Martin Causton Filed for a Patent on a Consumer Freezer

question 6

Essay

Martin Causton filed for a patent on a consumer freezer package sealing device on November 12, 2002. The application was published on May 12, 2003, and the patent issued on May 12, 2004. Causton's invention permits a consumer to put an airtight seal on packages of frozen food using a combination of an adhesive and heat, thus ensuring that the frozen food will remain of highest quality and not suffer "freezer burn."
Before filing his application, Causton attempted to generate interest in his device among manufacturers of plastic freezer bags. On June 23, 2001, he wrote to HappyWrap, Inc., a manufacturer of plastic storage bags:
We have developed a machine which can produce the product you see enclosed-a home freezer bag from which all air has been extracted and on which an airtight seal has been placed, thus ensuring the contents do not suffer freezer burn. The machine has been finalized and perfected and is ready for the consumer market, and we are prepared to sell or license this technology to one manufacturer on an exclusive basis immediately. Please let us know of your interest promptly.
The letter also set forth separate terms for sale and licensing of the terms.
HappyWrap expressed interest in the technology, and the parties entered into some correspondence about the matter. Ultimately, they scheduled a meeting for February 17, 2002, to discuss the invention. Prior to the meeting, the parties negotiated a Confidential Disclosure Agreement "CDA") regarding the technology to be discussed at the meeting. However, HappyWrap never signed it. On February 14, 2002, shortly before the scheduled meeting, Causton had a telephone conference with a HappyWrap engineer, in which the parties discussed details of Causton's machine and method. At the time, Causton had signed the CDA and incorrectly) thought HappyWrap had done so as well. HappyWrap cancelled the planned February 17 meeting, deciding it would instead evaluate its own internal capability of producing a sealing machine.
On June 6, 2002, HappyWrap sent a letter to Causton, indicating that it had "developed our own machine for sealing home freezer bags, and therefore we are not presently interested in purchasing such a machine from your firm." The letter went on to state: "We would like to thank your firm for suggesting the sealed home freezer bag product to us by paying you $500." Apparently anticipating a claim of misappropriation, the letter specifically pointed out that HappyWrap had never signed the CDA "pending our internal consideration of such product," and requested that Causton sign a release "on account of our use of the sealed home freezer bag idea" in return for the $500 payment. The letter makes no mention of the telephone conference of February 14, 2002 or the information HappyWrap obtained during the conference. Causton declined the $500 and did not sign the release.
Sometime in March or April 2005, HappyWrap began producing and selling its "SealFast" product - a consumer home freezer bag sealing device.
Causton has filed suit against HappyWrap for 1) patent infringement and 2) trade secret theft.
How should the court respond to each of these claims?
Analyze each issue separately.

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Definitions:

Vascular Strand

Tissue in plants that contains xylem and phloem, responsible for the transportation of water, nutrients, and sugars.

Stem Tissue

The supportive and conductive tissues in the stem of a plant, responsible for transporting nutrients and water throughout the plant.

Whisk Ferns

Primitive, seedless vascular plants belonging to the genus Psilotum, characterized by their simple, whisk-like appearance without true leaves or roots.

Dichotomous Branching

A form of plant or fungal growth where branches repeatedly divide into two parts, leading to a 'Y'-shaped pattern.