Metallurgical Industries Inc. v. Fourtek, Inc.
Fifth Circuit
790 F.2d 1195 (5th Cir. 1986)
Metallurgical Industries, Inc. (plaintiff) bought two zinc-recovery furnaces from Therm-O-Vac to reclaim carbide and made significant modifications to improve their performance, at substantial time, effort, and cost. A former Therm-O-Vac employee, Irvin Bielefeldt, later formed Fourtek, Inc. (defendant), which began building and selling furnaces using Metallurgical's modification process. Metallurgical sued for trade-secret misappropriation. At trial, Metallurgical showed it had shared the process with only two companies it was planning to do business with, that it had spent significant resources developing the modifications, and that its vice president testified the process produced a better zinc product than competitors achieved. The district court granted a directed verdict for the defendants, finding no trade secret existed.
Whether information is a trade secret when the subject matter is actually secret, was discovered at some cost to the plaintiff, and is of some value to the plaintiff.