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Metallurgical Industries Inc. v. Fourtek, Inc.

790 F.2d 1195 (5th Cir. 1986)

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Metallurgical Industries Inc. v. Fourtek, Inc.

United States Court of Appeals for the Fifth Circuit

790 F.2d 1195 (5th Cir. 1986)

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Facts

Therm-O-Vac Engineering & Manufacturing Co. (Therm-O-Vac) sold two zinc recovery furnaces to Metallurgical Industries, Inc. (Metallurgical) (plaintiff) for the purpose of reclaiming carbide. Metallurgical extensively modified the furnaces to make them perform better. Subsequently, Irvin Bielefeldt, a former Therm-O-Vac employee, formed Fourtek, Inc. (defendants). Fourtek began manufacturing and selling zinc recovery furnaces using Metallurgical’s modification process. Metallurgical brought suit for misappropriation of trade secrets. At trial, Metallurgical testified that it only divulged the process to two other companies and that Metallurgical was planning to conduct business with those companies. In addition, Metallurgical showed that it put forth significant time, effort, and money to make the modifications. Finally, Metallurgical’s vice president testified that the modification process resulted in a better zinc product than that which came from its competitors. The district court granted the defendants’ motion for directed verdict, finding that no trade secret was involved in the case. Metallurgical appealed.

Rule of Law

Issue

Holding and Reasoning (Gee, J.)

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