Univis Corporation is the owner of a number of patents relating to multifocal lenses. It has licensed Lens Company to manufacture lens blanks embodying the Corporations patented technology and to sell them to designated licensees of the Corporation upon Lens Companys payment to the Corporation of an agreed royalty of 50 cents a pair. The lens blanks are rough opaque pieces of glass of suitable size, design, and composition for use, when ground and polished, as multifocal lenses in eyeglasses. Each blank is composed of two or more pieces of glass of different refractive power, of such size, shape, and composition and so disposed that when fused together in the blank it is said to conform to the specifications and claims of some one of the Corporations patents. The Corporation also issues three classes of patent licenses: (1) licenses to wholesalers that authorize them to purchase the blanks from Lens Company, to finish them by grinding and polishing, and to sell them to licensed retailers only at prices set by the Corporation licensor; (2) licenses to finishing retailers that authorize them to purchase the blanks from the Lens Company, to grind and polish them and adjust the lenses, in frames or supports, to the eyes of the consumers, and to sell the multifocal eyeglasses to their customers at prices set by the Corporation licensor; and (3) licenses signed by both the Corporation and a licensed wholesaler that grant a prescription retailer a franchise to prescribe and fit Univis lenses and to sell the finished lenses only to consumers and only at prices prescribed by the Corporation. The prices prescribed and maintained under the licensing system are: $3.25 a pair for the blanks sold by the Lens Company to wholesalers, and $4 a pair for those sold to finishing retailers; $7 a pair for finished lenses sold by wholesalers; $16 a pair for white, and $20 for tinted, lenses sold to consumers by prescription and finishing retailers. The Corporation enforces a policy of issuing licenses only to qualified licensees who are required to maintain high standards of practice and to be skilled in the performance of the services which they undertake to render. Price cutters are not eligible for prescription retailer licenses. The license agreements with both the wholesalers and the finishing retailers require licensees to notify the Corporation of any violation on the part of any jobbers or other licensees of the agreements respectively made by them with the Corporation, and to assist the Corporation in all possible ways in securing evidence against, and enforcing its agreements with such jobbers and licensees. You are the owner of a kiosk at a suburban mall, where you currently sell nonprescription sunglasses and reading glasses. A number of your customers have encouraged you to expand your line to include prescription multifocal eyeglasses. You discover that a retailer licensed to finish and sell Univis lenses is going out of business. She tells you that she just cant sell enough multifocal eyeglasses to survive given the inflated price of $16 per pair of finished clear lenses (and $20 per pair of finished tinted lenses) her licensor requires her to charge her customers. She then offers to sell you her inventory of 500 pairs of unfinished Univis blanks for $5 a pair, only $1 more than she paid the licensed wholesaler for the blanks.

When your nephew, a struggling optometry student, asks you for money at Thanksgiving dinner, you ask him whether he would be willing to finish the lenses for $2 per pair. After he readily agrees, you run the numbers and realize that, given your low overhead costs, you could sell finished clear lenses for $12 per pair and tinted lenses for $15 per pair and still clear a handsome profit. What factors should you take into account when deciding whether to proceed? What due diligence should you do? Are there any legal risks associated with your plans? If so, how would you estimate and manage them? [See United States v. Univis Lens Co., 316 U.S. 241 (1942); Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S. 877 (2007); Impression Products, Inc. v. Lexmark International, Inc., 137 S. Ct. 1523 (2017).]