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Chapter 11 One Free Bite
AMONG THE THOUSANDS of young scientists who were doingvery well in the research-and-development programs ofAmerican companies in the fall of 1962 was one named DonaldW. Wohlgemuth, who was working for the B. F. GoodrichCompany, in Akron, Ohio. A 1954 graduate of the University ofMichigan, where he had taken the degree of Bachelor ofScience in chemical engineering, he had gone directly from theuniversity to a job in the chemical laboratories of Goodrich, ata starting salary of three hundred and sixty-five dollars amonth. Since then, except for two years spent in the Army, hehad worked continuously for Goodrich, in various engineeringand research capacities, and had received a total of fifteensalary increases over the six and a half years. In November,1962, as he approached his thirty-first birthday, he was earning$10,644 a year. A tall, self-contained, serious-looking man ofGerman ancestry, whose horn-rimmed glasses gave him anowlish expression, Wohlgemuth lived in a ranch house inWadsworth, a suburb of Akron, with his wife and theirfifteen-month-old daughter. All in all, he seemed to be theyoung American homme moyen réussi to the point ofboredom. What was decidedly not routine about him, though,was the nature of his job; he was the manager of Goodrich’sdepartment of space-suit engineering, and over the past years,in the process of working his way up to that position, he hadhad a considerable part in the designing and construction ofthe suits worn by our Mercury astronauts on their orbital andsuborbital flights.
Then, in the first week of November, Wohlgemuth got aphone call from an employment agent in New York, whoinformed him that the executives of a large company in Dover,Delaware, were most anxious to talk to him about thepossibility of his taking a job with them. Despite the caller’sreticence—a trait common among employment agents makingfirst approaches to prospective employees—Wohlgemuth instantlyknew the identity of the large company. The International LatexCorporation, which is best known to the public as a maker ofgirdles and brassiéres, but which Wohlgemuth knew to be alsoone of Goodrich’s three major competitors in the space-suitfield, is situated in Dover. He knew, further, that Latex hadrecently been awarded a subcontract, amounting to somethree-quarters of a million dollars, to do research anddevelopment on space suits for the Apollo, orman-on-the-moon, project. As a matter of fact, Latex had wonthis contract in competition with Goodrich, among others, andwas thus for the moment much the hottest company in thespace-suit field. On top of that, Wohlgemuth was somewhatdiscontented with his situation at Goodrich; for one thing, hissalary, however bountiful it might seem to many thirty-year-olds,was considerably below the average for Goodrich employees ofhis rank, and, for another, he had been turned down not longbefore by the company authorities when he asked forair-conditioning or filtering to keep dust out of the plant areaallocated to space-suit work. Accordingly, after makingarrangements by phone with the executives mentioned by theemployment agent—and they did indeed prove to be Latexmen—Wohlgemuth went to Dover the following Sunday.
He stayed there a day and a half, borrowing Monday fromvacation time that was due him from Goodrich, and gettingwhat he subsequently described as “a real red-carpettreatment.” He was taken on a tour of the Latexspace-suit-development facilities by Leonard Shepard, director ofthe company’s Industrial Products Division. He was entertainedat the home of Max Feller, a Latex vice-president. He wasshown the Dover housing situation by another companyexecutive. Finally, before lunch on Monday, he had a talk withall three of the Latex executives, following which—asWohlgemuth later described the scene in court—the three“removed themselves to another room for approximately tenminutes.” When they reappeared, one of them offeredWohlgemuth the position of manager of engineering for theIndustrial Products Division, which included responsibility forspace-suit development, at an annual salary of $13,700, effectiveat the beginning of December. After getting his wife’s approvalby telephone—and it was not hard to get, since she wasoriginally from Baltimore and was delighted at the prospect ofmoving back to her own part of the world—Wohlgemuthaccepted. He flew back to Akron that night. First thing Tuesdaymorning, Wohlgemuth confronted Carl Effler, his immediate bossat Goodrich, with the news that he was quitting at the end ofthe month to take another job.
“Are you kidding?” Effler asked.
“No, I am not,” Wohlgemuth replied.
Following this crisp exchange, which Wohlgemuth laterreported in court, Effler, in the time-honored tradition ofbereaved bosses, grumbled a bit about the difficulty of finding aqualified replacement before the end of the month. Wohlgemuthspent the rest of the day putting his department’s papers inorder and clearing his desk of unfinished business, and thenext morning he went to see Wayne Galloway, a Goodrichspace-suit executive with whom he had worked closely and hadbeen on the friendliest of terms for a long time; he said laterthat he felt he owed it to Galloway “to explain to him my sideof the picture” in person, even though at the moment he wasnot under Galloway’s supervision in the company chain ofcommand. Wohlgemuth began this interview by rathermelodramatically handing Galloway a lapel pin in the form of aMercury capsule, which had been awarded to him for his workon the Mercury space suits; now, he said, he felt he was nolonger entitled to wear it. Why, then, Galloway asked, was heleaving? Simple enough, Wohlgemuth said—he considered theLatex offer a step up both in salary and in responsibility.
Galloway replied that in making the move Wohlgemuth wouldbe taking to Latex certain things that did not belong tohim—specifically, knowledge of the processes that Goodrich usedin making space suits. In the course of the conversation,Wohlgemuth asked Galloway what he would do if he were toreceive a similar offer. Galloway replied that he didn’t know; forthat matter, he added, he didn’t know what he would do if hewere approached by a group who had a foolproof plan forrobbing a bank. Wohlgemuth had to base his decision onloyalty and ethics, Galloway said—a remark that Wohlgemuthtook as an accusation of bad faith. He lost his temper, he laterexplained, and gave Galloway a rash answer. “Loyalty andethics have their price, and International Latex has paid it,” hesaid.
After that, the fat was in the fire. Later in the morning, Efflercalled Wohlgemuth into his office and told him it had beendecided that he should leave the Goodrich premises as soon aspossible, staying around only long enough to make a list ofprojects that were pending and to go through certain otherformalities. In mid-afternoon, while Wohlgemuth was occupiedwith these tasks, Galloway called him and told him that theGoodrich legal department wanted to see him. In the legaldepartment, he was asked whether he intended to useconfidential information belonging to Goodrich on behalf ofLatex. According to the subsequent affidavit of a Goodrichlawyer, he replied—again rashly—“How are you going to proveit?” He was then advised that he was not legally free to makethe move to Latex. While he was not bound to Goodrich bythe kind of contract, common in American industry, in whichan employee agrees not to do similar work for any competingcompany for a stated period of time, he had, on his returnfrom the Army, signed a routine paper agreeing “to keepconfidential all information, records, and documents of thecompany of which I may have knowledge because of myemployment”—something Wohlgemuth had entirely forgotten untilthe Goodrich lawyer reminded him. Even if he had not madethat agreement, the lawyer told him now, he would beprevented from going to work on space suits for Latex byestablished principles of trade-secrets law. Moreover, if hepersisted in his plan, Goodrich might sue him.
Wohlgemuth returned to his office and put in a call to Feller,the Latex vice-president he had met in Dover. While he waswaiting for the call to be completed, he talked with Effler, whohad come in to see him, and whose attitude toward hisdefection seemed to have stiffened considerably. Wohlgemuthcomplained that he felt at the mercy of Goodrich, which, itseemed to him, was unreasonably blocking his freedom ofaction, and Effler upset him further by saying that what hadhappened during the past forty-eight hours could not beforgotten and might well affect his future with Goodrich.
Wohlgemuth, it appeared, might be sued if he left and scornedif he didn’t leave. When the Dover call came through,Wohlgemuth told Feller that in view of the new situation hewould be unable to go to work for Latex.
