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

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: December 28, 1943
• Status: Published

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.