CAMCO INTERN. INC. v. Perry R. Bass, Inc.

926 S.W.2d 632, 1996 WL 401581
CourtCourt of Appeals of Texas
DecidedAugust 29, 1996
Docket2-95-255-CV
StatusPublished

This text of 926 S.W.2d 632 (CAMCO INTERN. INC. v. Perry R. Bass, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CAMCO INTERN. INC. v. Perry R. Bass, Inc., 926 S.W.2d 632, 1996 WL 401581 (Tex. Ct. App. 1996).

Opinion

926 S.W.2d 632 (1996)

CAMCO INTERNATIONAL, INC. and Camco, Inc., Appellants,
v.
PERRY R. BASS, INC. and Sid W. Richardson Foundation, Appellees.

No. 2-95-255-CV.

Court of Appeals of Texas, Fort Worth.

July 18, 1996.
Rehearing Overruled August 29, 1996.

*633 John F. Lynch, Kenneth D. Goodman, Arnold, White & Durkee, Houston, Estil Vance, Jr., Cantey & Hanger, Fort Worth, for Appellants.

William D. Harris, Jr., Harris, Tucker & Hardin, P.C., Dallas, Wesley N. Harris, Tomi Kay Mills, Kelly, Hart & Hallman, P.C., Fort Worth, for Appellees.

Before CAYCE, C.J., and LIVINGSTON and BRIGHAM, JJ.

OPINION

BRIGHAM, Justice.

Appellants Camco International, Inc. and Camco, Inc. (collectively "Camco") appeal a summary judgment granted for Perry R. Bass, Inc. and the Sid W. Richardson Foundation (hereinafter "Bass-Richardson") in a dispute over whether certain royalty payments were due under United Kingdom patent law. At issue is whether the transfer of rights under the patent from Bass-Richardson to Camco was a license or an assignment. Because we conclude the trial court correctly *634 interpreted the transfer as an assignment, we affirm the judgment.

BACKGROUND

In the 1950s, Sid Richardson funded development and patenting of Harold McGowen, Jr.'s work on an oil production device called the "side-pocket mandrel." McGowen initially worked for Richardson and later became Chief Engineer and President of Camco. Under a 1959 contract, Camco agreed to pay Bass and Richardson royalties for sales of the mandrels. The 1959 agreement also required Camco to assign patents obtained on additional inventions in the same technological area to Bass and Richardson under a socalled "grant-back" clause.

During the 1970s, grant-back clauses became illegal, and Richardson decided to enter into a new agreement with Camco to delete the grant-back clause. In 1974, Bass-Richardson signed a contract with Camco which covered patents from several different countries, including the United Kingdom. The 1974 contract stated that it was intended to supersede all prior agreements and recited that Camco "sells, assigns and transfers to [Bass] an undivided 5/18ths, and [to the foundation], an undivided 13/18ths, of all right, title, and interest, ..." The 1974 agreement then stated that Bass-Richardson:

[G]rant and convey unto [Camco] the exclusive right and license throughout the world to make, charge for the use of, sell, rent and install equipment and the methods of use under the ... patents described above in this paragraph for the respective life or lives thereof, and to grant sublicenses to others....

At the time the 1974 agreement was executed, the life of a British patent was sixteen years. As a result, Camco was obligated to pay royalties on products made or sold in the UK until the sixteen-year anniversary date of each licensed UK patent. Upon the expiration of the UK patents, Camco would no longer have to pay royalties to Bass-Richardson.

In 1977, the UK amended its patent laws, extending the terms of some patents from sixteen years to twenty. After learning of the amendment, Camco continued to pay royalties under the UK patents after the sixteen-year anniversary. In 1991, Camco learned that the amended UK patent law exempted certain licensees from the four-year extension and concluded that because the contract with Bass-Richardson predated the UK amendment, Camco had overpaid royalties. Camco told Bass-Richardson that they would temporarily stop paying royalties on other sales to offset the UK overpayments. Camco estimated the cost of the UK overpayment at $709,339.54. Bass-Richardson replied that Camco were in default under the agreement and subsequently filed suit. Bass-Richardson contend that they are owed $211,132.57 on the UK patents from the 1991 date when Camco stopped paying through the twenty-year anniversary of the patents and the $709,339.54 that Camco offset from other royalties due.

Camco filed a motion for partial summary judgment, asserting that because they were a licensee, they were exempted from the four-year extension on UK patents. Bass-Richardson then filed a motion for summary judgment claiming that the transfer of rights from them to Camco constituted an assignment and that as assignees, Camco were obligated to pay royalties for the additional four years. Both sides agree that summary judgment is appropriate in this case. The trial court granted summary judgment for Bass-Richardson. Although the summary judgment order did not specify the grounds on which it was granted, in a letter to counsel, the trial court stated that the transfer constituted an assignment, instead of a license, because every substantial right had been transferred.

POINTS OF ERROR ONE THROUGH FOUR

Camco contend that the trial court erred in granting summary judgment for Bass-Richardson and in denying summary judgment for Camco because the transfer of rights under the patent was a license and not an assignment.

Camco states that they assigned all of their interests in the existing patents to Bass-Richardson in the 1974 agreement and *635 that Bass-Richardson then licensed back the patents to Camco. Camco note that the 1974 agreement uses the phrase license in describing the transfer from Bass-Richardson to Camco. Camco concede that although whether an agreement "is an assignment or a license does not depend upon the name by which it calls itself, but upon the legal effect of its provisions," citing Waterman v. Mackenzie, 138 U.S. 252, 256, 11 S.Ct. 334, 335, 34 L.Ed. 923, 925-26 (1891) but maintain that "the language used by the parties clearly manifests their intentions." Camco also state that when they sublicensed patents to other companies, the sublicense agreements recited that the patents were "owned by Bass and Richardson and licensed by Camco." Camco assert that the first time Bass-Richardson used the term assignment in any of their pleadings was after Camco moved for summary judgment. Camco conclude that because the 1974 agreement assigned the patents to Bass-Richardson, it would make no sense for Bass-Richardson to assign the same rights back to Camco.

Camco also argue that Bass-Richardson retain substantial rights of ownership, including enforcement and exploitation of the patents. Camco point out that the 1974 agreement gave Bass-Richardson "the right, but not the duty, to select counsel (in its own behalf) and to participate in said suit. Bass-Richardson shall also have the right to bring suit to enforce the licensed patents, and in such case, Camco agrees to cooperate as required in prosecuting any such lawfully instituted suit." Camco contend that Bass-Richardson's retention of the right to bring infringement suits independently of Camco, and to join any action Camco initiate, shows that Bass-Richardson still own the patents and that Camco are only licensees. Camco note that Bass-Richardson retained the right to exploit the patents, to veto settlement of infringement suits, and to approve assignments of Camco's interest under the agreement.

The Standard of Review

In a summary judgment case, the issue on appeal is whether the movant met his summary judgment burden by establishing that no genuine issue of material fact exists and that movant is entitled to judgment as a matter of law. See Tex.R. Civ. P. 166a(c); Cate v. Dover Corp., 790 S.W.2d 559, 562 (Tex.1990);

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926 S.W.2d 632, 1996 WL 401581, Counsel Stack Legal Research, https://law.counselstack.com/opinion/camco-intern-inc-v-perry-r-bass-inc-texapp-1996.