by John Brooks
“No, I am not,” Wohlgemuth replied.
Following this crisp exchange, which Wohlgemuth later reported in court, Effler, in the time-honored tradition of bereaved bosses, grumbled a bit about the difficulty of finding a qualified replacement before the end of the month. Wohlgemuth spent the rest of the day putting his department’s papers in order and clearing his desk of unfinished business, and the next morning he went to see Wayne Galloway, a Goodrich space-suit executive with whom he had worked closely and had been on the friendliest of terms for a long time; he said later that he felt he owed it to Galloway “to explain to him my side of the picture” in person, even though at the moment he was not under Galloway’s supervision in the company chain of command. Wohlgemuth began this interview by rather melodramatically handing Galloway a lapel pin in the form of a Mercury capsule, which had been awarded to him for his work on the Mercury space suits; now, he said, he felt he was no longer entitled to wear it. Why, then, Galloway asked, was he leaving? Simple enough, Wohlgemuth said—he considered the Latex offer a step up both in salary and in responsibility. Galloway replied that in making the move Wohlgemuth would be taking to Latex certain things that did not belong to him—specifically, knowledge of the processes that Goodrich used in making space suits. In the course of the conversation, Wohlgemuth asked Galloway what he would do if he were to receive a similar offer. Galloway replied that he didn’t know; for that matter, he added, he didn’t know what he would do if he were approached by a group who had a foolproof plan for robbing a bank. Wohlgemuth had to base his decision on loyalty and ethics, Galloway said—a remark that Wohlgemuth took as an accusation of bad faith. He lost his temper, he later explained, and gave Galloway a rash answer. “Loyalty and ethics have their price, and International Latex has paid it,” he said.
After that, the fat was in the fire. Later in the morning, Effler called Wohlgemuth into his office and told him it had been decided that he should leave the Goodrich premises as soon as possible, staying around only long enough to make a list of projects that were pending and to go through certain other formalities. In mid-afternoon, while Wohlgemuth was occupied with these tasks, Galloway called him and told him that the Goodrich legal department wanted to see him. In the legal department, he was asked whether he intended to use confidential information belonging to Goodrich on behalf of Latex. According to the subsequent affidavit of a Goodrich lawyer, he replied—again rashly—“How are you going to prove it?” He was then advised that he was not legally free to make the move to Latex. While he was not bound to Goodrich by the kind of contract, common in American industry, in which an employee agrees not to do similar work for any competing company for a stated period of time, he had, on his return from the Army, signed a routine paper agreeing “to keep confidential all information, records, and documents of the company of which I may have knowledge because of my employment”—something Wohlgemuth had entirely forgotten until the Goodrich lawyer reminded him. Even if he had not made that agreement, the lawyer told him now, he would be prevented from going to work on space suits for Latex by established principles of trade-secrets law. Moreover, if he persisted 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 was waiting for the call to be completed, he talked with Effler, who had come in to see him, and whose attitude toward his defection seemed to have stiffened considerably. Wohlgemuth complained that he felt at the mercy of Goodrich, which, it seemed to him, was unreasonably blocking his freedom of action, and Effler upset him further by saying that what had happened during the past forty-eight hours could not be forgotten and might well affect his future with Goodrich. Wohlgemuth, it appeared, might be sued if he left and scorned if he didn’t leave. When the Dover call came through, Wohlgemuth told Feller that in view of the new situation he would be unable to go to work for Latex.
That evening, however, Wohlgemuth’s prospects seemed to take a turn for the better. Home in Wadsworth, he called the family dentist, and the dentist recommended a local lawyer. Wohlgemuth told his story to the lawyer, who thereupon consulted another lawyer by phone. The two counsellors agreed that Goodrich was probably bluffing and would not really sue Wohlgemuth if he went to Latex. The next morning—Thursday—officials of Latex called him back to assure him that their firm would bear his legal expenses in the event of a lawsuit, and, furthermore, would indemnify him against any salary losses. Thus emboldened, Wohlgemuth delivered two messages within the next couple of hours—one in person and one by phone. He told Effler what the two lawyers had told him, and he called the legal department to report that he had now changed his mind and was going to work at International Latex after all. Later that day, after completing the cleanup job in his office, he left the Goodrich premises for good, taking with him no documents.
The following day—Friday—R. G. Jeter, general counsel of Goodrich, telephoned Emerson P. Barrett, director of industrial relations for Latex, and spoke of Goodrich’s concern for its trade secrets if Wohlgemuth went to work there. Barrett replied that although “the work for which Wohlgemuth was hired was design and construction of space suits,” Latex was not interested in learning any Goodrich trade secrets but was “only interested in securing the general professional abilities of Mr. Wohlgemuth.” That this answer did not satisfy Jeter, or Goodrich, became manifest the following Monday. That evening, while Wohlgemuth was in an Akron restaurant called the Brown Derby, attending a farewell dinner in his honor given by forty or fifty of his friends, a waitress told him that there was a man outside who wanted to see him. The man was a deputy sheriff of Summit County, of which Akron is the seat, and when Wohlgemuth came out, the man handed him two papers. One was a summons to appear in the Court of Common Pleas on a date a week or so off. The other was a copy of a petition that had been filed in the same court that day by Goodrich, praying that Wohlgemuth be permanently enjoined from, among other things, disclosing to any unauthorized person any trade secrets belonging to Goodrich, and “performing any work for any corporation … other than plaintiff, relating to the design, manufacture and/or sale of high-altitude pressure suits, space suits and/or similar protective garments.”
