International Telemeter Corp. v. Teleprompter Corp.

592 F.2d 49 (1979)

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Nature of the Case

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Facts

ITC (P) instituted a patent infringement suit to which Teleprompter (D) intervened as a defendant. D sought the invalidity of the patent. In February 1973, the president of D, Bresnan, wrote to a Los Angeles attorney, Groman, to determine if P was willing to make a negotiated settlement of the suit. Groman returned a draft of that agreement from P that provided for minimum royalties of $75,000 for the first three years and payment of $240,000 for past infringement. Bresnan rejected the draft but suggested a meeting to discuss a possible settlement. The parties met D (Kerr, Kirsch, and Bresnan) and P (Amster, Harrison, Merklen). All but Bresnan were acting as lawyers. The parties met a second time. According to Amster the parties negotiated the terms of a settlement and assigned to Amster the task of preparing the drafts which included a payment of $245,000 by D, and the licensing of the disputed patent with dismissal of the suit. Minor revisions ensued, and clean drafts were submitted. A dispute arose, and Teleprompter decided to separate itself from the other parties and agreed to be bound by the settlement agreement. Separate papers were drafted, and payment terms were arranged. Bresnan signed the agreement on October 30, 1973 subject to the proviso that it would not be delivered until Cooke the Chairman and CEO of D had a chance to review it. The next day, Kirsch received confirmation from Gross that the deal was O.K. and papers and the check would be sent tomorrow. Thereafter, new management at D refused to honor the agreement. The district court found that the parties had reached a final agreement. D appealed.