Motorola, Inc. v. Amkor Technology, Inc.

849 A.2d 931 (2004)

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Motorola, Inc. v. Amkor Technology, Inc.

Delaware Supreme Court
849 A.2d 931 (2004)

KL

Facts

Motorola, Inc. (plaintiff) and Amkor Technology, Inc. (Amkor) (defendant) both developed and produced semiconductor assembly test services and products and held patents relating to those products. In 1993, Motorola and Amkor entered into a licensing agreement in which Amkor agreed to pay Motorola royalties to use its patents. In 1996, Motorola entered into a patent-license agreement with Citizen Watch Co. (Citizen), granting Citizen the right to use the same patents included in Motorola’s agreement with Amkor but on a royalty-free basis and including ownership rights in two additional patents that were excluded from Amkor’s agreement. Motorola’s agreement with Citizen contained a provision prohibiting Citizen from entering into a license agreement with certain of Motorola’s current licensees, like Amkor. The agreement also permitted Citizen to assign the agreement to successor companies without Motorola’s consent. The agreement did not define the terms license or assignment. Amkor later purchased most of Citizen’s assets and entered into an agreement in which Citizen assigned its patent-license agreement with Motorola to Amkor as its successor company. Motorola sued Amkor, arguing that Motorola and Citizen’s intent in entering into their patent-license agreement precluded Citizen from assigning it to Amkor, a Motorola licensee. Amkor argued that the assignment clause in Motorola’s agreement with Citizen acted as an exception to the licensing prohibition because Amkor was also Citizen’s successor. After interpreting the contract terms in Amkor’s favor, the lower court granted Amkor’s motion for summary judgment. Motorola appealed.

Rule of Law

Issue

Holding and Reasoning (Holland, J.)

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