Edison General Electric Co. v. Thackara Manufacturing Co.
Edison General Electric Co. v. Thackara Manufacturing Co.
Opinion of the Court
Opinion by
The plaintiffs’ case comes before us in an exceedingly un
This judgment must be reversed for the variance between the averment and the assessment of damages. The statement sets out that there is due under the agreement sued on “ three per centum of the net wholesale selling price of the fixtures, etc., manufactured and sold' by defendants,” etc., and that plaintiffs are “ unable to state the exact amount of royalties due .... but believe that the net wholesale selling price . . . . of the devices covered by the patents made and sold during each of these seven periods, amounts to $4,000 and upwards, and plaintiffs therefore claim to recover on this account the sum of $571.43 with interest “ from each of the seven quarterly periods named.” The amount claimed is certainly not three per cent of the alleged selling price, but more than four times that much, and the principle upon which such result was reached nowhere appears. But plaintiffs upon the rule being made absolute for judgment, abandoning as already said the first three items of their claim, assessed the damages on the other four at the full sums claimed with interest. There is nothing on the record to sustain such an assessment.
Subsequent cases have not disturbed these well settled principles. In Hardwick v. Galbraith, 147 Pa. 333, it was held that a license does not of itself import a monopoly, but in the present case it is expressly set up in the affidavit that there was to be a monopoly among the members of the association, all of whom paid royalty. In Jarecki Co. v. Hays, 161 Pa. 613, the pith of the decision, p. 617, is that a licensee receiving the benefits must pay the fees without regard to the validity of the patent; and in Hardwick v. Galbraith, supra, and Patterson’s Appeal, 99 Pa. 521, it was held that the licensees could not set up the invalidity of the patent as a defense because they had agreed that the test on that point should be an adverse decision by a court of competent jurisdiction. All these cases are in entire harmony with Angier v. Eaton Co., supra.
The defendant was entitled to go to a jury on the defense set up in his affidavit.
Judgment reversed and procedendo awarded.
Reference
- Full Case Name
- Edison General Electric Company and George Maitland v. Thackara Manufacturing Company
- Cited By
- 10 cases
- Status
- Published
- Syllabus
- Patents — License—Failure of consideration. Where a patent is apparently valid, and the licensee is enjoying the benefit of its supposed validity, he is bound to pay the stipulated royalty, and cannot set up as a defense the actual invalidity of the patent; but when, in addition to the invalidity of the patent by reason of a prior outstanding patent, it is shown that the owner of the prior patent is asserting his exclusive rights thereunder by supplying the market with the patented article, and the licensee under the invalid patent is deprived of the monopoly for which he contracted, and in consideration of which he agreed to pay the royalty, he may defend on the‘ground of actual failure of consideration. Where the monopoly is not exclusive in the licensee, but is to be enjoyed with others, who also pay royalty, the difference is one of degree only, not of principle. In an action to recover royalties under a license, where the license agreement provides that the royalty shall be three per cent of the selling price of the article, and the plaintiff is permitted to enter judgment for a. sum four times in excess of the amount stipulated in the agreement, there being nothing on the record to explain how the amount was reached, the judgment will be reversed by the Supreme Court. Procedure — Act of May 25,1887, P. L. 271. The procedure act of May 25, 1887, P. L. 271, substituted “ a concise statement of- the plaintiff’s demand ” for a common law declaration, and where the rule of the court requires the statement to be sworn to and, where damages are capable of liquidation, to contain “an explicit averment of the amount claimed to be justly due,” these matters cease to be merely formal and become substantial with a resulting necessity to follow the truth of the actual facts.