Opinion ID: 381274
Heading Depth: 1
Heading Rank: 3

Heading: The decision on patent misuse is correct on the merits.

Text: 8 V. The District Court's finding that the delivery of know-how by Chemidus to Robintech could not have purged misuse is affirmed. 9 VI. However, we remand to the District Court on the issue of compliance with the know-how provision (1(b)) of the license agreement for further deliberation in accordance with this opinion. 10 On December 23, 1969, the United States Patent Office issued Patent No. 3,484,900 in the name of David Harold Sands and Ronald Broome as joint inventors. The Sands-Broome patent covers an apparatus and method for forming a circumferential internal groove in a length of piping of tubular thermoplastic material. As we develop fully infra, the resulting pipe and pipe fittings are not themselves covered by the patent. 11 The Sands-Broome patent is assigned to Chemidus and is subject to a license agreement entered into on January 1, 1970, between Chemidus Plastics, Ltd. and Universal Pipe & Plastics, Inc., predecessors in interest of defendant and plaintiff, respectively. In general, the agreement provides that Chemidus shall grant to Universal full but non-exclusive authority to manufacture and market pipe and pipe fittings made by use of Chemidus' patents and related know-how, in return for which Universal agrees to pay fixed sums and royalties to Chemidus and to undertake various other duties in the way of sales promotion, quality control, patent defense and confidential treatment. More specifically, the license agreement provides under clause 1(b) that Chemidus would deliver certain know-how to the licensee: 12 Chemidus shall furnish to the Licensee within thirty days of receipt by Chemidus of the first payment hereinafter provided for all such information and technical knowledge as shall reasonably be necessary and desirable to enable the Licensee to make use of the know-how for the manufacture of the products in the territory. 13 Furthermore, clause 1(d) of the license agreement limits Robintech's ability to export the unpatented products, i. e., pipes and pipe fittings, of the patented method: 14 The Licensee shall be entitled to export the products outside the territory to any part of the world except Great Britain and any country in respect of which Chemidus shall have granted to any other party a license to manufacture the products. Chemidus shall from time to time advise the Licensee in writing of such countries in respect of which licenses and such notification shall be conclusive and binding upon Chemidus and the Licensee. 15 (The term territory is defined in clause 1(a) as being the United States and Puerto Rico). The products are those made with use of the patented invention. 16 During trial, Chemidus filed and served a motion to strike Robintech's claim that clause 1(d) and other clauses of the license agreement constituted patent misuse. Approximately two months following trial, the District Court issued a Memorandum Order on March 22, 1978. The District Court concluded that the export limitation in clause 1(d) of the license agreement constituted patent misuse, barring recovery. This Memorandum Order was incorporated in part into the District Court's full opinion in which it issued its Findings of Fact and Conclusions of Law. Robintech, Inc., supra at 834. 17 A discussion of each issue follows. 18