Troxel Manufacturing Co. v. Schwinn Bicycle Co.

Summary

In this diversity action, Troxel sought recovery of royalties paid under a patent license after the licensed patent was held invalid. The court held that Lear, Inc. v. Adkins required repayment of all royalties paid, rather than merely excusing future royalty payments, and granted Troxel summary judgment on that issue. The court reserved the question of interest on the royalty payments.

Holdings

1. Under Lear, a patent licensee may recover royalties paid under the license when the licensed patent is adjudicated invalid; the federal policy favoring public use of ideas in the public domain overrides state contract-law doctrines that would otherwise bar recovery.
2. Summary judgment was appropriate because the material facts were undisputed and Lear made the failure-of-consideration inquiry under state contract law immaterial to Troxel's right to recover royalties.
3. The court did not decide the doctrine-of-eviction issue because its application of Lear entitled Troxel to summary judgment for all royalties paid.

Questions Presented

1. Whether Lear, Inc. v. Adkins permits a patent licensee to recover royalties already paid under a license for a patent later adjudicated invalid.
2. Whether the undisputed facts entitled Troxel to summary judgment rather than requiring a fact-specific inquiry into failure of consideration.
3. Whether the doctrine of eviction independently established the date on which Troxel could cease paying royalties.

Disposition

other