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Jones v. Cooper Indus.

Court of Appeals of Texas, Fourteenth District, Houston

December 12, 1996, rendered ; December 12, 1996, Opinion filed

NO. 14-95-00955-CV

Opinion

 [*120]  OPINION

This appeal involves a claim for breach of a patent agreement which was decided by the trial court on opposing motions for summary judgment. Marvin R. Jones ("Jones"), appellant, appeals the denial of his motion for summary judgment and the granting of summary judgment in favor of Cooper Industries, Inc. ("Cooper"), appellee. We affirm.

Background

This dispute arises out of a Patent Rights Agreement (the "PRA"), effective October 1, 1981, whereby Jones sold and assigned certain patent rights to Koomey Blowout Preventers, Inc. ("Koomey"). In return, Koomey agreed to pay Jones, during each year [**2]  of the term of the agreement, the greater of $ 50,000 annually or 1/2 of 1% of the annual gross revenues as defined in the PRA. The term of the PRA is fifteen years from the date of its execution, or until the last applicable patent expires. According to Jones, at least one of the patents will continue in effect until 2004 or 2005. The PRA provides that it shall be binding upon "Koomey, its subsidiaries, successors, assigns or licensees." Cooper ultimately obtained the patents at issue, but did not expressly assume the obligations created by the PRA and has refused to pay Jones the amounts described therein.

The present case is not the only lawsuit to originate from the disputed ownership of technology between the parties. In 1983, Cameron Iron Works, Inc. (subsequently acquired by and hereinafter referred to as "Cooper") filed suit against Koomey, Jones, and others alleging that Jones, a former employee, 1 disclosed to Koomey its confidential or trade secret information.  [*121]  Cameron Iron Works, Inc. v. Koomey Blowout Preventers, Inc., Cause No. 83- 67214, In the 281st Judicial District Court of Harris County, Texas (hereinafter "the Cameron litigation"). Cooper claimed [**3]  ownership of some of the technology involved in the patent rights subject to the PRA. During the pendency of the Cameron litigation, Koomey pledged the patents at issue to First City National Bank as security for a loan. When Koomey defaulted on the loan, the patents were foreclosed and sold to PB-BOP, Inc. (hereinafter "PB- BOP"), who then intervened in the lawsuit. By Settlement Agreement dated November 26, 1990, Cooper settled the Cameron litigation. Pursuant to the settlement, PB-BOP transferred the patents at issue to Cooper. The settlement also provided that Koomey would indemnify Cooper for any claims brought by Jones based upon the bringing of the suit or its settlement.

Following the settlement of the Cameron litigation, Jones brought suit against KBOP, Koomey, PB-BOP, M.H. Koomey, Inc., and others for unpaid [**4]  royalties in breach of the PRA. Jones v. Koomey Blowout Preventers, Inc., et. al.,  Cause No. 91-029277, In the 190th Judicial District Court of Harris County, Texas (hereinafter "the Koomey litigation"). Although Cooper held title to the patents, it was not made a party to the action. Jones ultimately settled the Koomey litigation for $ 100,000 and released the defendants from any and all liability under the PRA. Although Cooper was expressly excluded from the release, the settlement agreement provided that Cooper was released to the extent that Koomey and the other defendants might have joint and several liability with Cooper for a claim asserted by Jones.

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938 S.W.2d 118 *; 1996 Tex. App. LEXIS 5480 **

MARVIN R. JONES, Appellant v. COOPER INDUSTRIES, INC., Appellee

Subsequent History:  [**1]  Application for Writ of Error Denied July 31, 1997. Motion for Rehearing of Application for Writ of Error Overruled September 11, 1997.

Prior History: On Appeal from the 113th District Court. Harris County, Texas. Trial Court Cause No. 94-44105. Hancock, Hon. Patricia, Judge.

Disposition: Affirmed

CORE TERMS

patents, royalties, obligations, summary judgment, covenants, assigned, assignee, quantum meruit, argues, rights, personal property, royalty interest, mineral, station, no writ, equitable, patentee, parties, real property, settlement, binding, grounds, subsequent assignee, implied assumption, present case, attributes, impliedly, ownership, terms

Civil Procedure, Summary Judgment, Entitlement as Matter of Law, General Overview, Judgments, Appeals, Summary Judgment Review, Burdens of Proof, Standards of Review, De Novo Review, Business & Corporate Compliance, Ownership, Conveyances, Assignments, Contracts Law, Personal Property, Rights of Possessors, Patent Law, Patents as Property, Standards of Performance, Assignments, Infringement Actions, Exclusive Rights, Manufacture, Sale & Use, Antitrust & Trade Law, Intellectual Property, Ownership & Transfer of Rights, Contracts Law, Defenses, Novation, Licenses, Royalties, Types of Contracts, Covenants, Real Property Law, Encumbrances, Restrictive Covenants, Covenants Running With Land, Energy & Utilities Law, Oil, Gas & Mineral Interests, Financing, Grants & Reservations, Joint Ventures & Partnerships, Personalty & Realty Interests, Royalty Interests, Royalties, Overriding Royalties, Warranty Deeds, General Warranty Deeds, Covenants of Title, Third Parties, Delegation of Performance, Contract Formation, Consideration, Adequate Consideration, Contract Interpretation, Intent, Implied Covenants, Quasi Contracts, Assignor & Licensee Estoppel, Remedies, Equitable Relief