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TOMS v. BEV-MAID (03/22/66)

decided: March 22, 1966.

TOMS, APPELLANT,
v.
BEV-MAID, INC.



Appeal from judgment of Court of Common Pleas of Chester County, Oct. T., 1964, No. 20, in case of Clinton Lee Toms v. Bev-Maid, Inc.

COUNSEL

John S. Estey, with him Bruce B. Wilson, Joseph F. Harvey, and Montgomery, McCracken, Walker & Rhoads, for appellant.

William H. Rivoir, Jr., with him Gawthrop and Greenwood, for appellee.

Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice O'Brien.

Author: O'brien

[ 420 Pa. Page 563]

Appellant, Clinton Lee Toms, entered into an agreement with Providence Enterprises, Inc., predecessor of appellee, Bev-Maid, Inc., whereby appellee was granted the sole and exclusive right and license to manufacture and supply products utilizing certain inventions of appellant. For this license, appellee agreed to pay certain royalties.

The license agreement in its introductory paragraphs states:

"Whereas, Toms has or will in the near future applied [sic] for patents in the United States, Great Britain, Canada and Western Germany for a process of

[ 420 Pa. Page 564]

    packaging dry food concentrates and has also applied for patents in the aforesaid countries for a sealing mechanism, and

"Whereas, Providence is desirous of processing cups utilizing the said patents and marketing vending machines utilizing the features of the said patents,". Following these introductory paragraphs are the specific terms of the license agreement, including: " 10. If any of the said patent applications shall be denied or, if granted, shall in any action for infringement or otherwise be declared by any court of competent jurisdiction to be invalid on any ground whatsoever, all royalties payable hereunder shall forthwith cease to be payable; but if the decision of such court shall be reversed on appeal, the said royalties shall forthwith again become payable, together with all royalties which would have been payable but for the adverse decision."

The license agreement was executed on August 1, 1961, and royalties were paid under this agreement to appellant until April of 1964, when appellee notified appellant that it would pay him no further royalties under the contract. Appellant commenced an action of assumpsit, seeking damages for a breach of agreement.

Appellee filed an answer to the complaint in assumpsit in which it averred that no royalty payments were due and owing to appellant for its use of his inventions for any period after the rejection by the United States Patent Office on February 12, 1963, of an application for patent filed by appellant at No. 154,487. In addition, appellee filed a counterclaim, seeking the return of all royalties paid or credited to appellant between the date of ...


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