## Facts

- John Meehan invented a method and apparatus for packaging and dispensing anti-icing products for internal combustion engines.
- In 1964, Meehan entered a written agreement granting Hoffman-Taff (later succeeded by PPG Industries, Inc.) exclusive rights in the invention and requiring PPG to assess patentability, pursue patents if practicable, and pay royalties on sales.
- Patents were obtained in the United States, Canada, and the United Kingdom; the U.S. patent expired in January 1983, the Canadian patent in December 1984, and the U.K. patent in 1981.
- The agreement tied royalty payments to expiration of the “resulting patents,” which Meehan argued meant royalties on sales continued until the last patent expired anywhere.
- After the U.S. patent expired, PPG stopped paying royalties on U.S. sales despite the continuing Canadian patent.
- Meehan sued for breach of contract, seeking royalties on U.S. sales made after January 1983 and before December 1984.

## Issues

1. Whether federal patent law bars enforcing a contract term requiring royalties on U.S. sales after the U.S. patent expires, even if a foreign patent on the same invention remains in force.
2. Whether a royalty clause tied generally to “resulting patents,” without separating U.S. patent rights from foreign patents or non-patent rights, impermissibly extends the U.S. patent monopoly beyond its statutory term.

## Decision

- The Seventh Circuit affirmed summary judgment for PPG.
- The court held that Meehan could not collect royalties on U.S. sales after expiration of the U.S. patent.
- The court reasoned that enforcing post-expiration royalties on U.S. sales would unlawfully extend the economic effect of the U.S. patent beyond its term.

## Legal Principles

- Under Brulotte v. Thys Co., a royalty agreement is unenforceable to the extent it requires patent-based royalties for use or sales after the relevant patent expires.
- Federal patent policy limits patent exclusivity to the statutory term; after expiration, the invention enters the public domain, and contract law cannot be used to recreate patent-like exclusivity.
- The continued existence of foreign patents does not justify post-expiration royalties on U.S. sales where the agreement does not separately price or allocate royalties to foreign rights.
- Post-expiration payments may be enforceable only if the agreement distinctly identifies and supports them with independent non-patent consideration (e.g., separable trade secret or know-how rights) and structures royalties accordingly.

## Conclusion

The court held that federal patent law precludes enforcing a royalty provision requiring payments on U.S. sales after the U.S. patent expires when the agreement does not separately allocate royalties to foreign patent rights or other independent non-patent consideration.


Meehan v. PPG Indus., Inc., 802 F.2d 881 (7th Cir. 1986)