Opinion ID: 1968591
Heading Depth: 1
Heading Rank: 7

Heading: Value of exclusive license.

Text: Plaintiff adds two other factors of $2,000,000 each. These are derived in this manner: Assume, says plaintiff, that the royalty agreements are valid. Nevertheless, the exclusive license rights of Pressed Metals constitute in equity an assignment of the patents, Matzka Corporation v. Kelly DryPure Juice Corporation, 19 Del.Ch. 359, 168 A. 70, and these patents, says plaintiff, and the bundle of rights they represent, must be deemed an asset of the corporation of substantial value. Plaintiff suggests that these rights, in respect of products in production, should be valued at $2,000,000; and that such rights, in respect of new products, should likewise be valued at $2,000,000. Since under plaintiff's first contention (that Pressed Metals owned the patents outright), the total value of the patents is said to be $500,000, it is impossible to understand how he can even attempt to support a value of $4,000,000 for the patents burdened with royalty payments. But the short answer to his contention is that it simply represents a difference of judgment between him and the directors, who have refused to place any definite value on this intangible asset, and that plaintiff has failed to adduce any evidence whatever to show that the directors' judgment was grossly erroneous. The first figure of $2,000,000 is simply pulled out of the air; the second is derived from an offer of a bank to lend Pressed Metals $2,000,000  obviously no justification for valuing the patents on new inventions at the same figure. The Vice Chancellor was clearly right in refusing to add any plus factor derived from these contentions about the patents.