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Publication Date

1970

Abstract

THE Fifth Circuit Court of Appeals, sitting in Atlanta, recently decided the case of Water Services, Inc. v. Tesco Chemicals, Inc. The facts of this case, which concerned trade secrecy and noncompete agreements, had occurred in so many similar cases as to be classic, if not hackneyed. The decision of Judge Wisdom, however, has con- siderably more significance than the rather commonplace facts would indicate. The case developed in the traditional manner: a new employee was exposed to a secret, but not patented, process; and after learning all of the details of the process, he entered the employ of his former employer's leading rival. The employee then proceeded to divulge his accumulated knowledge of his former employer's secret development. The plaintiffs in the action were two companies operating under the direction of one Clyde Farris; they manufactured and sold a fully automatic water purification system. Large modern buildings heating and cooling systems use substantial quantities of piping through which water circulates. If this water is not as pure as possible, scale, incrustations and algae accumulate on the inside of the pipes. These accumulations both reduce the efficiency of the system and tend to cause corrosion. There are several ways of removing this undesirable matter, but all save one are rather inefficient and expensive. The device developed by Farris was automatic, a common claim in the purification business; but this one had the unusual features of being genuinely automatic, simple and easy to operate, and popular. Farris' product was marketed as the TREAT-A-MATIC and was lucrative and proved, both in respect of the initial installation charges and the cost of chemicals needed to operate the installation.

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