Robert J. Alderman v. Tandy Corporation, D/B/A Radio Shack

Citations: 720 F.2d 1234; 38 Fed. R. Serv. 2d 102; 222 U.S.P.Q. (BNA) 806; 1983 U.S. App. LEXIS 14790Docket: 82-3019

Court: Court of Appeals for the Eleventh Circuit; December 5, 1983; Federal Appellate Court

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Robert J. Alderman sued Tandy Corporation for patent infringement and breach of a trade secret agreement. The jury rejected Alderman's trade secret claim but issued an advisory verdict favoring him on the patent infringement claim; however, the district judge dismissed this advisory verdict, ruling against Alderman on both claims. Alderman's motions for a directed verdict and judgment notwithstanding the verdict (n.o.v.) on the trade secret claim were denied, leading to his appeal. The appellate court found no error in the district judge's decisions, noting Alderman did not request a new trial in the district court, which precluded the appellate court from ordering one. Therefore, the judgment of the district court was affirmed.

Alderman, a self-taught inventor, developed a controlled carrier circuit aimed at improving battery life in walkie-talkies by regulating the broadcast of unmodulated carrier signals. He filed a patent application in 1974, which was granted in 1977. Following this, he engaged with Radio Shack, leading to the development and marketing of a walkie-talkie utilizing his invention. The dispute arose when Alderman alleged Radio Shack used his circuit without compensation during negotiations, while Radio Shack argued the circuit lacked novelty. The jury ultimately sided with Radio Shack, and the appellate court upheld the findings, concluding there was substantial evidence supporting the jury's decision against Alderman.

In K. G Oil Tool Co. v. G. G Fishing Tool Service, the Texas Supreme Court established that a trade secret can encompass a device or process that is patentable but does not have to be; it can also be a mechanical improvement or an idea already anticipated in prior art. Unlike patents, trade secrets do not require novelty or invention, though they must possess some originality beyond common knowledge. Alderman argued that his improved circuit, based on the known principle of controlled carrier, constituted a trade secret, asserting that Radio Shack failed to present substantial evidence to counter his claim. Radio Shack's expert, Nathan Sokul, testified that Alderman's use of modern transistors instead of vacuum tubes was obvious and did not meet the originality threshold. Although Alderman provided expert testimony to refute Sokul's claims, the court held that it was the jury's role to weigh the evidence, not the court's.

The jury found Radio Shack had infringed Alderman's patent but did not support his trade secret claim, leading to a self-contradictory verdict. The court expressed concern over the inconsistency and acknowledged Alderman's grounds for a new trial, which he did not formally request. The court also addressed the standards for granting new trials, emphasizing that it would be inappropriate for them to grant a new trial sua sponte, especially since the district court had not done so.

Alderman had the opportunity to file for a new trial but opted not to, instead seeking a judgment notwithstanding the verdict (n.o.v.) on his trade secret claim, requesting approximately $60,000 in damages awarded by the jury on the patent claim. The court likens Alderman's decision to a fable about a dog dropping a bone for a reflection, indicating he abandoned a valid motion for a new trial in favor of a less favorable n.o.v. request, which resulted in a loss for him. The court acknowledges criticisms of prior cases but determines that this situation is not suitable for sua sponte ordering a new trial since Alderman could have combined his motions. His choices, made without complaint of unforeseen consequences, led to the affirmation of the district court's judgment. The court also notes that even if it reversed the district court's decision, it could not combine damages from different claims, as patent infringement and trade secret breach damages are assessed differently. The judgment is affirmed, with Texas law governing the case.