Taylor Engines, Inc. v. All Steel Engines, Inc.

The trial Court found that appellants had infringed certain patents, granted an injunction permanently restraining further infringement, and ordered an accounting.

Lloyd M. Taylor, a defendant in the court below but not an appellant here, conceived the idea of a new type of internal combustion engine and in 1937, in consideration of services and financial support, assigned to appellee Selig a half interest in the invention, in any and all improvements thereof, and in any patents granted thereon. Patents were applied for and in due course issued, naming Taylor as the inventor. To facilitate exploitation of the invention All Steel Engines, Inc., was incorporated under the laws of California, hereinafter referred to as the California corporation. To this corporation Taylor and Selig granted an exclusive license to make, use and vend the invention and any improvements thereon. Due to dissatisfaction with terms imposed by the Corporation Commissioner of California in regard to the amount of stock the corporation would be permitted to issue in return for the license, it was decided to abandon the California corporation. A new corporation, All Steel Engines, Inc., hereinafter referred…