relationship of principal and agent. The agent had been buying certain property while he was agent, and claimed it as his own. The Supreme Court of Ohio held that he was not entitled to it at all and that it belonged to the principal.
"It is a fundamental rule that an agent employed to sell can not be a purchaser, unless he is known to his principal to be such; nor is the rule inapplicable or relaxed when the employment is to sell at a fixed price.
' ' The law will not suffer one to earn a profit or expose him to the temptation of a dereliction of duty, by allowing him to act at the same time in the double capacity of agent and purchaser. ' '
Now, here is a general proposition, as said by Chancellor Walworth in Van Epps v. Van Epps, 9 Paige, 241:
" It is a rule which applies universally tó all who come within its principles, which principle is that no party can be permitted to purchase an interest in property and hold it for his own benefit, when he has a duty to perform in relation to -such property which is inconsistent with the character of a purchaser on his own account and for his individual use."
Now, let us read that another way and see how it would apply to this case. See if there is any reason why it should not apply with all its force:
"It is a rule which .applies universally to all who come within its principle, which principle is that no party can be permitted to claim an interest in property and hold it for his own benefit when he has a duty to perform in relation to such property which is inconsistent with the character -of the claimant, on his own account and for his own individual use. ' '
I say the principle is the same whether it reads the one way or the other.
There is still one more proposition in this case. It is not necessary to have a written contract in a case of this kind. The law relationship once established, whenever an employe goes into the shop of an inventor and proprietor and is put to work on some inventive process, the law says that he can not divulge that secret "process, independent of any contract. The relationship is confidential; therefore .the law raises a presumption that it shall be confidential. The law raises an implied contract that the employe who occupies a confidential relation towards his employer shall not divulge any trade secrets imparted to him nor discovered by him. Sittle v. Gallus et al, 4 Hunn (1896), 569; Eastman Kodak Co. v. Richardson, 79 Hunn., 183; Peabody v. Norfrick, 98 Mass., 452.
There is only one more case I am going to call attention to, and that is the case of Solomons v. United States, 137 U. S., 342, a ease that was decided in 1890. During 1867 and 1868 Spencer M. Clark was General Superintendent of the Bureau of Engraving at Washington. The Secretary of the Treasury wanted some person to invent some kind of a stamp that would prevent frauds .upon whiskey and liquor of all kinds. The sub-committee of the Ways and Means committee waited upon him, and finally there was a meeting arranged between the sub-committee, the Secretary of the Treasury and the Internal Revenue Commissioner and Mr. Clark. They .asked him if he could not devise some appliance by which these stamps would be effective to prevent all sorts of frauds by the re-use of the stamps. He said he thought he could do it, and went about to devise a stamp which would do the work. After he had devised it and before he ap plied for a patent upon the same, he sent for the Secretary of the Treasury and sub-committee and the Revenue Commissioner, and they thought it was a very good thing and they adopted it. Subsequent to that time Clark went home. While he was inventing this stamp he was still superintendent of the Bereau of Engraving and Printing, and said that he did not want anything for his invention; but finally he applied for a patent.
The case was decided by Mr. Justice Breuer. I will read part of the opinion to you. He says:
"The case presented by the foregoing facts is one not free from difficulties. The government has used the invention of Mr. Clark and has profited by such use. It was an invention of value. The claimant and appellant is the owner of such patent, and has never consented to its use by the government. From these facts, standing alone, an obligation on the part of the government to pay naturally arises. The government has no more power to appropriate a man's property invested in a patent than it has to take his property invested in real estate; nor does the mere fact that an inventor is -at the time of his invention in the employ of -the government transfer to it any title to, or interest in it. An employe, performing all the duties assigned to him in his department of service, may exercise his inventive faculties in any direction he chooses, with the assurance that whatever invention he may thus conceive and perfect is his individual property. There is no difference between the government and any other employer in this respect. Bui this general rule is subject to these limitations. If one is employed to devise or perfect an instrument, or a means for accomplishing a prescribed result, he can not, after successfully accomplishing the tvorJt for which he was employed, plead title thereto as against his employer. That tvhich he has been employed and paid to accomplish becomes, tohen accomplished, the property of his employer. Whatever rights as an individual he may have had in and to his inventive powers, and that which they are able to accomplish, he has sold in advance to his employer. [Italics, Judge Kumler's.] So also when one is in the employ of another in a certain line of work, and devises an improved method or instrument for doing that work, and uses the property of his employer and the services of other employes to develop and put in practicable form his invention, and explicitly assents to the use by his employer o£ such invention, a jury or court trying the facts is warranted in finding that he has so far recognized the obligations of service flowing from his employment, and the benefits resulting from his use of the property, and the assistance of the employes of his employer, as to have given to such employer .an irrevocable license to use such invention. ' '
In this ease the testimony of Mr. Ohmer shows and both of the defendants admitted on the stand, that they were employed for the purpose of inventing and making a ear fare register, "or a means of accomplishing a prescribed result; he can not after successfully accomplishing the work for which he is employed, plead title to it as against his employer."
These two defendants now claim they were original inventors of these machines. Suppose they were, then what? "That which he has been employed and paid to accomplish becomes, when accomplished, the property of his employer. Whatever rights as an individual he may have had in and to his inventive powers, and that which they are able to accomplish, he has sold in advance to his employer."
This is the principle of law announced by Justice Brewer, the best judge, perhaps, that ever sat, at least on the present Supreme Bench of the United States. We are bound to bow our heads to this decision.
Without going further in this ease, the holding of the court is that the temporary restraining order be made perpetual and and a perpetual injunction is awarded.