Cummings v Stewaet

JurisdictionIreland
JudgeM. R.
Judgment Date16 February 1911
CourtChancery Division (Ireland)
Date16 February 1911
Cummings
and
Stewart.

M. R.

CASES

DETERMINED BY

THE CHANCERY DIVISION

OF

THE HIGH COURT OF JUSTICE IN IRELAND,

AND BY

THE IRISH LAND COMMISSION,

AND ON APPEAL THEREFROM IN

THE COURT OF APPEAL.

1911.

Patent — Licence — Royalties — Transfer — “Two-member” Company.

A clause in a licence agreement for the use of certain patents provided that “the said licensee may … transfer the said licence to any limited liability company he may form to carry on his business, or the business connected with and arising out of said patents and this licence.”

Held, that the licensee could not under this clause rid himself of liability for royalties due under the licence agreement, by transferring the licence to a company formed, not for the purpose of carrying on his business, or of working the patents, but merely with a view to ridding him of such liability.

Trial of Action.

The plaintiff, who was the inventor of a novel system of reinforced concrete construction, and the owner of patents covering his invention, entered into a licence agreement with the defendants for the use of his patents. the licence agreement, dated 3rd April, 1907, recited that the licensor was an expert engineer in reinforced concrete construction, and the inventor and owner of improvements in metal for reinforced concrete construction, known as the Cummings system and protected by European letters patent; and that the licensee was desirous of using the improvements, devices, appliances, and processes covered by said letters patent and applications aforesaid in and for the construction of reinforced concrete structures, with the intent of introducing,

exploiting, and using the Cummings system of reinforced concrete construction within the United Kingdom of Great Britain and Ireland, and France, and Austria, and other European countries.

By the first paragraph of the licence agreement, the licensor granted to the licensee the right, licence, and privilege of using the patents in the above-mentioned countries, said right, licence, and privilege to continue for the full term of the several patents, unless revoked as therein provided for.

By the second paragraph, the said licensee agreed to pay to the said licensor a royalty of 21/2 per cent. on the total or gross amount included in every contract for work actually executed on the Cummings system, including additional sums for extra work (as therein), the royalty so to be paid by said licensee to said licensor not to be less than five thousand dollars in any one year during the continuance of this licence agreement, except that during the first three years the amount must not aggregate less than five thousand dollars, of which one thousand dollars must be paid within the first year, and one thousand five hundred dollars within the second year, and two thousand five hundred dollars within the third year.

Paragraph three was as follows:—“The said licensee agrees to put forth his best efforts to complete the structures contracted for within the time contracted for; and, where no time is specified, then as rapidly as possible; and agrees to carry out every such contract in strict accordance with the working plans and specification in the best manner, and with the best material and by skilled workmen, and will do all in his power to so carry out the contracts as to prevent injury to the reputation of the Cummings system of reinforced concrete construction, and to maintain the present high reputation of the...

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3 cases
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