Vrt, Inc. v. Dutton-Lainson

530 N.W.2d 619 (1995)

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Nature of the Case

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Facts

Sanitas was formed to market and sell an invention by Vanderheiden for lifting and moving hospital patients. Sanitas filed a patent and sought out a manufacturer. Dutton-Lainson (D) and Sanitas executed an agreement for P to sell those assets to D. The contract also required Sanitas to deliver to D at closing specific assignments to the assets that were to be reasonably required by D. At closing, Sanitas delivered a bill of sale and assignment. Sanitas then changed its name to VRT, Inc, (P). D then produced the equipment and sold it with some modifications to the invention with part of the invention not being used, as it was unstable. In fact, Sanitas' attorney had not filed the patent application when he represented that he did and did not file it until the contract was executed. Because of the late filing, the patent could not issue. P sued its attorney for malpractice. That action was ultimately settled. P then sued D to enforce the royalty agreement.