Citations
- 769 F.3d 966
Full opinion text
EASTERBROOK, Circuit Judge.
For many years Whirlpool purchased injection-molded plastic knobs and decorative metal stampings from Grigoleit. In 1992 Whirlpool told Grigoleit that it would replace its products with those made by Phillips Plastics. After concluding that Phillips was using a method protected by its patents, Grigoleit demanded that Whirlpool switch back. In 1993 they struck a bargain: Grigoleit would license Whirlpool and Phillips to practice the patents, and instead of royalties Grigoleit would get some of Whirlpool’s business. Paragraph 3 of the contract says:
Whirlpool shall not be' obligated to pay Grigoleit any monies as royalties ... so long as Whirlpool continues to purchase from Grigoleit Whirlpool’s requirement for present styling of knobs for the “Estate” and “Roper” brand lines of automatic clothes washers and dryers and so long as ... Whirlpool continues to give serious consideration to Grigoleit [for other product lines when Grigoleit can provide] more than parity in technology, quality, service, delivery and price in comparison with other qualified suppliers[.]
The agreement expired, with the patents, in 2003.
From 1993 through 2003 Whirlpool bought all knobs for the Estate and Roper lines from Grigoleit. But it bought some knobs for other lines from Grigoleit’s competitors, and Grigoleit concluded that it had not received the “serious consideration” to which ¶ 3 entitled it. That dispute was arbitrated, as the contract provided. The arbitrator concluded that Whirlpool had failed to consider Grigoleit’s parts for some lines of washers and dryers “and therefore is liable for payment of money royalties or damages as the courts may determine.” In this suit under the diversity jurisdiction, Grigoleit demanded damages calculated by a contract measure: the profit it would have made had Whirlpool purchased its requirements of knobs exclusively from Grigoleit. The district court held, however, that Whirlpool had not promised to give Grigoleit’s knobs serious consideration; instead it had promised to pay royalties if it failed to do so. -2010 U.S. Dist. Lexis 45524 (C.D.Ill. May 10, 2010). Unfortunately, the contract failed to specify the royalty Whirlpool would owe if it did not meet the conditions for a royalty-free license. The court concluded that a reasonable royalty falls in the range of 1$ to 12