the grant of the license in order to make them marketable. He further testified that there was no need for additional developmental know-how once the patented compositions had been established, which occurred before June 1960. The patents themselves adequately taught the preparation and use of the licensed products.[1]
Even if the rights to plaintiffs’ services acquired by Denver in the 1959 agreement were deemed to subsist beyond the inception of the 1960 license, those rights were merely incidental to Denver’s right to use the patented compositions and do not save plaintiffs’ royalty arrangement from the defense of patent misuse by reason of extending payments for a monopoly beyond the life of the patent. See Rocform Corp. v. Acitelli-Standard Concrete Wall, Inc., 237 F.Supp. 34, 143 USPQ 405 (E.D. Mich. 1964), aff’d, 367 F.2d 678, 151 USPQ 305 (6th Cir. 1966). As indicated by the testimony of Dr. Ochs, the services which plaintiffs were obliged to furnish under the 1959 agreement were minimal. They related to merchandising the products and were essentially those which any licensor interested in the net sales would undertake in self interest.
Moreover, plaintiffs failed to establish what part, if any, of the percentage royalty was allegedly intended to be compensation for consideration other than the patent license. The 1962 modification eliminated any notion of divisibility of the royalties upon expiration of the patents. The evidence does not establish any intent of the parties to apportion the royalties between the license and the other rights allegedly acquired by Denver.
The 1960 agreement contemplated that all its parts and the consideration therefor should be interdependent. This is not a case where the performance of each party under the agreement was divided into two or more parts; the number of parts due from each party was the same; and the performance of each part by one party was the agreed exchange for the performance of a corresponding part by the other party. Consequently, the agreement is not severable (First Savings & Loan Association v. American Home Assurance Co., 29 N.Y.2d 297 (1971)) and the post-expiration royalty provisions are unenforceable.
Accordingly, plaintiffs are not entitled to any recovery on their complaint, and the action is dismissed as to all named defendants herein.
The foregoing establishes that Denver’s counterclaim for a declaratory judgment is redundant and has become moot, and it is accordingly dismissed. See 6 Wright and Miller, Federal Practice and Procedure §1406 (1971), cited with approval in Aldens, Inc. v. Packel, 524 F.2d 38, 51–52 (3d Cir. 1975), cert. denied, 44 U.S.L.W. 3593 (April 19, 1976).
The foregoing shall constitute the findings of fact and conclusions of law required by Fed. R. Civ. P. 52(a).
District Court, C.D. California
The Urantia Foundation
v. King, et al.
No. CV 74-2837 Decided Mar. 21, 1977
- ↑ It should also be noted that plaintiff Ochs testified that plaintiff Veltman held some 100 patents, yet the evidence was that he had not offered Denver an opportunity to evaluate or secure a license to market those products. Apparently Veltman did not consider himself bound by the language of the 1959 agreement to give Denver any such first refusal rights for the ensuing 25 years.
