Commonwealth vs. Charles Engleman & others
336 Mass. 66, 142 N.E.2d 406 (1957)
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Rule of Law:
Under a larceny statute defining property as tangible items, an intangible trade secret is not property that can be the subject of theft. Therefore, a conspiracy to misappropriate an intangible trade secret does not constitute a criminal conspiracy to steal.
Facts:
- Progressive Machinery, Incorporated (the corporation) developed and owned an unpatented, special 'hinge tool,' the manufacturing methods for which were kept as trade secrets.
- Ernest and Louis Des Vergnes were former employees of the corporation who had signed agreements prohibiting them from disclosing or using these trade secrets.
- Charles Engleman, in response to his own advertisement for 'hinge tool makers,' met with the Des Vergnes brothers.
- Engleman offered the Des Vergnes brothers 'good money' to make a tool similar to the one used by the corporation, telling them not to worry about their non-disclosure agreements.
- Engleman then met with Daniel Collins, a draftsman for the corporation, and offered him money to secure copies of the drawings and blueprints for the hinge tool.
- Engleman proposed a scheme where Collins would remain employed by the corporation for three months while secretly on Engleman's payroll to supply the blueprints.
- Engleman also offered to pay another employee, Desrosier, to take blueprints of the hinge tool from the corporation and make them available to him.
- Engleman was arrested immediately following his conversation with Desrosier.
Procedural Posture:
- Charles Engleman, Louis Des Vergnes, and Ernest Des Vergnes were charged by indictment in a trial court with conspiracy to steal trade secrets, confidential methods, and tools.
- The case proceeded to a trial.
- At the conclusion of the evidence, each defendant made a motion for a directed verdict of 'Not Guilty.'
- The trial court denied the defendants' motions.
- The defendants were found guilty.
- The defendants appealed the denial of their motions to the reviewing court, bringing the case before this court on their exceptions.
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Issue:
Does a conspiracy to acquire and use a company's intangible trade secrets constitute a criminal conspiracy to "steal" property under a statute that defines larcenable property as tangible items?
Opinions:
Majority - Williams, J.
No, a conspiracy to acquire and use a company's intangible trade secrets does not constitute a criminal conspiracy to 'steal' property under the applicable statute. The court's reasoning is that the term 'steal' has become a term of art referring to the criminal taking of personal property. The larceny statute in question, G. L. c. 266, § 30 (2), lists items that can be the subject of larceny, all of which are tangible writings like deeds, contracts, and writs. The Commonwealth argued that the statutory term 'process' was broad enough to include trade secrets, but the court rejected this, holding that 'process' must be interpreted in its context to mean a legal paper issued by a court. Because intangible trade secrets are not listed in the statute as property subject to larceny, a conspiracy to steal them does not constitute a criminal offense. The court also found no evidence that the defendants conspired to steal the physical tools themselves, as the Des Vergnes brothers' agreement was limited to using their knowledge to manufacture a new tool, not to participate in a physical theft.
Analysis:
This decision highlights a historical gap in criminal law, where traditional larceny statutes designed for tangible property were insufficient to prosecute the theft of intangible intellectual property. The ruling established that without specific statutory language, misappropriating a secret process or method could not be charged as 'stealing' in the criminal sense. This case likely influenced legislatures to amend criminal codes to explicitly include trade secrets and other forms of intangible property, creating specific crimes for their theft. It forced prosecutors to distinguish between misappropriating knowledge and the physical theft of items embodying that knowledge, requiring more precise charging decisions.
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