02/28/15

Memorylink v. Motorola: Sufficiency of Consideration in an Assignment


Category: Civil Procedure 
 
 
 
By: Christian Hannon, Contributor 
 
TitleMemorylink v. Motorola Solutions, No. 2014-1186 (Fed. Cir. Dec. 5, 2014 ).
IssueMemorylink Corp. (“Memorylink”) appeals from the decisions of the United States District Court for the Northern District of Illinois (i) granting summary judgment in favor of Motorola Solutions, Inc. and Motorola Mobility, Inc. (collectively, “Motorola”) on the contract [] claims, [...] and (ii) dismissing various tort claims as barred by the statute of limitations [...].
Memorylink at *2.
HoldingBecause we conclude that the district court did not err in granting summary judgment or in dismissing the tort claims, we affirm.
Id.
 
Procedural HistoryMemorylink Corp. (“Memorylink”) appeals from the decisions of the United States District Court for the Northern District of Illinois (i) granting summary judgment in favor of Motorola Solutions, Inc. and Motorola Mobility, Inc. (collectively, “Motorola”) on the contract and patent infringement claims, Memorylink Corp. v. Motorola, Inc., No. 08 C 3301, 2013 WL 4401676 (N.D. Ill. Aug. 15, 2013) (“Summary Judgment Opinion”), and (ii) dismissing various tort claims as barred by the statute of limitations, Memorylink Corp. v. Motorola, Inc., No. 08 C 3301, 2009 WL 464338 (N.D. Ill. Feb. 23, 2009) (“Dismissal Opinion”). Because we conclude that the district court did not err in granting summary judgment or in dismissing the tort claims, we affirm.
Memorylink, at *2.
 
 
Legal Reasoning (LOURIE, Moore, O'Malley)
Background
Inventorship DeterminationIn late 1997, Peter Strandwitz (“Strandwitz”) and Bob Kniskern (“Kniskern”) [collectively "Memorylink"] approached Motorola, seeking to jointly develop a handheld camera device that could wirelessly transmit and receive video signals. [...] [Motorola's attorneys then sent a letter describing] the features to be focused on for patent applications and stated the attorney’s understanding that the inventors were Strandwitz, Kniskern, and two of Motorola’s employees: Gary Schulz (“Schulz”) and Jan-Michel Wyckoff (“Wyckoff”).
Memorylink, at *2-3.
The AssignmentIn June 1998, all four designated inventors signed the Assignment and Agreement ("Assignment"), transferring their rights to both Motorola and Memorylink. The Assignment begins with the statement, "[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...." The designated inventors also signed an inventor declaration for the patent application, which Motorola filed once the Assignment was executed. U.S. Patent 6,522,352 ("the '352 patent"), which lists Strandwitz, Kniskern, Schulz, and Wyckoff as inventors, issued in February 2003.
Id. at *3.
Contract Issue : Sufficiency of Consideration
Standard AppliedIllinois courts follow the “four corners” rule when interpreting contracts, which requires that “an agreement, when reduced to writing, must be presumed to speak the intention of the parties who signed it. . . . It is not to be changed by extrinsic evidence.” Consideration is a basic requirement of a contract, but nominal consideration will suffice to support a contract, Courts “will not inquire into the adequacy of the consideration.”
Memorylink, at *6 (internal citations omitted).
Parties' ArgumentsMemorylink claims that [...] the underlying agreement was the mutual exchange of ownership interests from the inventors to Memorylink and Motorola. But because the Motorola employees were not proper co-inventors and therefore had no ownership interests to assign, Memorylink asserts, Strandwitz and Kniskern received no consideration. [...] Motorola responds that there is no genuine issue of material fact because consideration is explicit on the face of the agreement. Even if the consideration were actually the exchange of ownership.
Id. at *7.
Court's FindingWe agree with Motorola that there is no genuine issue of material fact that consideration existed, because the Assignment explicitly acknowledges consideration for the sale, assignement, and transfer of rights relating to the wireless video technology. [...] The use of boilerplate language does not make the stated consideration invalid or nonexistent. Alternatively, if extrinsic evidence is considered, then the district court held that other intended consideration could be found from various exchanges [i.e., Memorylink availing themselves of Motorola's patent prosecution representation] between Motorola and Memorylink.
Id. at *7-8.
Tort Claims Issue: Statute of Limitations
Standard AppliedThe statute of limitations for fraud-based claims in Illinois bars claims five years after accrual. The discovery rule delays the start of the clock until “the plaintiff knew or should have known” of the injury, but the normal five-year period applies where the purported fraud is “readily apparent to the naked, non-expert eye,” An attorney’s failure to flag a potential claim or provision of erroneous advice does not toll the statute of limitations.
Memorylink, at *9 (internal citations omitted).
Parties' ArgumentsMemorylink argues that mere knowledge of the facts underlying a claim is insufficient to start the statute of limitations clock; rather, the claim should not accrue until those facts lead to the conclusion that a legal claim exists.Because of the fiduciary duty owed to it by Motorola’s attorney, Memorylink maintains that it had no reason to question the improper inventorship determination and thus could not have concluded that any of the tort claims existed before its external investigation in 2007. Motorola responds that Memorylink knew all the relevant facts that serve as the basis for its claims—who was listed as an inventor and who contributed what—well before the statute of limitations had run.
Id. at *9-10.
Court's FindingWe agree with Motorola that the district court properly dismissed the tort claims because Memorylink knew all the facts necessary to assert its claims, and therefore its causes of action accrued, more than five years before it filed suit. Memorylink alleged that as of April 1998, although “neither Schulz nor Wyckoff had contributed or done anything towards the conception of the Invention,” Motorola had asserted that all four people were co-inventors. The Dunlop Letter provided a prime opportunity for Strandwitz and Kniskern to question that inventorship determination, yet they failed to do so.
Id. at *10 (internal citations omitted).
Conclusion
For the foregoing reasons, the district court’s grant of summary judgment and dismissal of the tort claims are affirmed.
Memorylink, at *11.
 
 
 
 
 
 
© 2000-2019, Journal of the Patent & Trademark Office Society
Disclaimer & Privacy Policy