## Facts

- Chicago Lock Company manufactured “Ace” tubular locks and kept internal correlations between lock serial numbers and key codes secret.
- The company limited duplicate-key sales to verified owners, refused to sell tubular key blanks to locksmiths, and marked keys “Do Not Duplicate.”
- When owners lost keys, locksmiths could lawfully pick the lock, determine the tumbler configuration, and create a replacement key; locksmiths often recorded the resulting key code with the lock serial number for later use.
- Victor and Morris Fanberg solicited locksmiths nationwide to send serial number–key code correlations in exchange for a completed compilation.
- The Fanbergs published and sold a two-volume manual containing tubular lock codes, including Ace codes, and sold about 350 copies; the trial court found the manuals could reach non-locksmith purchasers.
- Chicago Lock sued for trademark infringement and unfair competition based on alleged trade secret misappropriation of the serial number–key code correlations.
- The district court granted summary judgment for defendants on the trademark claim; after trial, it held the correlations were protectable trade secrets and that defendants had misappropriated them, entering judgment for Chicago Lock.

## Issues

1. Whether the serial number–key code correlations were protectable trade secrets against a publisher who obtained the information through voluntary disclosures by independent locksmiths.
2. Whether compiling and publishing correlations derived from locksmiths’ lawful decoding of locks constituted acquisition by “improper means” or use in breach of a duty of confidentiality.
3. Whether trade secret law can bar aggregation and publication of information lawfully generated through independent discovery analogous to reverse engineering.

## Decision

- The Ninth Circuit reversed the judgment for Chicago Lock.
- The court held the Fanbergs did not acquire the information by improper means.
- Locksmiths who decoded locks and recorded codes owed no duty of confidentiality to Chicago Lock and could share their independently derived information.
- The case was remanded with instructions consistent with entering judgment for the Fanbergs on the trade secret/unfair competition claim.

## Legal Principles

- Trade secret misappropriation generally requires acquisition by improper means (e.g., theft, breach of confidence, or inducement of a breach) or use/disclosure in violation of an obligation of secrecy.
- Trade secret law does not prevent discovery by fair and honest means, including independent discovery and reverse engineering or lawful observation of a product.
- A manufacturer’s internal secret records may be protected, but trade secret law does not grant control over information that third parties can lawfully generate through their own skill and effort and disclose without breaching a duty.

## Conclusion

Because the lock-code correlations in the manual were obtained from locksmiths’ lawful, independent decoding efforts and no confidentiality duty was breached or induced, the publication and sale of the compilation did not constitute trade secret misappropriation, and judgment was required for the defendants.


Chicago Lock Co. v. Fanberg, 676 F.2d 400 (9th Cir. 1982)