VRT, Inc. v. Dutton-Lainson Company

Sanitas (plaintiff) contracted with Dutton-Lainson (defendant) to produce and sell a patient-lifting device, assigning its invention (including the patent application) in exchange for royalties, on the assurance the application was filed and likely to issue. Dutton-Lainson began production, but no patent ever issued because Sanitas's attorney never actually filed the application despite representing that he had; Sanitas sued for breach when Dutton-Lainson stopped paying royalties.

Whether a seller may sue a buyer for breach of contract where the contract was premised on the buyer's exploitation of the seller's patentable invention and the seller misrepresented the patent's status in a way that prevented the patent from issuing.