## Facts

- Kubik, Inc., a Michigan manufacturer, designed hydraulically controlled hydrostatic drive units used in transfer and conveyor systems, including the “Kubik Hydradrive,” a modified Vickers hydrostatic transmission with a specially designed hydraulic cylinder, manifold, and control configuration.
- Kubik treated the Hydradrive’s manifold and control design, related engineering data, and pricing information as confidential; the product was sold in limited quantities to sophisticated industrial customers.
- James S. Hull joined Kubik in 1967 as a salesman and later became vice-president; he had hydraulics sales experience but no prior experience with hydrostatic drive units before working at Kubik.
- While still employed, Hull entered an oral agreement (September 1969) with PSI Hydraulics and its president to produce competing hydrostatic drive units; Hull left Kubik on November 22, 1969.
- Evidence showed Hull removed technical drawings and engineering data without authorization, disclosed Kubik’s confidential design information and pricing to PSI, and used that information to compete for and obtain business from a major customer.
- Kubik alleged defendants replicated the Hydradrive by using Kubik’s confidential engineering information rather than independently developing a design.

## Issues

1. Whether the Hydradrive manifold/control design and related engineering and pricing information constituted protectable trade secrets under Michigan law.
2. Whether a permanent injunction barring defendants from manufacturing and selling the hydrostatic drive equipment was an appropriate remedy for misappropriation, or whether relief should be limited to damages and narrower equitable measures.

## Decision

- The court affirmed, in substance, the finding that Kubik’s confidential manifold/control design and related engineering information were trade secrets and that Hull misappropriated them through a breach of a confidential employment relationship.
- The court reversed the trial court’s permanent injunction prohibiting defendants from manufacturing and selling the competing hydrostatic drive equipment as overbroad.
- The court remanded for assessment of damages and for consideration of a more limited equitable remedy, if warranted.

## Legal Principles

- Information qualifies as a trade secret when it is not generally known or readily ascertainable by proper means, has economic value from its secrecy, and is subject to reasonable efforts to maintain confidentiality.
- An employee may not use or disclose confidential information acquired through employment to compete unfairly against the employer, even absent an express noncompete agreement.
- Injunctive relief in trade-secret cases should be protective rather than punitive and should be tailored to prevent unfair advantage from misappropriation.
- When a product embodying the secret is sold in the marketplace and is susceptible to lawful reverse engineering, a perpetual injunction that bars competition may improperly grant a monopoly; damages and time-limited relief aimed at eliminating an unfair head start are generally more appropriate.

## Conclusion

The court treated the Hydradrive’s confidential engineering design information as a protectable trade secret misused through a breach of confidence, but held that a permanent ban on defendants’ manufacture and sale of competing equipment was an improper and overly broad remedy, requiring remand for damages and any narrowly tailored equitable relief.


Kubik, Inc. v. Hull, 56 Mich. App. 335, 224 N.W.2d 80 (Mich. Ct. App. 1974)