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VRT, Inc. v. Dutton-Lainson Company

Nebraska Supreme Court
530 N.W.2d 619 (1995)


Sanitas, Inc., the former name of VRT, Inc. (plaintiff), was formed to create and distribute products based on an invention to lift and move medical patients. Sanitas retained an attorney to file a patent application and then entered into a contract with Dutton-Lainson Company (defendant) to produce and sell the products. On the assurance that the patent application had been filed and that a patent would likely issue, Dutton-Lainson agreed to pay Sanitas royalties in exchange for an assignment of Sanitas’s interest in the invention, including the patent application and the Sanitas name and trademarks. Dutton-Lainson began production but no patent was ever issued because, as it turned out, the application had never been filed and the lapse of time prior to discovery of the error prevented issuance of the patent. VRT filed a lawsuit against its attorney for malpractice, which was settled, and against Dutton-Lainson for breach of contract in failing to pay royalties. The district court ruled in favor of VRT, and Dutton-Lainson appealed.

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