Mason v. Electrol, Inc.

267 A.D. 216, 46 N.Y.S.2d 37, 60 U.S.P.Q. (BNA) 213, 1943 N.Y. App. Div. LEXIS 6018

Opinions

Crapser, J.

By the terms of the agreement the parties undertook reciprocal obligations. The contract did not provide a specified period at which the agreement would terminate. It was a license agreement for the use of patents. A license under a patent without expressed limit as to time is a license for the unexpired life of the patent. (Koppe v. Burnstingle, 29 F. 2d 923; Fitch v. Shubert, 20 F. Supp. 314; St. Paul Plow Works v. Starling, 140 U. S. 184.)

The license agreement was to continue as long as the patent structure underlying it. Paragraph “ Seventh ” was intended to work a forfeiture of defendant’s rights to exploit plaintiff’s patents; not to forfeit plaintiff’s right to damages for its breach. The termination was for plaintiff’s benefit, not defendant’s.

The royalty provisions are to be found in paragraph 11 First ’ ’ of the agreement. They granted (1) a minimum annual royalty of $2,400 for the life of the license agreement — which, as we have seen, means the life of the patent structure — and (2) for the calendar year 1940, an “ additional advance royalty ” of $200 per month.

Paragraph “ Sixth ” of the agreement concerned itself with the period prior to the calendar year 1940, whereas paragraph “ Seventh” concerned itself'with the period beginning after the calendar year 1940; furthermore paragraph “ Seventh ” like paragraph “ Sixth ” terminated the license agreement for defendant’s default, for plaintiff’s benefit, and did not rescind it as an award to defendant for a breach of its contract obligation.

The decision of the Special Term is correct and the order appealed from should be affirmed, with costs.