Winston Was an Engineer of Great Repute in the Field

Essay

Winston was an engineer of great repute in the field of fluid mechanics. Some years ago, he took out a patent on a general theory of how fluid moves through a particular shape of valve, and a patent on a unique valve specifically adapted for use in a nuclear reactor. He had formed a company that had produced this latter valve in the Canadian market and other countries which used Canada's CANDU reactor. After a number of years of successful business operations, Winston was approached by a group of investors interested in purchasing his company, and a deal was concluded. As part of the contract of purchase and sale, Winston sold the patent to the valve and agreed that he would not work in or carry on any other business manufacturing valves, nor would he engage in any other business that might compete in any way with the purchasers business for a period of ten years. The restrictions applied on a worldwide basis. Winston retired to Florida and after five restless years again became involved in the field of fluid mechanics, making designs for certain parts for nuclear reactors for submarines of the United States Navy. One particular part that he designed and built was based on the patented principles of his general theory, which he had never sold, and while it was similar to his former valve in many ways, a slight change had rendered it patentable in its own right. On learning of the multimillion dollar sales that Winston had effected to the U.S. Navy, the purchasers of his former business brought suit for his breach of the contract. With his new valve, Winston had generated profits of $5 million before the "ten-year waiting period" had expired and $10 million after the period had expired. Discuss the relevant issues of contract bearing on this case, the relevant aspects of business which would assist the court in determining damages, if any, and render your own decision.
A.C. 535.