Group One, Ltd. v. Hallmark Cards, Inc.

Frederic Goldstein, a United States citizen, was the managing director of Group One, Ltd. (plaintiff), a corporation registered in the United Kingdom. In 1991, Goldstein filed a UK patent application for an automated device that curled and shred ribbons. In 1992, Goldstein arranged a meeting with Hallmark Cards, Inc. (Hallmark) (defendant) to interest Hallmark in the device. Before the meeting, the parties negotiated a confidential disclosure agreement (CDA). Goldstein signed the CDA, but—unknown to Goldstein—Hallmark did not. Goldstein discussed details of the device in a conference call with Hallmark, which later informed Goldstein that it had developed a similar machine and had no need for Goldstein’s device. Later in 1992, Goldstein filed an international patent application under the Patent Cooperation Treaty (PCT). The PCT application was published in 1993. Hallmark began producing its ribbon-curling machine in 1995. Group One brought suit in federal district court for trade-secret misappropriation. It was agreed that Missouri common law applied. The district court concluded that the Missouri Supreme Court would find in favor of Hallmark, holding that trade-secret status ended with the 1993 publication of the PCT application. The court ruled that Hallmark could be liable for damages for any head start encompassing the period between the 1991 conference call and the 1993 publication, though Group One stipulated that it could not prove damages for that time period. Group One appealed to the United States Court of Appeals for the Federal Circuit.