## Facts

- Durham Pecan Company, Inc. operated a pecan-processing plant in Comanche, Texas, including shelling, sorting, and packaging pecans for sale.
- Malcolm R. Wommack was hired by Durham in 1970 as a general laborer; his work involved manual plant tasks, and there was no employment agreement addressing inventions or patent ownership.
- A recurring production problem was the presence of worm-like larvae in pecans; the larvae had to be removed from shelled pecan pieces before the product could be marketed.
- Durham employees initially removed worms by hand, which was difficult because the worms were similar in color to the pecan meat.
- In 1973, Durham began using ultraviolet (UV) light at the “worm table,” which improved visibility but still left workers struggling to distinguish worms from pecan meat because both fluoresced under UV light.
- On his own time at home, Wommack developed an improved worm-removal process that used yellow food coloring to increase contrast under UV light between the worms and pecan meat.
- Wommack invited W. M. Durham (the company’s principal) to his home to view the process, and Durham began experimenting with how to use the process in the plant.
- Mr. Durham asked Wommack for permission to use the new process at the plant, and Wommack agreed.
- Around the same time, Durham agreed to loan Wommack equipment so he could continue his home experiments.
- Wommack later filed a patent application for the process without Durham’s involvement.
- Shortly after Wommack sought patent protection, Durham terminated his employment.
- After the termination, Wommack sent Durham a letter stating that he was revoking permission to use the process and that Durham would need a signed agreement to continue using it.
- Durham continued using the process and asserted it had a right to do so; Wommack threatened suit and then filed a patent infringement action seeking reasonable royalties.
- A jury found the elements of infringement were proved, but the district court ruled that Durham had a shop right (implied license) and dismissed Wommack’s claim; Wommack appealed.

## Issues

1. Whether Durham acquired a shop right (an implied, nonexclusive, royalty-free license) to use Wommack’s patented process based on Wommack’s permission and Durham’s support and reliance.
2. Whether the existence of that shop right barred Wommack from recovering infringement damages or royalties from Durham for using the process in its own plant.

## Decision

- The Fifth Circuit affirmed the district court’s dismissal of Wommack’s infringement claim.
- The court held that Durham possessed a shop right in Wommack’s patented process, so Durham’s continued use in its business was authorized and did not give rise to liability for royalties or damages.

## Legal Principles

- A “shop right” is an implied, nonexclusive, royalty-free license that permits an employer to use an employee’s patented invention in the employer’s business.
- A shop right does not transfer patent ownership; the inventor retains title and may enforce the patent against others, but the employer may continue using the invention within the scope of the implied license.
- A shop right may arise from the parties’ conduct where the employee gives permission for the employer to use the invention and the employer, in reliance, makes contributions such as providing assistance, equipment, or implementing the invention in operations.
- Once an employer reasonably relies on the employee’s authorization and commits resources to using the invention, equity can prevent the employee from withdrawing permission later to demand payment for that continued use.

## Conclusion

The Fifth Circuit concluded that Wommack’s affirmative permission for Durham to use his process, together with Durham’s reliance and support (including loaned equipment and plant implementation), created a shop right—an implied, royalty-free license—so Durham owed no royalties and Wommack could not recover for infringement based on Durham’s use in its own business.


Wommack v. Durham Pecan Co., 715 F.2d 962 (1983)