Valco Cincinnati, Inc. v. N&D Machining Service, Inc

492 N.E.2d 814 (1986)

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Nature of the Case

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Facts

P had technology which precisely dispensed glue through an applicator head. It developed that technology through its engineering department. Over a 24-year period, P had developed materials, processes, dimensions and tolerances in order to get its products to work. P claimed that this information was a trade secret. Draginoff (D) was hired by P as a machinist and had no prior experience in P’s line of business. When he was promoted to production manager, D became familiar with all of P’s trade secrets and also that he was expected as a condition of employment to keep the information confidential. D asked P if it was ok for him to set up a machine shop in his brother’s garage to procure outside work. D was given the ok provided it did not interfere with D’s job. D was joined by a third brother and they incorporated N&D (D). None of the brothers had any prior experience in glue application. D contracted with P to make P parts and gained access to all the detailed drawings and a special jig to make applicator heads. The jig was never returned to P. D resigned from P and P then learned that D had been manufacturing glue equipment for P’s competitor using P’s secrets. The equipment was offered at lower pricing. The trial court found for P in that the information was a trade secret, that P had reasonably provided security to keep the secrets and then it permanently enjoined D from producing replacement P parts. This appeal resulted.