## Facts

- Valco Cincinnati, Inc. manufactured specialized glue-dispensing equipment and related components used in industrial box-making.
- Over time, Valco developed technical information (including materials, processes, dimensions, and tolerances) it treated as confidential, along with business information such as customer and pricing lists.
- James E. Draginoff worked for Valco (starting as a machinist and later as production manager) and acquired detailed knowledge of Valco’s products through that employment.
- While still employed, Draginoff and his brothers formed N & D Machining Service, Inc., a machine shop that supplied parts to Valco.
- Valco loaned N & D a special tool and provided detailed drawings, sketches, and specifications to enable N & D to manufacture parts for Valco.
- After Draginoff resigned, Valco learned N & D was using Valco-provided information to manufacture interchangeable parts not only for Valco but also for at least one competitor.

## Issues

1. Whether sufficient evidence supported the trial court’s findings that Valco’s technical and business information constituted protectable trade secrets under Ohio law.
2. Whether the trial court abused its discretion by issuing an injunction that effectively permanently barred defendants from using Valco’s misappropriated information to manufacture interchangeable parts.

## Decision

- The Supreme Court of Ohio affirmed the judgments below.
- The Court held the evidence supported classifying Valco’s designs, processes, and related business information as trade secrets.
- The Court held the trial court did not abuse its discretion by granting an effectively permanent injunction, given the severity of the misconduct and the relationship between the parties.
- The Court stated that, as a general rule, trade-secret injunctions ordinarily should end when the information becomes lawfully available to competitors (including through reverse engineering), subject to any additional restraint needed to eliminate any “lead time” advantage.
- The Court recognized an exception permitting permanent injunctive relief when misappropriation is especially egregious.

## Legal Principles

- Technical information and business information may qualify as trade secrets when not generally known and when reasonable measures are taken to maintain secrecy.
- A confidential relationship supporting trade-secret protection may arise from employment and from a supplier relationship where the recipient receives confidential drawings, tools, or specifications for a limited purpose.
- Injunctive relief in trade-secret cases should generally terminate once the information becomes lawfully available to good-faith competitors (including via reverse engineering), with a possible additional period to negate any improper head start.
- A permanent injunction may be warranted when misappropriation is sufficiently egregious and constitutes a serious violation of the parties’ relationship, and the trial court acts within equitable discretion in imposing that remedy.

## Conclusion

The court upheld findings that Valco’s technical and business information were trade secrets and affirmed an effectively permanent injunction, explaining that while most trade-secret injunctions should end when lawful access becomes possible (with added time for any head-start advantage), permanent relief is permissible where misappropriation is exceptionally serious.


Valco Cincinnati, Inc. v. N & D Machining Serv., Inc., 24 Ohio St. 3d 41 (Ohio 1986)