Henry J. Morgan, James P. Gilliland, Carr & Krauss, Philadelphia, for appellant.
Wallace D. Newcomb, James C. McConnon, Paul & Paul, Philadelphia, for appellee.
Before Rhodes, P. J., and Hirt, Reno, Dithrich, Ross and Gunther JJ.
[ 173 Pa. Super. Page 116]
This is an appeal from the entry of judgment on the pleadings. Appellee brought an action in assumpsit for royalties due and an accounting thereof under a patent licensing agreement. Appellant's answer, raising new matter, was met with preliminary objections in the nature of a demurrer which were sustained by the court below and judgment entered thereon.
The licensing agreement between the parties, entered into on March 15, 1940, provided that appellant was to have an unassignable, non-exclusive license to use certain processes held by appellee under Patent No. 2118468; that appellant should also have similar rights in several processes related to the first patent for which patent applications were then pending*fn1; that the license was to continue for the life of each and every patent; that the consideration for such license was a prescribed rate of royalties, with a minimum of $10 per month.
[ 173 Pa. Super. Page 117]
The agreement provided, inter alia, that appellant would not contest the validity of any of the licensed patents while the agreement was in effect; that the refusal of, or judicial declaration of invalidity of, any of the four pending patent applications would give appellant the right to terminate the agreement; and that appellant had the absolute right to terminate upon three months' written notice that he would not thereafter use any of the patented methods, providing he should have paid all accrued royalties.
The agreement is still in effect, appellant having never given the required notice. Appellant in his answer claims credit for payment of all royalties until some time in 1944, but, by inference, admits no payments thereafter. Appellant by way of new matter averred that original patent under this licensing agreement was held invalid on January 3, 1949 by the Supreme Court of the United States, Jungersen v. Ostby & Barton Co., 335 U.S. 560, 69 S.Ct. 269, 93 L.Ed. 235, on the ground of want of invention, in an infringement suit involving parties other than appellant.
Appellant contends that this decision constitutes an eviction or failure of consideration relieving him of the duty to pay royalties or to account.
There are several difficulties with appellant's position. First, the licensing agreement admittedly covered five patents, only one of which was held invalid. Why the obligations under the four patents should fall with the fifth is neither made clear by appellant nor supported by the pleadings. He alleged merely that the four later patents were only improvements and variations on the first and hence became equally invalid upon the Supreme Court decisions. However, as we shall point out, this allegation ...