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Law School Case Brief

Lear, Inc. v. Adkins - 395 U.S. 653, 89 S. Ct. 1902 (1969)

Rule:

The uncertain status of licensee estoppel in the case law is a product of judicial efforts to accommodate the competing demands of the common law of contracts and the federal law of patents. On the one hand, the law of contracts forbids a purchaser to repudiate his promises simply because he later becomes dissatisfied with the bargain he has made. On the other hand, federal law requires that all ideas in general circulation be dedicated to the common good unless they are protected by a valid patent.

Facts:

Respondent John S. Adkins, an inventor, was hired by petitioner Lear, Incorporated n("Lear") corporation to develop a gyroscope. Adkins developed a gyroscope that was incorporated into Lear's production process. Adkins filed an application with the United States Patent Office. Lear began paying Adkins royalties pursuant to a negotiated agreement, but stopped payments after Adkins did not obtain a patent within a certain period of time. Upon receiving his patent, Adkins filed a law suit against Lear in California state court alleging breach of contract and quasi-contract. The trial court granted Lear a directed verdict based on the doctrine of estoppel. The judgment was affirmed on appeals in the state courts. Lear was then granted a writ of certiorari. 

Issue:

Was the doctrine of license estoppel still valid in light of decisions that emphasized a strong federal policy favoring free competition in ideas that did not merit patent protection?

Answer:

No.

Conclusion:

The Supreme Court of the United States vacated the judgment in favor of Adkins and remanded the case for further proceedings, because under the terms of the negotiated contract, Lear was not required to pay Adkins if no patent was issued. The Court expressly overruled Automatic Radio Manufacturing Co. v. Hazeltine Research, Inc. 339 U.S. 827 (1950), and held that the doctrine of license estoppel was inconsistent with principles of contract law and could no longer be applied as a bar to determining patent validity.

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