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Intellectual Property Keyed to Merges
Metallurgical Industries, Inc. v. Fourtek, Inc.
Facts
Metallurgical Industries, Inc. (Metallurgical) (Plaintiff) spent time, money, and effort to modify zinc furnaces it had purchased from a bankrupt company. A former employee (Defendant) of the bankrupt company, who had been told the process was a secret, formed Fourtek, Inc. (Defendant) and contracted with a third party to build a furnace incorporating the modifications. Plaintiff then sued, alleging a trade secret had been misappropriated. The district court ruled there was no trade secret involved in the basic zinc recovery process because the process had been publicized in the trade previousy, therefore, misappropriation did not occur. Plaintiff appealed. It countered that its modifications gave it a clear advantage over its competitors. Plaintiff also claimed that its modifications were trade secrets because the holder of a secret may communicate to employees and others pledged to secrecy without losing his protection.
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