CONTRACTS-RIGHTS OF THIRD PARTY BENEFICIARY-EFFECT OF MICHIGAN BENEFICIARY CONTRACT STATUTE

On agreement to make mutual wills, Stephen and his two sisters entered into an agreement whereby the sisters agreed to will to Stephen, or in event Stephen predeceased them, to his wife, all property which they should receive from their father. Stephen did predecease the sisters, whereupon they executed new wills with no provision for Stephen\u27s widow. Upon death of the last sister, the widow\u27s bill for specific performance of the agreement was dismissed by the circuit court. In affirming on appeal, the Michigan Supreme Court held that the agreement as to Stephen and all other persons except the sisters being without consideration, the sisters were each bound only at the option of the other while both lived, and each could revoke with the other\u27s permission. Execution of the new wills showed a common purpose to do away with all agreements to leave plaintiff anything, the will of each sister amounting to a revocation of the agreement, to which the consent of the other sister is fairly to be inferred in the absence in the contract of any stipulation requiring revocation to be in writing. Rose v. Southern Michigan National Bank of Coldwater, 328 Mich. 639, 44 N.W. (2d) 192 (1950)

PATENTS-EXCLUSIVE LICENSES-LICENSOR AND LICENSEE RELATIONSHIP- LLICENSEE\u27S OBLIGATIONS

Patent licensing is today, as always, a very significant part of patent law. Since royalty licenses allow a patentee to realize pecuniary benefits from his invention without yielding ownership, as he would by an assignment, they are especially attractive to an inventor who anticipates considerable commercial success for his contribution, and who does not desire to lose all control of the invention for a lump sum, the adequacy of which must be, at best, speculative. From the licensee\u27s standpoint, it is usually advantageous to be free of competition from others also operating under the same patent monopoly, at least within a limited area, and consequently an exclusive license is to his advantage. There is no question but that an exclusive license presents various advantages to both parties, and the proportion of patent licenses which are of an exclusive nature is therefore considerable. A peculiar relationship, however, arises between patentees and their exclusive licensees, which does not arise in the case of an ordinary nonexclusive license, and which entails certain implied obligations on the part of the exclusive licensee. The patent licensee\u27s obligations, while established in other fields of contract-license law, have recently been questioned, and will undoubtedly be the storm center of conflicting policies for some time to come. The subject is therefore considered to be of interest, and it is the purpose of this comment to summarize the position of the courts on the matter as it has been expressed up to the present time

PATENTS-EXCLUSIVE LICENSES-LICENSOR AND LICENSEE RELATIONSHIP- LLICENSEE\u27S OBLIGATIONS

Patent licensing is today, as always, a very significant part of patent law. Since royalty licenses allow a patentee to realize pecuniary benefits from his invention without yielding ownership, as he would by an assignment, they are especially attractive to an inventor who anticipates considerable commercial success for his contribution, and who does not desire to lose all control of the invention for a lump sum, the adequacy of which must be, at best, speculative. From the licensee\u27s standpoint, it is usually advantageous to be free of competition from others also operating under the same patent monopoly, at least within a limited area, and consequently an exclusive license is to his advantage. There is no question but that an exclusive license presents various advantages to both parties, and the proportion of patent licenses which are of an exclusive nature is therefore considerable. A peculiar relationship, however, arises between patentees and their exclusive licensees, which does not arise in the case of an ordinary nonexclusive license, and which entails certain implied obligations on the part of the exclusive licensee. The patent licensee\u27s obligations, while established in other fields of contract-license law, have recently been questioned, and will undoubtedly be the storm center of conflicting policies for some time to come. The subject is therefore considered to be of interest, and it is the purpose of this comment to summarize the position of the courts on the matter as it has been expressed up to the present time

CONTRACTS-RIGHTS OF THIRD PARTY BENEFICIARY-EFFECT OF MICHIGAN BENEFICIARY CONTRACT STATUTE

On agreement to make mutual wills, Stephen and his two sisters entered into an agreement whereby the sisters agreed to will to Stephen, or in event Stephen predeceased them, to his wife, all property which they should receive from their father. Stephen did predecease the sisters, whereupon they executed new wills with no provision for Stephen\u27s widow. Upon death of the last sister, the widow\u27s bill for specific performance of the agreement was dismissed by the circuit court. In affirming on appeal, the Michigan Supreme Court held that the agreement as to Stephen and all other persons except the sisters being without consideration, the sisters were each bound only at the option of the other while both lived, and each could revoke with the other\u27s permission. Execution of the new wills showed a common purpose to do away with all agreements to leave plaintiff anything, the will of each sister amounting to a revocation of the agreement, to which the consent of the other sister is fairly to be inferred in the absence in the contract of any stipulation requiring revocation to be in writing. Rose v. Southern Michigan National Bank of Coldwater, 328 Mich. 639, 44 N.W. (2d) 192 (1950)