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Supreme Court of Canada

Contract—Patent—Agreement for manufacture—Substitution for new agreement—Evidence.

APPEAL from a decision of the Court of Appeal for Ontario affirming the judgment of the Divisional Court in favour of the plaintiff.

The action was brought by the respondent to recover the amount of royalties claimed to be due to her under an agreement by which appellants were to manufacture certain goods on a machine patented by respondent. Before the patent expired and while the agreement was in force respondent patented another device for making the same class of goods, and after some correspondence with appellants as to the same the latter agreed to take both patents for a year paying a specified sum for royalty, which the appellants accepted. At the end of the year the appellant, claiming that the original agreement was still in force, brought an action for royalties thereunder and obtained a verdict which was affirmed by the Divisional Court and the Court of Appeal.

The Supreme Court reversed the decision of the Court of Appeal and held, Taschereau J. dissenting, that the correspondence and other evidence showed that the agreement by the respondents to take the two patents for a year was in substitution for and superseded the original agreement and appellant could not claim royalty under the latter.

Crerar Q.C. for the appellants.

F.C. Moffatt and Masten for the respondent.






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