## Facts

- Beginning in 1963, Dr. Geza J. Jako, an otolaryngologist, collaborated informally with Pilling Company, a maker of specialized surgical instruments.
- From 1963 through the mid-to-late 1970s, many Pilling laryngoscopes and related instruments were developed substantially according to Dr. Jako’s suggestions.
- Consistent with industry practice, Pilling marketed instruments using the modifying physician’s surname (e.g., “Jako laryngoscope”).
- Dr. Jako never patented any instruments developed from his ideas.
- For roughly two decades, Dr. Jako sought no payment; he had stated he believed it inappropriate for physicians to receive money for such ideas.
- In December 1984, after several years with little or no contact, Dr. Jako demanded royalties: 1% on products bearing his name sold during the prior 15 years and 3% on future sales.
- The parties negotiated in 1984–85; Pilling indicated it would not pay for prior sales but discussed potential compensation for future sales.
- At an April 1985 meeting, Pilling gave Dr. Jako a $5,000 check marked “Advance on Future Arrangements.”
- Negotiations ended without an agreement; Pilling later declined to continue discussions.
- Dr. Jako sued asserting multiple theories, including express contract, implied-in-fact contract, unjust enrichment/quantum meruit, and claims seeking to stop Pilling’s continued use of “Jako” on instruments.

## Issues

1. Whether the evidence created a triable issue that Pilling expressly contracted to pay Dr. Jako royalties or other compensation for use of his ideas and/or surname.
2. Whether the parties’ long course of dealing and later negotiations supported an implied-in-fact contract for compensation.
3. Whether Pilling’s use of Dr. Jako’s unpatented ideas and name supported restitution under unjust enrichment or quantum meruit.
4. Whether Dr. Jako was entitled to injunctive relief restricting Pilling’s future use of the “Jako” name, including whether the name had acquired secondary meaning in the market.

## Decision

- The First Circuit affirmed summary judgment for Pilling on the core compensation theories.
- The court held no express contract obligated Pilling to pay royalties or compensation based on the long-term collaboration and product labeling.
- The court held the record did not support an implied-in-fact contract for payment given the parties’ objective conduct and the absence of any communicated expectation of compensation for many years.
- The court rejected unjust enrichment/quantum meruit recovery because the benefit was conferred under a longstanding non-compensatory understanding.
- On the request to enjoin continued use of “Jako,” the court accepted the secondary-meaning rationale in substantial part but vacated in part and remanded on limited grounds without changing the central conclusion that Dr. Jako lacked a broad right to stop future use.

## Legal Principles

- Express contract requires evidence of a bargain for compensation; unconsummated negotiations about future payment do not establish a pre-existing payment obligation.
- Implied-in-fact contract turns on objective manifestations of mutual assent inferred from conduct; a long period of gratuitous performance and industry custom may negate an inference of intent to pay.
- Restitution for unjust enrichment requires more than receipt of a benefit; retention must be unjust in light of the parties’ expectations, conduct, and surrounding practices.
- A personal surname used for years in product marketing may acquire secondary meaning in the relevant market, limiting the individual’s ability to obtain injunctive relief barring continued commercial use.

## Conclusion

The First Circuit concluded that Dr. Jako’s decades-long, unpaid collaboration and his expressed view that payment was inappropriate defeated claims for contractual or restitutionary compensation, and that long-standing marketplace use of “Jako” supported denial of broad injunctive relief against continued use of the name, subject to limited remand matters.


Jako v. Pilling Co., 848 F.2d 318 (1st Cir. 1988)