Hyde Corporation v. Huffines

303 S.W.2d 865, 114 U.S.P.Q. (BNA) 562, 1957 Tex. App. LEXIS 1907
CourtCourt of Appeals of Texas
DecidedMay 31, 1957
Docket15813
StatusPublished
Cited by7 cases

This text of 303 S.W.2d 865 (Hyde Corporation v. Huffines) 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
Hyde Corporation v. Huffines, 303 S.W.2d 865, 114 U.S.P.Q. (BNA) 562, 1957 Tex. App. LEXIS 1907 (Tex. Ct. App. 1957).

Opinions

BOYD, Justice.

Appellant Hyde Corporation appeals from a judgment for appellee James Donle Huffines for $17,520 for royalties on the sale of refuse compressor mechanisms, for $3,000 for attorney’s fees, and for a permanent injunction restraining appellant from manufacturing or selling any device made substantially in accordance with any feature of a refuse compressor mechanism as described in an original patent application made by appellee, and in a patent.

Appellee alleged that he was the designer and inventor of a refuse compressor mechanism, which was a valuable device for vehicles used in the collection of trash and garbage; that on December 24, 1953, he filed an application in the United States Patent Office for letters patent on such device, and that patent was pending on said invention; that he was the sole owner of the invention, and the patent to issue on same, together with the plans, specifications, drawings, blueprints, and engineering data necessary to manufacture such device.

Appellee further alleged that appellant requested him to enter into a license agreement whereby appellant would have an exclusive license to manufacture and sell said device; that such license agreement was made and that appellee furnished appellant with the plans, specifications, engineering data, and technical assistance necessary to manufacture the same; that it was agreed that appellant would pay ap-pellee a royalty of $120 per unit, and not less than $12,000 per year; that said agreement became effective April 8, 1954, and that appellant manufactured and sold the units until about May 31, 1955, when it notified appellee that it was canceling the contract.

Appellee further alleged that after the attempted cancellation of the license agreement by appellant, appellant continued to manufacture and sell said device and refused and still refuses to recognize the rights and ownership of appellee; that since May 3 b, 1955, appellant has -manufactured and sold at least twenty-five of the units, and threatens to continue to manufacture and sell them without paying the royalty stipulated by the license agreement. He prayed for a judgment for the alleged royalties and for a permanent injunction restraining appellee from manufacturing and selling the device.

Appellant denied that appellee designed or invented any new or useful improvement in refuse compressor mechanisms, and that the principles and mechanics embodied in the mechanism which appellee alleged he invented were first conceived and designed by others, who, long prior to appellee’s application for patent, had obtained patents on all the features which appellee claims he invented. Appellant further alleged that it was fraudulently induced to enter into the license agreement because it relied upon appellee’s representations that he was the inventor of the mechanisms which appellant proposed to manufacture, and in truth and in fact appellee was not such inventor. It denied that it was manufacturing the device claimed to have been invented by appellee, but that appellant had purchased the patent rights of another inventor, which patent rights had been granted long prior to appellee’s application for a patent, and that the device which appellant is now manufacturing is made in accordance with the features patented to said other inventor and that appellant is not using the features claimed to have been invented by appellee.

The jury found that: appellee disclosed his mechanism to appellant because appellant represented to him that it was interested in manufacturing and selling the device; appellant acted in good faith in acquiring knowledge of the device and [867]*867features of the device in question; the mechanism embodied new and novel features of invention which had not theretofore been applied; the device now being manufactured by appellant is substantially in accordance with, or the equivalent of, the mechanism described in appellee’s original patent application, and in appellee’s patent issued on June 12, 1956; appellee prosecuted his application for patent with due diligence; the mechanism described in appellee’s application for patent was not faulty or worthless for the use for which it was intended; it was the intention of the parties that $12,000 would be the minimum royalty per year; the representations made by appellee and his agent, prior to the execution of the license agreement, that ap-pellee was the sole inventor and designer of the mechanism were true; neither appellee nor his agent, prior to the execution of the agreement, warranted that a patent would forthwith issue on the mechanism; $120 per unit was a reasonable royalty; a reasonable fee for appellee’s attorney would be $3,000.

Appellant seeks a reversal on sixty-five points, most of which are grouped. Primarily, the points involve the action of the court in restraining appellant from manufacturing or selling any device embodying any feature substantially in accordance with, or equivalent to, any feature of the mechanism described in appellee’s original patent application as well as those described in the patent which was issued; in granting judgment for royalties on units manufactured and sold by appellant after the attempted cancellation of the license agreement; the alleged failure of the court to properly charge the jury; the failure to enter the proper judgment on the verdict ; and in allowing attorney’s fees.

We have carefully considered all the evidence and think it is sufficient to support the findings of the jury, with the exception of the matter of attorney’s fees.

The following was shown without dispute : appellee built a refuse compressor mechanism to be used primarily in the collection of trash and garbage; he applied for a patent on the device; appellant learned of the existence of the device, and its vice-president Maxson went from its office in Fort Worth to Wichita Falls for the purpose of examining the mechanism with the view of obtaining for appellant a license agreement for manufacturing the device; appellee explained to Maxson the features of his mechanism and displayed the device mounted on a truck, and demonstrated its operation; Maxson made four or five trips to Wichita Falls to discuss with appellee the matter of a contract; appellant’s chief engineer went to Wichita Falls and made sketches, measurements, and a detailed examination of the mechanism; an exclusive license agreement was prepared by appellee’s attorney and was brought by Maxson to Fort Worth for consideration by appellant; it was redrafted by appellant’s attorney and executed by appellant and appellee on January 8, 1954, to become effective on April 8, 1954.

The agreement provided that: appellant would manufacture and sell the units and pay appellee a royalty of $120 per unit, with a minimum royalty of $12,000 per year; the agreement might be automatically renewed at the end of the first year, so long as its conditions were being fulfilled, and such renewal provision applied to each succeeding year during the pendency of the patent application and during the life of any patent that might issue therefrom ; failure to perform the conditions of the agreement after thirty days notice to the defaulting party would cause the same to become null and void; sixty days notice to terminate the contract should be given by appellant; appellee at his own expense was to prosecute his patent application with due diligence, and was to protect improvements that might be made on the mechanism; appellee would retain any trademark as his own property, appellant having the use thereof during the life of the contract; and appellant agreed not to question the validity of any application for

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Hyde Corporation v. Huffines
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Hyde Corporation v. Huffines
303 S.W.2d 865 (Court of Appeals of Texas, 1957)

Cite This Page — Counsel Stack

Bluebook (online)
303 S.W.2d 865, 114 U.S.P.Q. (BNA) 562, 1957 Tex. App. LEXIS 1907, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hyde-corporation-v-huffines-texapp-1957.