Court Opinion

ID: 8595808
Source: CourtListenerOpinion
Date Created: 2022-11-23 16:02:59.722857+00
Date Added: 2024-06-11T16:54:55.655244
License: Public Domain

BeNNett, Judge,
concurring in part and dissenting in part:
Though I join in most of the court’s opinion, I cannot accept the majority’s reasoning in part II (Eoyalty Compensation) in support of the 2-percent royalty rate. Bather, I basically agree with Judge Kashiwa’s approach to that issue, *223and concur in his result. Like Judge Kashiwa, I find an unexplained, telling inconsistency between the majority’s approval of the 2-percent rate for license compensation from 1946 onward, and its recognition that a $500-per-aircraft figure governed plaintiff’s license agreement with United in 1947 and 1948. Even more undermining of the 2-percent rate is the fact that it was never actually used to measure a fair return to plaintiff on its patents; that rate was neither accepted by any other potential licensees nor allowed to go into effect under the 1947 United license agreement. The 2-percent figure may well have been satisfactory to plaintiff, but then so was the $500-per-craft irate, and so further, as Judge Kashiwa demonstrates, was the return received under the 1949 paid-up license. Accordingly, there is no warrant for the majority’s conclusion that a 2-percent compensation level should apply on the theory that no “lesser royalty was ever satisfactory, acceptable, or offered generally.” Following Judge Kashiwa, I think that the 1949 paid-up license agreement was not so clearly the product of “one-sided litigation pressure,” the assumption used by the majority to brush aside evidence that could lead to a more than tenfold reduction in plaintiff’s recovery. That agreement should be taken into account, in keeping with the economic reality embodied in the “most favored licensee” clause of the typical royalty agreement that plaintiff offered to potential licensees. As Judge Kashiwa explains, “[ajfter United, the leader in the helicopter industry, had received its 1949 paid-up license, no other manufacturer could pay substantially more and expect to compete in either the Government or commercial market place.” Defendant is unquestionably entitled, as a matter of law as well as by analogy to the “most favored licensee” provision, to enjoy a royalty rate no less favorable than any of plaintiff’s licensees. The impact of the paid-up license was carefully and properly considered in the unrebutted testimony of defendant’s expert witness Glassman, reaching a just compensation rate far less than 2 percent and more in line with that stated in Judge Kashiwa’s opinion.