United States: Assignment To Other Party Is Valid If It States Consideration On Its Face, Even If Assignor Subsequently Found Not To Be Inventor

In Memorylink Corp. v. Motorola Solutions, Inc., No. 14-1186 (Fed. Cir. Dec. 5, 2014), the Federal Circuit upheld the district court's grant of SJ in favor of Motorola Solutions, Inc. ("Motorola") that the assignment of the asserted patent to Motorola was valid, that Motorola did not infringe the asserted patent, and that Memorylink Corp.'s ("Memorylink") tort claims were time-barred.

Peter Strandwitz and Bob Kniskern approached Motorola to jointly develop a handheld camera that could wirelessly receive and transmit video signals. Strandwitz and Kniskern had previously formed Memorylink for this joint venture. After a successful demonstration to Motorola, Strandwitz sent a letter to Motorola stating that he "agree[d] that any patents would be jointly owned by Motorola and Memorylink," and that Motorola should "head up the patent investigation." Slip op. at 2 (alteration in original) (citation omitted). Strandwitz also sent Motorola a technical document drafted by Kniskern. After reviewing the document, Motorola's attorney sent a responsive letter describing features to be focused on for patent applications and stating the attorney's understanding that the inventors were Strandwitz, Kniskern, and two Motorola employees. All four designated inventors signed an assignment transferring all rights to both Motorola and Memorylink. The assignment also included a statement that it was granted "[f]or and in consideration of the sum of One Dollar to us in hand paid, and other good and valuable consideration, the receipt of which is hereby acknowledged . . . ." Id. at 3 (alteration in original) (citation omitted). U.S. Patent No. 6,522,352 ("the '352 patent") subsequently issued and listed the four designated inventors. When Memorylink later hired outside counsel to review the inventorship and relationship between the entities, it was advised that Motorola's employees were not proper co-inventors.

Memorylink then filed suit against Motorola, alleging infringement of the '352 patent and various tort claims, and seeking a declaration that the assignment was void for lack of consideration. Motorola moved to dismiss, arguing that the tort claims were barred by the statute of limitations and moved for SJ that there was consideration for the assignment and that Motorola could not be liable for infringement as a co-owner of the '352 patent. The district court granted SJ in favor of Motorola. Memorylink appealed.

"Whether they are later determined to have been erroneously included as co-inventors, and thus those rights are eventually decided to be nonexistent, does not create a genuine issue of material fact on the consideration issue." Slip op. at 8.

On appeal, the Federal Circuit first considered whether the assignment lacked consideration. The Court rejected Memorylink's argument that the assignment recited boilerplate consideration language and that the assignment lacked consideration because Motorola's employees were not proper co-inventors, so they had no rights to assign. The Court explained that "the Assignment explicitly acknowledges consideration for the sale, assignment, and transfer of rights relating to the wireless video technology," and that the use of boilerplate language did not make the stated consideration invalid or nonexistent. Id. at 7-8. The Court also determined "consideration was actually exchanged" even if the exchange of ownership was the only intended consideration. Id. at 8. The Court explained that Motorola's employees "did in fact transfer whatever ownership rights they possessed to Memorylink and Motorola by executing the Assignment," and that whether "they are later determined to have been erroneously included as co-inventors, and thus those rights are eventually decided to be nonexistent, does not create a genuine issue of material fact on the consideration issue." Id. The Court also explained that a party assigning patent rights before the patent application is filed or during prosecution cannot guarantee that a patent will issue or that an issued patent will not be invalidated. The Court then considered Memorylink's arguments about unfairness and mistake, and found them unconvincing. Noting that Memorylink had asserted a lack of consideration, not mutual mistake, the Court explained that the "only reasonable inference from the facts alleged . . . would be that Motorola was not mistaken as to inventorship, which precludes any basis for finding a mutual mistake." Id. at 9. Based on this analysis, the Court held that the district court did not err in granting SJ in favor of Motorola on the issue of whether there was consideration supporting the assignment.

The Court next considered the district court's dismissal of Memorylink's tort claims. The Court rejected Memorylink's arguments that "mere knowledge of the facts underlying a claim is insufficient to start the statute of limitations clock," and that "the claim should not accrue until those facts lead to the conclusion that a legal claim exists." Id. The Court noted that "Memorylink knew all the facts necessary to assert its claims, and therefore its causes of action accrued" outside of the permissible limitations period. Id. at 10. The Court supported this conclusion, observing that the letter from Motorola's attorney provided an opportunity for Strandwitz and Kniskern to question the inventorship determination, but neither did so. The Court thus concluded that Memorylink reasonably should have concluded that a legal claim existed at that time and Memorylink did not subsequently learn any new or significant facts to warrant tolling the statute of limitations. Thus, the Court held that the district court did not err in dismissing the tort claims as untimely.

Finally, the Court affirmed the grant of SJ of noninfringement, holding that there was "no genuine issue of material fact because there was a valid assignment, and thus no error of law in granting summary judgment." Id. at 11.

Accordingly, the Court affirmed the district court's grant of SJ that the assignment did not lack consideration, that Motorola did not infringe the '352 patent, and that the tort claims were time-barred by the statute of limitations.

Judges: Lourie (author), Moore, O'Malley

[Appealed from N.D. Ill., Judge Tharp Jr.]

This article previously appeared in Last Month at the Federal Circuit, January, 2015.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
22 Jan 2019, Webinar, Washington, DC, United States

As part of Strafford Publications’ webinar series, Finnegan partners Shana Cyr and Mark Feldstein will provide essential updates on FDA practice and patent law relating to biologics and biosimilars.

27 Jan 2019, Other, Washington, DC, United States

Finnegan is a sponsor of the Association of Corporate Patent Counsel Winter Meeting. Finnegan partner Erika Arner will join the panel discussion “PTAB Review & Litigation.”

27 Jan 2019, Other, Florida, United States

Finnegan is a sponsor of the Association of Corporate Patent Counsel Winter Meeting. Finnegan partner Erika Arner will join the panel discussion “PTAB Review & Litigation.

Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions