Opinion ID: 715056
Heading Depth: 2
Heading Rank: 2

Heading: Contact Between Stanley and Roton

Text: 4 As early as 1976, Stanley was interested in manufacturing Roton-type hinges. Stanley concluded, however, that [a]s a product, the Roton hinge does not lend itself to Stanley manufacturing capabilities and is limited to an extruded process requiring extremely close tolerances. In 1988, Stanley was again interested in adding a commercial continuous hinge as a product line. At that time, Stanley estimated that 95% of all commercial continuous hinge applications are Roton hinges. 5 In 1989, Stanley considered acquiring Roton. Stanley's Vice President of Marketing (Bannell) first contacted Baer and in April 1989, Roton and Stanley entered into a Confidentiality Agreement which barred the disclosure or use by Stanley of any of the Evaluation Material provided to it by Roton except for purposes of Stanley's evaluation of Roton for acquisition. In June of that year, Stanley's Vice President of Manufacturing (Martino), Comptroller (Gallagher), and President (Martin) inspected the Roton facility. Gallagher and Martin also reviewed Roton's financial statements and discussed the information with Roton's accountant. Various conferences took place between Stanley and Roton and there was what can be characterized as a free flow of information from Roton to Stanley seemingly concerning every aspect of Roton's business. 6 In July 1989, Stanley made an offer to purchase Roton, which Roton rejected. On August 1, Roton terminated negotiations with Stanley and requested the return or destruction of all confidential materials. Later that month, Stanley corresponded with Roton about a possible distributorship arrangement. During these negotiations Stanley sought to amend the Confidentiality Agreement to provide: 7 Notwithstanding anything to the contrary contained in this Agreement or the April 10, 1989 [Confidentiality Agreement], Stanley specifically represents to Roton that Stanley currently possesses the capability of manufacturing and selling continuous hinges for use on architectural/commercial grade exterior and interior doors. This capability was developed independently by Stanley without use of any Evaluation Material. 8 Baer found this proposed amendment inconsistent with his understanding of Stanley's capabilities prior to its evaluation of Roton and for this reason broke off all discussions with Stanley. 9 In January 1990, Roton was acquired by C. Hager & Sons Hinge Manufacturing Co. (Hager), a chief competitor of Stanley, and became Roton Barrier. When Stanley learned of Hager's acquisition of Roton, it embarked on a self-styled aggressive project plan in which it sought to develop [its] own product line of continuous extruded hinges. In response to perceived weaknesses in the life cycle of the Roton product, Stanley intended to focus on an improved weight bearing system. As a result, Stanley introduced into the market its own continuous pinless hinge, the LS500.