Roberts v. Sears, Roebuck and Co.

Peter M. Roberts (plaintiff) was a salesclerk for Sears, Roebuck & Co. (Sears) (defendant) in the 1960s. While working at Sears, Roberts designed and created a wrench with a quick-release feature. Roberts filed for a patent for his invention and showed the wrench to his manager before submitting his suggestion to Sears. Roberts later left his job with Sears. Sears tested the wrench and obtained expert opinions before deciding to incorporate the quick-release feature into almost 75 percent of the wrenches Sears sold. Sears negotiated with Roberts for purchase rights. Sears’s lawyer told Roberts that Sears was seeking only a license and that the invention was worth only $10,000. The agreement provided Roberts with a two-cent royalty per unit up to $10,000 in return for a complete assignment of all of Roberts’s rights, along with contingency provisions. Within nine months, Sears sold over 500,000 wrenches and paid Roberts the maximum royalty, acquiring all of Roberts’s patent rights. Roberts sued Sears seeking either a return of the patent and restitution or damages for fraud, breach of a confidential relationship, and negligent misrepresentation. The jury found Sears liable on all three counts and entered judgment for Roberts for $1 million. Sears filed a post-trial motion for judgment notwithstanding the verdict. Roberts filed a postjudgment motion seeking rescission of the contract and restitution. The district court denied both motions. Roberts appealed seeking equitable relief, and Sears cross-appealed the $1 million judgment.