Edison General Electric Co. v. Thackara Manufacturing Co.

Citations

• 167 Pa. 530
• 31 A. 856
• 1895 Pa. LEXIS 944

Syllabus

<p>Patents — License—Failure of consideration.</p> <p>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.</p> <p>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.</p> <p>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.</p> <p>Procedure — Act of May 25,1887, P. L. 271.</p> <p>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.</p>