Larry F. Knepp, Lewistown, for appellants.
Robert B. Brugler, Brugler & Levin, Lewistown, for appellees.
Jones, C. J., and Eagen, O'Brien, Roberts, Pomeroy and Nix, JJ. Manderino, J., did not participate in the consideration or decision of this case.
Appellees, John T. Felmlee, Walter J. Felmlee and Felmlee Enterprises, Inc., filed a complaint in equity to enjoin the appellants, Larry L. Lockett and Lockett Industries from using certain formula, processes and molds pertaining to the manufacture of soft fishing lures, alleging that they were trade secrets. After holding lengthy hearings, the chancellor concluded that appellees' lures were manufactured by use of a secret process, formula and mold giving the lures unique form, color, structure and soft texture which appellants used in contravention of their duty of nondisclosure arising from their confidential relationship with the appellees.
Appellee, John T. Felmlee, has been an avid Pennsylvania fisherman for years. In 1954, he set up a family operated business which eventually became Felmlee Enterprises, Inc. Felmlee Enterprises, Inc., operates out of Lewistown, Pennsylvania and is engaged in the manufacture of fishing lures. Through John Felmlee's efforts, Felmlee Enterprises, Inc., began to produce soft fishing lures which were of a different chemical composition and design from those on the market. In recognition of these design differences the United States Patent Office issued a patent to John Felmlee in 1957, covering four
different patentable ideas which go into the design of any Felmlee lure.
In addition to the unique design of the Felmlee soft lures the appellees' lures have a unique texture. Through a process of experimentation with plastics and other additives, John Felmlee was able to produce a secret chemical formula for soft plastic which gives his lures unique qualities such that the Felmlee lure has a soft texture and natural fish coloring that will not scale off. Although the separate ingredients for the formula can be purchased on the open market, it is the proper proportion of such ingredients in relation to each other which give Mr. Felmlee's soft plastic lures their unique characteristics. John Felmlee never sought any patent protection for his chemical formula for soft plastic.
John Felmlee ran the business exclusively from 1954 until he sold*fn1 his business to his son, Walter J. Felmlee, in August of 1965. During the time that John Felmlee owned the business, the formula for his soft plastic lures was kept locked in John Felmlee's office, and no one had access to it.
The appellant, Larry L. Lockett, is the son-in-law of John T. Felmlee. Mr. Lockett began to work for Felmlee Enterprises, Inc., sometime in 1962. During the period of time from 1962 to 1965, when John Felmlee exclusively owned and operated the business, Larry Lockett operated the molding machines and helped assemble lures. During this time he did not have knowledge of or access to the chemical formula for John Felmlee's soft plastic.
In October of 1965, Walter J. Felmlee began to run the business. Appellant, Larry Lockett continued to work for Walter J. Felmlee under the part-time supervision of John Felmlee. Walter Felmlee eventually placed ...