That evening, however, Wohlgemuth’s prospects seemed totake a turn for the better. Home in Wadsworth, he called thefamily dentist, and the dentist recommended a local lawyer.
Wohlgemuth told his story to the lawyer, who thereuponconsulted another lawyer by phone. The two counsellors agreedthat Goodrich was probably bluffing and would not really sueWohlgemuth if he went to Latex. The nextmorning—Thursday—officials of Latex called him back to assurehim that their firm would bear his legal expenses in the eventof a lawsuit, and, furthermore, would indemnify him against anysalary losses. Thus emboldened, Wohlgemuth delivered twomessages within the next couple of hours—one in person andone by phone. He told Effler what the two lawyers had toldhim, and he called the legal department to report that he hadnow changed his mind and was going to work at InternationalLatex after all. Later that day, after completing the cleanup jobin his office, he left the Goodrich premises for good, taking withhim no documents.
The following day—Friday—R. G. Jeter, general counsel ofGoodrich, telephoned Emerson P. Barrett, director of industrialrelations for Latex, and spoke of Goodrich’s concern for itstrade secrets if Wohlgemuth went to work there. Barrett repliedthat although “the work for which Wohlgemuth was hired wasdesign and construction of space suits,” Latex was notinterested in learning any Goodrich trade secrets but was “onlyinterested in securing the general professional abilities of Mr.
Wohlgemuth.” That this answer did not satisfy Jeter, orGoodrich, became manifest the following Monday. That evening,while Wohlgemuth was in an Akron restaurant called theBrown Derby, attending a farewell dinner in his honor given byforty or fifty of his friends, a waitress told him that there wasa man outside who wanted to see him. The man was adeputy sheriff of Summit County, of which Akron is the seat,and when Wohlgemuth came out, the man handed him twopapers. One was a summons to appear in the Court ofCommon Pleas on a date a week or so off. The other was acopy of a petition that had been filed in the same court thatday by Goodrich, praying that Wohlgemuth be permanentlyenjoined from, among other things, disclosing to anyunauthorized person any trade secrets belonging to Goodrich,and “performing any work for any corporation … other thanplaintiff, relating to the design, manufacture and/or sale ofhigh-altitude pressure suits, space suits and/or similar protectivegarments.”
THE need for the protection of trade secrets was fullyrecognized in the Middle Ages, when they were so jealouslyguarded by the craft guilds that the guilds’ employees wererigorously prevented from changing jobs. Laissez-faire industrialsociety, since it emphasizes the principle that the individual isentitled to rise in the world by taking the best opportunity heis offered, has been far more lenient about job-jumping, butthe right of an organization to keep its secrets has survived. InAmerican law, the basic commandment on the subject was laiddown by Justice Oliver Wendell Holmes in connection with a1905 Chicago case. Holmes wrote, “The plaintiff has the right tokeep the work which it has done, or paid for doing, to itself.
The fact that others might do similar work, if they wished, doesnot authorize them to steal plaintiff’s.” This admirably downright,if not highly sophisticated, ukase has been cited in almost everytrade-secrets case that has come up since, but over the years,as both scientific research and industrial organization havebecome infinitely more complex, so have the questions of what,exactly, constitutes a trade secret, and what constitutes stealingit. The American Law Institute’s “Restatement of the Law ofTorts,” an authoritative text issued in 1939, grapples manfullywith the first question by stating, or restating, that “a tradesecret may consist of any formula, pattern, device, orcompilation of information which is used in one’s business, andwhich gives him an opportunity to obtain an advantage overcompetitors who do not know or use it.” But in a case heardin 1952 an Ohio court decided that the Arthur Murray methodof teaching dancing, though it was unique and was presumablyhelpful in luring customers away from competitors, was not atrade secret. “All of us have ‘our method’ of doing a millionthings—our method of combing our hair, shining our shoes,mowing our lawn,” the court mused, and concluded that atrade secret must not only be unique and commercially helpfulbut also have inherent value. As for what constitutes thievery oftrade secrets, in a proceeding heard in Michigan in 1939, inwhich the Dutch Cookie Machine Company complained that oneof its former employees was threatening to use its highlyclassified methods to make cookie machines on his own, thetrial court decided that there were no fewer than three secretprocesses by which Dutch Cookie machines were made, andenjoined the former employee from using them in any manner;however, the Michigan Supreme Court, on appeal, found thatthe defendant, although he knew the three secrets, did not planto use them in his own operations, and, accordingly, it reversedthe lower court’s decision and vacated the injunction.
