Boilerplate Language Not Enough To Invalidate Assignment; Attorney's Failure To Flag Potential Claim Does Not Toll Statute of Limitations On Fraud-Based Claims

MemoryLink Corp. v. Motorola Solutions. Inc., __ F.3d __ (Fed. Cir. Dec. 5, 2014) (LOURIE, Moore, O'Malley) (No. 2014-1186, N.D. Ill. (Tharp, J.)) (1 of 5 stars)
Federal Circuit affirms grant of summary judgment in favor of defendants on contract and patent infringement claims and dismissal of tort claims as barred by the statute of limitations.
ASSIGNMENT: In 1998, four designated inventors—two from Memorylink and two from Motorola—signed an Assignment, transferring their rights to both Memorylink and Motorola for and in consideration of one dollar. Memorylink argued that the Assignment lacked consideration and therefore is not a valid contract. Applying state contract law, Federal Circuit found no genuine issue of material fact existed because the Assignment explicitly acknowledges consideration and the use of boilerplate language does nothing to make the consideration invalid or nonexistent. Slip Op. 7-8. Moreover, the consideration was not so insufficient as to shock the conscience of the court. Because Motorola is a co-owner of the patent, it could not infringe.
FRAUD-BASED CLAIMS: In April 1998, a Motorola in-house attorney sent the Memorylink inventors a letter, which included an inventorship determination and offer to discuss that determination. Memorylink filed fraud-based tort claims based on its November 2007 investigation into inventorship and determination that the named Motorola co-inventors were not proper inventors. Illinois has a five year statute of limitations for fraud-based claims, which is not tolled by "an attorney's failure to flag a potential claim or provision of erroneous advice." Id. at 9. Dismissal of the tort claims as untimely was proper because Memorylink knew all the necessary facts more than five years before the filing of the complaint and the accrual of its claim was not delayed by the in-house attorney's letter.

Authors: Leah A. Edelman, Cherylyn Esoy Mizzo