Permanence Corporation v. Kennametal, Inc.
United States Court of Appeals for the Sixth Circuit
908 F.2d 98 (1990)
- Written by Tammy Boggs, JD
Facts
Permanence Corporation (Permanence) (plaintiff) owned a patented process to form an alloy by incorporating tungsten carbide into a steel matrix. In 1979, Permanence entered into a license agreement with Kennametal, Inc. (defendant). Kennametal specialized in manufacturing tools. Permanence granted Kennametal a nonexclusive right to practice Permanence’s patent right for a fee of $150,000, advance royalties of $100,000, and ongoing royalties based on product sales. The agreement also gave Kennametal the option to obtain an exclusive license subject to a nonexclusive license that had been granted to a third party for another $150,000 fee, a second $100,000 in advance royalties, and ongoing royalties. The parties signed the agreement, and later, Kennametal exercised its option for an exclusive license. In 1988, Permanence sued Kennametal, alleging breach of contract based on Kennametal’s failure to use best efforts to exploit the patents. The trial court granted summary judgment for Kennametal, reasoning that there was no express or implied best-efforts obligation to exploit the patents. Permanence appealed.
Rule of Law
Issue
Holding and Reasoning (Contie, J.)
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