Thursday, July 12, 2012

Markham V/s CVD Incorporated

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A Trade Secret as defined by the Uniform Trade Secret Act (UTSA) could be a formula, a process, a device, or item of information used by a business that has economic value because it is not generally known or easily discovered by observation or examination and for which reasonable efforts to maintain secrecy have been made.

The following types of information have previously been found to qualify as proper trade secret subject matter:

1. Customer lists

2. Chemical processes and formulas

3. Algorithms and processes that are implemented in computer programs and the programs themselves

4. Designs, drawings, architectural plans and blueprints

5. Data compilations, business plans and methods of doing business

6. Manufacturing or repair processes and techniques.

The points in favor of Markham’s claims of Trade secrets are

1. Markham had employed and trained many employees in its Advanced Materials Division to be experts in the Chemical Vapor Deposition manufacturing technique and in 180 was the only company with a staff of seven members capable of producing ZnSe and ZnS by the CVD process.

2. Over this extended research period, Markham had developed what it claimed as unique and sophisticated methods and equipment for the production of ZnSe and ZnS by the CVD process. Some of these developments are as listed below:

• The Passivation Gas Mixture (gaseous mixture of nitrogen and oxygen which was used to stabilize zinc dust before scrubbing out the discharge lined from the furnace) the discovery of which was prompted by the three fires and two explosions that occurred in the plant.

• Alumina Insert Hydrogen Sulfide Injector which prevented the corrosion of the stainless steel mixing chamber. The positioning of the Alumina insert was critical because corrosion would make it impossible to complete the long furnace phase of the CVD process.

• Hexagonal Graphite Nut placed inside the sulfide injector assembly to allow uniform distribution of argon gas which contributed heavily to the quality of zinc sulfide manufactured.

These developments have an associated economic value, since they contributed heavily towards the quality of the products being manufactured hwhich in this case was essential (impure Zinc Selenide or Zinc Sulfide would not transmit infrared light or lasers properly). This was one of the major reasons why Markham could outstrip Eastman Kodak’s ZnSe and ZnS made by the “hot pressing process”.

The points against Markham’s claims of Trade Secrets are

1. Markham’s Chemical Vapor Deposition (CVD) manufacturing process was based on the Vapor Phase Crystallization process for manufacture of semi conductive crystals, an invention patented to H.J. Gould. The patent clearly outlined the improved methods and apparatus (metal wire fed through capillary passage formed of suitable inert material such as quartz) for supplying to a furnace chamber the vapor of a metallic component that is solid at normal temperature. Markham used this technique for the manufacture of its products Zinc Selenide (ZeSe) and Zinc Sulfide (ZnS) for the government.

2. Markham had a computer system which listed all information that the company officially protected as trade secrets but the CVD process for manufacture of ZnSe and Zns were not protected by this system.

3. Markham had disclosed elements of the CVD process in government reports, lectures and films. These disclosures included information about Markham’s hexagonal graphite nut. Markham’s expert witness testified (under cross examination) that a “competent” engineer could construct Markham’s manufacturing process from the information disclosed in the government reports. These disclosures indicate that Markham Inc. never intended hiding their secrets pertaining to the manufacture of ZnSe and ZnS by the CVD process.

4. Markham’s expert witness admitted (under cross examination) that the Passifivation Gas mixture was common knowledge in the industry. The witness also admitted to the fact that a corrosion resistant material would be needed to prevent the corrosion of the stainless steel injector tip would be obvious to any engineer and Alumina would be a natural choice because of its properties of inertness and high melting point.

My Decision

Markham had made several developments and improvements on the CVD process for the manufacture of their products namely, ZnSe and ZnS but had not made any reasonable effort to protect the confidentiality of these developments and improvements. Some of the claimed improvements were practiced and commonly known in the industry.

After careful consideration of the evidence provided and the testimonies of both parties, as a member of the jury I would vote against Markham’s claims of possessing trade secrets.



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