And so on. Outraged dancing teachers, cookie-machinemanufacturers, and others have made their way throughAmerican courts, and the principles of law regarding theprotection of trade secrets have become well established; anydifficulty arises chiefly in the application of these principles toindividual cases. The number of such cases has been risingsharply in recent years, as research and development by privateindustry have expanded, and a good index to the rate of suchexpansion is the fact that eleven and a half billion dollars wasspent in this work in 1962, more than three times the figurefor 1953. No company wants to see the discoveries producedby all that money go out of its doors in the attaché cases, oreven in the heads, of young scientists bound for greenerpastures. In nineteenth-century America, the builder of a bettermousetrap was supposed to have been a cynosure—provided,of course, that the mousetrap was properly patented. In thosedays of comparatively simple technology, patents covered mostproprietary rights in business, so trade-secrets cases were rare.
The better mousetraps of today, however, like the processesinvolved in outfitting a man to go into orbit or to the moon,are often unpatentable.
Since thousands of scientists and billions of dollars might beaffected by the results of the trial of Goodrich v. Wohlgemuth,it naturally attracted an unusual amount of public attention. InAkron, the court proceedings were much discussed both in thelocal paper, the Beacon Journal, and in conversation. Goodrichis an old-line company, with a strong streak of paternalism inits relations with its employees, and with strong feelings aboutwhat it regards as business ethics. “We were exceptionally upsetby what Wohlgemuth did,” a Goodrich executive of longstanding said recently. “In my judgment, the episode causedmore concern to the company than anything that hashappened in years. In fact, in the ninety-three years thatGoodrich has been in business, we had never before entered asuit to restrain a former employee from disclosing trade secrets.
Of course, many employees in sensitive positions have left us.
But in those cases the companies doing the hiring haverecognized their responsibilities. On one occasion, a Goodrichchemist went to work for another company undercircumstances that made it appear to us that he was going touse our methods. We talked to the man, and to his newemployer, too. The upshot was that the competing companynever brought out the product it had hired our man to workon. That was responsible conduct on the part of both employeeand company. As for the Wohlgemuth case, the localcommunity and our employees were a bit hostile toward us atfirst—a big company suing a little guy, and so on. But theygradually came around to our point of view.”
Interest outside Akron, which was evidenced by a small floodof letters of inquiry about the case, addressed to the Goodrichlegal department, made it clear that Goodrich v. Wohlgemuthwas being watched as a bellwether. Some inquiries were fromcompanies that had similar problems, or anticipated havingthem, and a surprising number were from relatives of youngscientists, asking, “Does this mean my boy is stuck in hispresent job for the rest of his life?” In truth, an importantissue was at stake, and pitfalls awaited the judge who heardthe case, no matter which way he decided. On one side wasthe danger that discoveries made in the course of corporateresearch might become unprotectable—a situation that wouldeventually lead to the drying up of private research funds. Onthe other side was the danger that thousands of scientistsmight, through their very ability and ingenuity, find themselvespermanently locked in a deplorable, and possiblyunconstitutional, kind of intellectual servitude—they would bebarred from changing jobs because they knew too much.
THE trial—held in Akron, presided over by Judge Frank H.
Harvey, and conducted, like all proceedings of its type, withouta jury&m............
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