THE need for the protection of trade secrets was fully recognized in the Middle Ages, when they were so jealously guarded by the craft guilds that the guilds’ employees were rigorously prevented from changing jobs. Laissez-faire industrial society, since it emphasizes the principle that the individual is entitled to rise in the world by taking the best opportunity he is offered, has been far more lenient about job-jumping, but the right of an organization to keep its secrets has survived. In American law, the basic commandment on the subject was laid down by Justice Oliver Wendell Holmes in connection with a 1905 Chicago case. Holmes wrote, “The plaintiff has the right to keep the work which it has done, or paid for doing, to itself. The fact that others might do similar work, if they wished, does not authorize them to steal plaintiff’s.” This admirably downright, if not highly sophisticated, ukase has been cited in almost every trade-secrets case that has come up since, but over the years, as both scientific research and industrial organization have become infinitely more complex, so have the questions of what, exactly, constitutes a trade secret, and what constitutes stealing it. The American Law Institute’s “Restatement of the Law of Torts,” an authoritative text issued in 1939, grapples manfully with the first question by stating, or restating, that “a trade secret may consist of any formula, pattern, device, or compilation of information which is used in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it.” But in a case heard in 1952 an Ohio court decided that the Arthur Murray method of teaching dancing, though it was unique and was presumably helpful in luring customers away from competitors, was not a trade secret. “All of us have ‘our method’ of doing a million things—our method of combing our hair, shining our shoes, mowing our lawn,” the co
urt mused, and concluded that a trade secret must not only be unique and commercially helpful but also have inherent value. As for what constitutes thievery of trade secrets, in a proceeding heard in Michigan in 1939, in which the Dutch Cookie Machine Company complained that one of its former employees was threatening to use its highly classified methods to make cookie machines on his own, the trial court decided that there were no fewer than three secret processes by which Dutch Cookie machines were made, and enjoined the former employee from using them in any manner; however, the Michigan Supreme Court, on appeal, found that the defendant, although he knew the three secrets, did not plan to use them in his own operations, and, accordingly, it reversed the lower court’s decision and vacated the injunction.
And so on. Outraged dancing teachers, cookie-machine manufacturers, and others have made their way through American courts, and the principles of law regarding the protection of trade secrets have become well established; any difficulty arises chiefly in the application of these principles to individual cases. The number of such cases has been rising sharply in recent years, as research and development by private industry have expanded, and a good index to the rate of such expansion is the fact that eleven and a half billion dollars was spent in this work in 1962, more than three times the figure for 1953. No company wants to see the discoveries produced by all that money go out of its doors in the attaché cases, or even in the heads, of young scientists bound for greener pastures. In nineteenth-century America, the builder of a better mousetrap was supposed to have been a cynosure—provided, of course, that the mousetrap was properly patented. In those days of comparatively simple technology, patents covered most proprietary rights in business, so trade-secrets cases were rare. The better mousetraps of today, however, like the processes involved in outfitting a man to go into orbit or to the moon, are often unpatentable.
Since thousands of scientists and billions of dollars might be affected by the results of the trial of Goodrich v. Wohlgemuth, it naturally attracted an unusual amount of public attention. In Akron, the court proceedings were much discussed both in the local paper, the Beacon Journal, and in conversation. Goodrich is an old-line company, with a strong streak of paternalism in its relations with its employees, and with strong feelings about what it regards as business ethics. “We were exceptionally upset by what Wohlgemuth did,” a Goodrich executive of long standing said recently. “In my judgment, the episode caused more concern to the company than anything that has happened in years. In fact, in the ninety-three years that Goodrich has been in business, we had never before entered a suit 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 have recognized their responsibilities. On one occasion, a Goodrich chemist went to work for another company under circumstances that made it appear to us that he was going to use our methods. We talked to the man, and to his new employer, too. The upshot was that the competing company never brought out the product it had hired our man to work on. That was responsible conduct on the part of both employee and company. As for the Wohlgemuth case, the local community and our employees were a bit hostile toward us at first—a big company suing a little guy, and so on. But they gradually came around to our point of view.”
