E. I. DuPont deNemours & Co., Inc. v. Rolfe Christopher

Appellant: Rolfe and Gary Christopher, photographers, residents of Beaumont, Texas
Appellee: E. I. DuPont deNemours & Co., Inc.
Venue: United States Court of Appeals, Fifth Circuit

Material Facts:

• Rolfe and Gary Christopher, photographers, hired by unnamed "third party to take aerial photographs of new construction at the Beaumont plant" of DuPont.
• DuPont had taken reasonable means to protect its trade secret.
• Full Recounting of Facts (below)

Procedural History:

• DuPont sued the Christophers "alleging that the Christophers had wrongfully obtained photographs revealing DuPont's trade secrets which they then sold to the undisclosed third party".
• Trial court denied appellant's motion to dismiss for failure to state a claim for which relief can be granted (12B6).
• Trial court granted appellant's motion for interlocutory appeal of appellant's 12B6 motion.

Issues:

Holding(s) and Disposition:

Rationale

• Appeals court jurisdiction based upon diversity of citizenship.
• Texas law applies due to Erie Doctrine.
• Appellants assert 12B6 in that they committed no "actionable wrong" due to: public airspace; no violation of gov't aviation rules; no breach of confidence; no fraudulent or illegal conduct.
• Appelants's list of "actionable wrongs" is not exhaustive. (Texas Supreme Court Restatement of Torts commenting on Improper means of discovery)
• Texas Supreme Court Restatement of Torts includes liability if "he discovered the secret by improper means, ..." (Hyde Corporation v. Huffines, 1958).
• Improper means are those "which fall below the generally accepted standards of commercial morality and reasonable conduct...." (Texas Supreme Court supra)
• Appeals Court concludes that "aerial photography of plant construction is an improper means of obtaining another's trade secret".
• Majority Full Argument (below)

Full Recounting of Facts

• Rolfe and Gary Christopher, photographers, hired by unnamed "third party to take aerial photographs of new construction at the Beaumont plant" of DuPont.
• Sixteen (16) photographs taken on March 19th, 1969.
• Photographs "later developed and delivered to the third party".
• DuPont employees at the plant noticed the aircraft circling the plant.
• DuPont began to investigate immediately.
• That afternoon, DuPont had determined that the Christophers aboard the aircraft had photographed the plant.
• That afternoon, DuPont asked the Christophers for the name of the third party that had hired the Christophers.
• Christophers refused citing third party's "desire to remain anonymous".
• DuPont sued the Christophers in ??? "alleging that the Christophers had wrongfully obtained photographs revealing DuPont's trade secrets which they then sold to the undisclosed third party".
• DuPont sought "damages to cover the loss it had already sustained as a result of the wrongful disclosure ... and sought temporary and permanent injuction prohibiting any further circulation of the photographs and additional photographing".
• DuPont "contended that it had developed a highly secret but unpatented process .... after much expensive and time-consuming research".
• DuPont contented that it had "taken special precautions to safeguard" the trade secret.
• The trade secret information was available due to the plant being under construction and exposed to view from above.
• DuPont contends that the photographs alone are sufficient to deduce the trade secret.
• Christophers responded with 1) motion to dismiss for lack of jurisdiction (diversity of citizenship) and 2) failure to start claim (12B6)
• Depositions taken, continued refusal by Christophers to reveal third party.
• DuPont "filed a motion to compel an answer [from the Christophers] to this question and all related questions".
• June 5th, 1969, "trial court held a hearing on all pending motions and an additional motion by the Christophers for summary judgement".
• Court denied motion to dismiss, 12B6, and summary judgement.
• Court granted ... motion to compel.
• Court granted interlocutory appeal regarding 12B6.
• Material Facts (above)

Majority Full Argument

• Diverity of citizenship jurisdiction.
• Texas law applicable.
• Case of first impression..."no precise factual issue" precedent.
• Christopher's assert 12B6 in that they committed no "actionable wrong" because: public airspace; no violation of gov't aviation rules; no breach of confidence; no fraudulent or illegal conduct.
• Christopher's argue that "wrongful" would require at least one of: trespass; other illegal conduct; breach of confidence.
• All "previous trade secret cases have contained one or more of these elements".
• Opinion of this court that the list above is not exhaustive.
• Texas Supreme Court Restatement of Torts includes liability if "he discovered the secret by improper means, ..." (Hyde Corporation v. Huffines, 1958).
• Improper means are those "which fall below the generally accepted standards of commercial morality and reasonable conduct...."
• Appeals Court concludes that "aerial photography of plant construction is an improper means of obtaining another's trade secret".
• Proper means of discovery of trade secrets are "through inspection and analysis" of the product: "reverse engineering of applied to the finished product".
• DuPont had taken reasonable means to protect its trade secret.
• DuPont "has a valid cause of action to prohibit the Christophers from improperly discovering its trade secret and to prohibit the undisclosed third party from using the improperly obtained information".
• Majority Rationale (above)