IPLore
Super Anarchist
LP had a contractual obligation to pay the fee.So why did LPE pay the fee for so long to BKI if they didn't have to?
According to LP's counter claim they continued to pay the fee until the contract was terminated when they stopped paying the fee. I can visualize LP's counsel's opening statement.
The more interesting question is why did LP renew the contract in 2005 and why was the 2005 amendment so poorly drafted? The original contract in 1983 was for 21 years and expired in 2004 with annual renewals thereafter. It effectively extended BKI's license fees for 21 years, well beyond the expiration of the copyright of the Laser design and any patents or intellectual property surrounding the design or the Laser.
This was a smart move on behalf of BK in 1983. My read is that he got a bit of an opportunity when Performance Sailing (the original manufacturer of the Laser) went bust and so the design rights reverted back to BK. This enabled him to negotiate a 21 year extension to his license income through contract. It is good if you can get it. Contracts like this are not unusual. Someone wants to build something now. You have 5 years remaining on the patent, so you negotiate a contract where your license fees extend beyond the expiry of the patent. 21 years is better than average but not unheard of for a contractual licensing term.
The 2005 amendment extended the agreement with 30 day notice period but to my mind it was poorly drafted because it did not restate or clarify the obligations of the parties in light of some very different circumstances from 1983. Both sides would have benefited from a clearly written new contract. I can see each side arguing different implications of the 2005 extension.