The $1 million that a young inventor collected from Sears, Roebuck & Co. recently in a patent-fraud case could be a mere down payment by the world's largest retailer.
The inventor, Peter M. Roberts, has asked Federal Judge George N. Leighton in Chicago to order Sears to restore to him the patent rights on the new type of socket wrench he invented when he was 19.
In recent years, Roberts' lawyers estimate, Sears has been making an annual profit of about $8 million on the invention, a so-called "quick-release" feature that permits a user to change sockets with one hand.
If he wins back ownership of the patent, Roberts argues that Leighton also should award him all of the profit Sears has made with its near-total monopoly on quick-release wrenches, which it first began to sell in mid-1965.
To start with, that would be $44 million (including the $1 million already awarded). That is the profit Sears earned on the quick-release feature in the period ended Dec. 31, 1976, according to experts who testified for Roberts during the trial of his civil suit for fraud, breach of a confidential relationship, and negligent misrepresentation. The suit covered an 11 1/2-year period ending Dec. 31, 1976.
In addition, Roberts seeks return of the profit earned since that date. Although his lawyers estimate it at $8 million annually, they want Leighton to assign a magistrate to make a precise accounting.
Roberts is not seeking return of any of the profit from additional business, such as sales of wrench sets, generated by Sears' possession of the quick-release. In the period ended Dec. 31, 1976, the "extra" profit was estimated by Roberts' experts at an additional $44 million.
Leighton has set Dec. 8 for a ruling on Roberts' petition. However he decides the case, it is likely to be appealed - for a second time - to the 7the U.S. Circuit Court of Appeals and then to the Supreme Court. After about a year's work on his own time, Roberts completed not only a design of the quick-release, but also a prototype. That was in 1964, when he was a sales clerk in Sears' store in Gardner, Mass. He now lives in Red Bank, Tenn.
At the urging of the store manager, Roberts sent the invention to Sears' main office in Chicago for evaluation. Sears' conduct after that led to the lawsuit. Essentially, he charged, Sears deceived him into accepting a maximum payment of $10,000 in exchange for an assignment of all of his domestic and foreign patent rights.
Without Roberts' knowledge, Sears had been gearing up to turn the invention into a stunning commercial success. Within weeks after the inventor and the company signed the contract, Sears was producing 44,000 quick-release wrenches a week. It sold 19 million of them in 10 years and possibly 8 million in the last couple of years.
Sears had told Roberts that the unit manufacturing cost of the quick-release would be 40 cents to 50 cents. Actually, it was 20 cents initially and under 2 cents later. But Sears set the retail prices to yield a unit profit of about $2.
A jury is Leighton's court tried the case. It found Sears guilty and awarded $1 million on each of the three counts, but not cumulatively. Both sides appealed.
Last April 3, the appeals court upheld the judgment but sent the case back to Leighton for a ruling on whether Sears must give up its rights to the invention. On Oct. 2 the Supreme Court let the ruling stand.