• Scope of the MOU

    by  • March 8, 2009 • patent

    Memorylink Corp. v. Motorola, Inc. is a fairly routine story of a joint development agreement gone wrong, with the small, independent inventors at Memorylink complaining they were mistreated by the far larger Motorola. Most of the claims were rightly kicked on statute of limitations grounds, but there was one theory that I thought the court copped out on.

    In 1996 Memorylink and Motorola entered into a MOU for the development of wireless transmission of realtime video. There was also a document entitled the “Wireless Multimedia Core Technology Overview” which described that Motorola would create the “first commercially viable integrated circuitry to provide high speed, digitally formatted data transmission” and Memorylink would create a “highly integrated, multimedia processor and communication control circuit utilizing a proprietary audio-video data transfer format.” Memorylink was able to develop a working prototype using Sharp cameras, its video compression technology, and Motorola’s radio technology. Memorylink demoed it for Motorola, which was “blown away” by the demonstration.

    When the time came for patenting, the story told in the case is that Motorola acted like a heel. Memorylink didn’t have a lawyer and willingly agreed that Motorola could file and prosecute a patent application. When preparing the application, Motorola’s patent attorney sent a letter saying that it was his understanding that Motorola engineers had participated in developing the invention so should be named as inventors, and Memorylink didn’t disagree. Two days after the jointly-owned application was filed, Motorola filed a second application with just the Motorola inventors listed. The first patent application ripened into Patent No. 6,522,352.

    Memorylink alleged a variety of tort-based claims, like fraud and breach of fiduciary duty. These were all kicked on a 12(b)(6) motion, on the basis that Memorylink’s claims were untimely. But the court also held that, by saying too much, Memorylink had “pleaded itself out of court” on a count asking for the correction of inventorship on the first patent. The court cited the Technology Overview, the letter from the patent attorney listing the inventors, a patent agreement which said that the parties were “in the process of defining a specification … in which a Motorola design of a 5GHz radio will be incorporated,” and the patent application as proof that Motorola contributed to the development of the invention described in the patent.

    The problem is that the court never undertook an analysis of the scope of the claims of the invention. There’s no suggestion in the case that the invention described in the MOU or Technology Overview was congruent with the invention described in the patent application. Companies can agree to collaborate on commercializing technology, but that doesn’t mean that inventors from both companies necessarily participated in every invention arising out of the collaboration.

    Perhaps Memorylink will be able to turn this theory against Motorola; a claim for correction of inventorshop on the second patent withstood the motion to dismiss. Seems like what’s sauce for the goose is good for the gander on this.

    Memorylink Corp. v. Motorola, Inc., No. 08 C 3301 (N.D. Ill. Feb. 23, 2009).

    © 2009 Pamela Chestek