Chambre commerciale Case Société Bottonificio Fossanese v. Société Almes
13 July 1966
Translated by:
J. Trevor Brown
Professor B. S. Markesinis

Chambre commerciale
Case Société Bottonificio Fossanese v. Société Almes

Concerning the first ground, in its two limbs :

Given that (1) it appears from the findings of the judgement under attack (Aix-en- Provence, 23 April 1964) that by a contract dated 16 November 1957 the Italian company Bottonificio Fossanese granted to Almes, a corporation, for a period of ten years, a licence over its process for the production of buttons, from a synthetic product known as pearly polyester, and undertook to provide the technical assistance necessary for its exploitation and improvement; while Almes undertook to pay to the licensor a quarterly royalty in proportion to the tonnage of polyester moulded; (2) Bottonificio brought an action against Almes in the Commercial Court of Nice for payment of the agreed royalties and damages, and for the termination of the agreement for breach by Almes; and (3) the Commercial Court, having found that, in a bill of exchange produced before it, Almes had recognised that it owed $5800 in respect of the royalties for 1958, ordered it to pay to Bottonificio the equivalent of that sum in French Francs and appointed an expert to draw up an account between the parties, on the basis of the said agreement, which the Court terminated for breach by Almes;

Given that the judgement under attack is criticised on the ground that, in giving judgement in a case brought in order to claim the payment of royalties laid down by a contract described as a licence of a manufacturing process whose nullity for absence of “cause” was alleged by Almes, the Court found that the contract was valid and the claim well-founded on the grounds that in order to justify the payment of a royalty it was sufficient that the licensee did not have sufficient technical knowledge to undertake the manufacturing without the help of the licensor and had itself successively asked for the communication of two manufacturing processes; whereas, according to the application for review, (1) a manufacturing process can be licensed against payment of a royalty only if it has a real practical interest and has remained secret, which was not the case of the licensed process, which was already out of date, known to professionals, and had to be abandoned by mutual agreement between the parties, as Almes had argued in pleadings which were not taken into account; and (2) the second process, no more original than the first, could not in any case be taken into account as a justification for the royalties since it was not mentioned in the contract which provided for the payment of these amounts;

But given that (1) on the one hand the Court of Appeal, in reply to the pleadings of Almes, holds, rightly, that, by revealing to an industrial establishment processes or ways of doing things, so far unknown to the latter and which the latter could have discovered itself only after considerable research or costly trial and error, the licensor provides the other party with a notable advantage, which it may condition upon the payment of royalties; (2) in a sovereign assessment of the facts of the case, the judgement under attack finds, in the ground criticised by the application for review, that Almes did not have, in 1957, sufficient technical knowledge to undertake to the manufacture without the help of Bootnificio, since it found it necessary to ask for help to that end, and that all the correspondence exchanged between the parties shows that “it did in fact use, one after the other, the two manufacturing processes which had been successively revealed to it by the other party”; and (3) in the light of these findings and assessments, the Court of Appeal could hold that the obligation undertaken by Almes in 1957 did not lack “cause”

From which it follows that the ground is without basis in either of its limbs



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