## Facts

- Verson Corporation (successor to Verson Allsteel Press Company) manufactured metal-forming presses and possessed related patents and trade secrets (“know-how”).
- In the early 1980s, Verson’s international managers formed an independent entity (Verson International Limited and related entities) to acquire Verson’s international operations.
- The parties executed a license agreement under which Verson provided patents and non-patented trade secrets and permitted the foreign entity to use the know-how.
- For five years, the agreement required both sides to exchange newly developed know-how and imposed territorial exclusivity: Verson had the United States and Canada; the foreign entity had the rest of the world.
- The relationship generated earlier litigation and a 1990 settlement agreement intended to resolve remaining disputes concerning the licensing relationship.
- After the settlement, the foreign entity entered an agreement with Enprotech, a competitor of Verson in Verson’s exclusive territory.
- Verson alleged the Enprotech deal transferred or assigned Verson-derived know-how without Verson’s required consent, in breach of a license provision requiring approval before licensing know-how to another party.
- Defendants contended the deal was a permissible sublicense and argued that settlement and license terms barred Verson’s claims.

## Issues

1. Whether the 1990 settlement agreement barred Verson’s claim by waiving challenges to defendants’ conduct concerning the know-how.
2. Whether defendants held co-ownership rights in the know-how (rather than mere license rights) permitting transfer.
3. Whether an express right to sublicense implied a right to assign the license or know-how to a third party without consent.
4. Whether construing the license to prohibit assignment constituted an unreasonable restraint of trade or violated public policy.
5. Whether the Enprotech agreement could be treated as a sublicense as a matter of law on a Rule 12(b)(6) motion.

## Decision

- The court denied defendants’ motion to dismiss the amended complaint.
- The settlement agreement did not unambiguously bar a challenge to assignment or transfer, because it addressed challenges to “use” rather than clearly covering assignment to third parties.
- Defendants did not establish, as a matter of law at the pleading stage, that they were co-owners of the know-how or otherwise entitled to assign it.
- The court declined to infer an assignment right from a sublicensing clause and applied the general rule against implied assignability of nonexclusive patent licenses.
- The court held the assignment-versus-sublicense characterization of the Enprotech transaction was fact-dependent, and contract language such as “assigns” and “sells” supported Verson’s theory sufficiently to proceed.

## Legal Principles

- A settlement waiver must be clear and unambiguous to bar later claims; language limiting challenges to “use” of licensed know-how does not necessarily waive challenges to assignment or transfer to third parties.
- Nonexclusive patent and analogous IP licenses are generally not assignable by the licensee without the licensor’s consent absent express contractual authorization.
- An express contractual right to sublicense does not, by itself, create an implied right to assign the license or divest licensed rights to a third party.
- Public-policy or restraint-of-trade arguments do not justify implying an assignment right at the pleading stage where the alleged restriction limits transferability but does not foreclose the licensee’s ability to exploit the technology within the contract’s framework.
- Whether a transaction is an assignment or a sublicense may require factual development and ordinarily cannot be resolved on a motion to dismiss when the agreement’s language supports competing characterizations.

## Conclusion

The court allowed Verson’s breach-based claims to proceed, holding that the settlement did not clearly waive objections to assignment and that sublicensing permission did not establish an implied right to assign; whether the Enprotech transaction was an unauthorized assignment could not be decided on the pleadings.


Verson Corp. v. Verson Int’l Grp., PLC, 899 F. Supp. 358 (N.D. Ill. 1995)