Opinion ID: 381274
Heading Depth: 1
Heading Rank: 9

Heading: whether the case must be remanded on the issue of

Text: 55 COMPLIANCE WITH THE KNOW-HOW PROVISIONS. 56 To say that the transfer of know-how under a license does not purge patent misuse is not to say that royalties for know-how are not enforceable where the know-how is licensed in the same agreement as a misused patent. As the District Court correctly stated, (t)he 'know-how' component of the parties' licensing agreement survives the determination that the underlying patent is invalid, and is segregable from the royalty component thereof. The District Court went on to deny plaintiff's counterclaim for delivery of the know-how on the grounds that plaintiff had failed to show that it had paid for that know-how. In briefing for this appeal, plaintiff claims to have satisfied the condition precedent to know-how delivery through payment of the first royalty of $12,000 and defendant claims to have delivered the know-how. Plaintiff further asserts that trial on its counterclaim was deferred until after trial on the patent validity and enforceability issues. Defendant contends that one-half royalties were due on the know-how alone, citing Amendment II of the license agreement. Joint Appendix, page 355. 57 The record before us is insufficient to allow a final determination as to the parties' compliance with the know-how provisions of the license. It may be that the issue was properly before the District Court and that the court was correct in rejecting plaintiff's counterclaim for failure of proof of plaintiff's own performance. Since the record is too sparse on this matter, we vacate the District Court's denial of plaintiff's counterclaim and remand for further proceedings on the issue of compliance with the know-how provisions and the right, if any, of defendant to compensation for know-how. 58 The decision below is affirmed with the exception noted and the cause is remanded for further proceedings in accordance with this opinion. 59