Interest outside Akron, which was evidenced by a small flood of letters of inquiry about the case, addressed to the Goodrich legal department, made it clear that Goodrich v. Wohlgemuth was being watched as a bellwether. Some inquiries were from companies that had similar problems, or anticipated having them, and a surprising number were from relatives of young scientists, asking, “Does this mean my boy is stuck in his present job for the rest of his life?” In truth, an important issue was at stake, and pitfalls awaited the judge who heard the case, no matter which way he decided. On one side was the danger that discoveries made in the course of corporate research might become unprotectable—a situation that would eventually lead to the drying up of private research funds. On the other side was the danger that thousands of scientists might, through their very ability and ingenuity, find themselves permanently locked in a deplorable, and possibly unconstitutional, kind of intellectual servitude—they would be barred 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, without a jury—began on November 26th and continued through December 12th, with a week’s recess in the middle; Wohlgemuth, who was supposed to have started work at Latex on December 3rd, remained in Akron under a voluntary agreement with the court, and testified extensively in his own defense. Injunction, the form of relief that was sought by Goodrich and the chief form of relief that is available to anyone whose secrets have been stolen, is a remedy that originated in Roman law; it was anciently called “interdict,” and is still so called in Scotland. What Goodrich was asking, in effect, was that the court issue a direct order to Wohlgemuth not only forbidding him to reveal Goodrich secrets but also forbidding him to take employment in any other company’s space-suit department. Any violation of such an order would be contempt of court, punishable by a fine, or imprisonment, or both. Just how seriously Goodrich viewed the case became clear when its team of lawyers proved to be headed by Jeter himself, who, as vice-president, secretary, the company’s ultimate authority on patent law, general law, employee relations, union relations, and workmen’s compensation, and Lord High Practically Everything Else, had not found time to try a case in court himself for ten years. The chief defense counsel was Richard A. Chenoweth, of the Akron law firm of Buckingham, Doolittle & Burroughs, which Latex, though it was not a defendant in the action, had retained to handle the case, in fulfillment of its promise to Wohlgemuth.
From the outset, the two sides recognized that if Goodrich was to prevail, it had to prove, first, that it possessed trade secrets; second, that Wohlgemuth also possessed them, and that a substantial peril of disclosure existed; and, third, that it would suffer irreparable injury if injunctive relief was not granted. On the first point, Goodrich attorneys, through their questioning of Effler, Galloway, and one other company employee, set out to establish that Goodrich had a number of unassailable space-suit secrets, among them a way of making the hard shell of a space helmet, a way of making the visor seal, a way of making a sock ending, a way of making the inner liner of gloves, a way of fastening the helmet onto the rest of the suit, and a way of applying a wear-resistant material called neoprene to two-way-stretch fabric. Wohlgemuth, through his counsel’s cross-examinations, sought to show that none of these processes were secrets at all; for example, in the case of the neoprene process, which Effler had described as “a very critical trade secret” of Goodrich, defense counsel brought out evidence that a Latex product that is neither secret nor intended to be worn in outer space—the Playtex Golden Girdle—was made of two-way-stretch fabric with neoprene applied to it, and, to emphasize the point, Chenoweth introduced a Playtex Golden Girdle for all to see. Nor did either side neglect to bring into court a space suit, in each instance inhabited. The Goodrich suit, a 1961 model, was intended to demonstrate what the company had achieved by means of research—research that it did not want to see compromised through the loss of its secrets. The Latex suit, also a 1961 model, was intended to show that Latex was already ahead of Goodrich in space-suit development and would therefore have no interest in stealing Goodrich secrets. The Latex suit was particularly bizarre-looking, and the Latex employee who wore it in court looked almost excruciatingly uncomfortable, as if he were unaccustomed to the air of earth, or of Akron. “His air tubes weren’t hooked up, and he was hot,” the Beacon Journal explained next day. At any rate, after he had sat suffering for ten or fifteen minutes while defense counsel questioned a witness about his costume, he suddenly pointed in an agonized way to his head, and the court record of what followed, probably unique in the annals of jurisprudence, reads like this:
MAN IN THE SPACE SUIT:
May I take this off? (Helmet).…
THE COURT: All right.
The second element in Goodrich’s burden of proof—that Wohlgemuth was privy to Goodrich secrets—was fairly quickly dealt with, because Wohlgemuth’s lawyers conceded that hardly anything the company knew about space suits had been kept from him; they based their defense on, first, the unquestioned fact that he had taken no papers away with him and, second, the unlikelihood that he would be able to remember the details of complex scientific processes, even if he wanted to. On the third element—the matter of irreparable injury—Jeter pointed out that Goodrich, which had made the first full-pressure flying suit in history, for the late Wiley Post’s high-altitude experiments in 1934, and which had since poured vast sums into space-suit research and development, was the unquestioned pioneer and had up to then been considered the leader in the field; he tried to paint Latex, which had been making full-pressure suits only since the mid-fifties, as a parvenu with the nefarious plan of cashing in on Goodrich’s years of research by hiring Wohlgemuth. Even if the intentions of Latex and Wohlgemuth were the best in the world, Jeter contended, Wohlgemuth would inevitably reveal Goodrich secrets in the course of working in Latex’s space-suit department. In any event, Jeter was unwilling to assume good intentions. As evidence of bad ones, there was, on the part of Latex, the fact that the firm had deliberately sought out Wohlgemuth, and, on the part of Wohlgemuth, the statement he had made to Galloway about the price of loyalty and ethics. The defense disputed the contention that a disclosure of secrets would be inevitable, and, of course, denied evil intentions on anyone’s part. It rounded out its case with a statement made in court under oath by Wohlgemuth: “I will not reveal [to International Latex] any items which in my own mind I would consider to be trade secrets of the B. F. Goodrich Company.” This, of course, was cold comfort to Goodrich.