Unarco Industries, Inc. v. Kelley Co.
United States Court of Appeals for the Seventh Circuit
465 F.2d 1303, 175 U.S.P.Q. 199 (1972)
- Written by Eric Miller, JD
Facts
Garrett Kelley obtained a patent for a piece of equipment called a dockboard, which enabled the movement of merchandise from a truck bed to a loading dock. The dockboard was the principal product sold by Kelley Company, Inc. (defendant). Kelley brought an infringement suit against Unarco Industries, Inc. (Unarco) (plaintiff) for selling dockboards. The suit was settled when the parties agreed that a nonexclusive licensing agreement was preferable to continued litigation. Under the agreement, Unarco was licensed to sell a certain number of dockboards per year without paying a royalty. The agreement did not address the subject of assignability. Later, a company called Overhead Door (plaintiff) sought to enter the dockboard market by acquiring or merging with Kelley. This effort failed. Overhead Door then approached Unarco and entered a contract under which Overhead Door purchased the right to sell dockboards for five years. An attorney for Kelley informed Overhead Door that only Unarco was licensed to sell the dockboards under the agreement. Unarco and Overhead Door then commenced an action in federal district court, seeking a declaratory judgment that the patent license was assignable. The district court, applying state law, found in favor of Unarco and Overhead Door. Kelley appealed to the United States Court of Appeals for the Seventh Circuit.
Rule of Law
Issue
Holding and Reasoning (Duffy, J.)
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