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Smith v. Dravo Corp.

United States Court of Appeals for the Seventh Circuit
203 F.2d 369 (7th Cir. 1953)


Facts

Leathem Smith was the head of Safeway Containers (Safeway) (plaintiffs). Smith created a design for freight containers that was very successful. After Smith died, it was decided that Safeway should be sold. Dravo Corp. (Dravo) (defendant) became interested in purchasing the company. Safeway thus sent Dravo a packet of information about the company, including patent applications for and blueprints of the freight containers. Eventually Dravo rejected Safeway’s offers for sale. Thereafter, Dravo began production of freight containers that were very similar to those of Safeway, and incorporated many of Safeway’s design features. The plaintiffs brought suit for misappropriation of trade secrets. At trial, Dravo engineers testified that they used Safeway’s patent applications in manufacturing their container, but only to avoid patent infringement. In addition, it was revealed that Dravo revised its design to be more similar to Safeway’s design at the urging of a customer. The trial court found in favor of Dravo. The plaintiffs appealed.

Rule of Law

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Issue

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Holding and Reasoning (Lindley, J.)

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  • A "yes" or "no" answer to the question framed in the issue section;
  • A summary of the majority or plurality opinion, using the CREAC method; and
  • The procedural disposition (e.g. reversed and remanded, affirmed, etc.).

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