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Chief Judge Stark grants partial summary judgment on patent ownership

Chief Judge Leonard P. Stark recently considered Plaintiff S3 Graphics’s motion for partial summary judgment on patent ownership and license, and the parties’ motions to preclude expert testimony.  S3 Graphics Co., Ltd. v. ATI Technologies, ULC, et al., C.A. No. 11-1298-LPS (D. Del. Oct. 21, 2015).  In support of its motion for summary judgment, S3 Graphics argued that summary judgment that it owns the disputed patents was appropriate because a January 2001 assignment “unambiguously assigned all rights” in the patents to S3 Graphics.  Id. at 13.  Defendants, on the other hand, argued that the patents were in fact assigned to defendant ATI by virtue of a March 2001 asset purchase agreement.  Id.  And, even if the January 2001 Assignment did assign the rights in the patents to S3 Graphics, defendant ATI was a “bona fide purchaser without notice” so, pursuant to 35 U.S.C. § 261, the assignment was void as against Defendants.  Id.  Applying settled principles of Delaware contract law, Judge Stark interpreted the unambiguous contract terms to find that the 2001 assignment explicitly conveyed to S3 Graphics “the full and exclusive right, title, and interest in” the patents .  Id. at 13-15.  Judge Stark also rejected Defendants argument that they became subsequent purchasers without notice by virtue of the March 2001 asset purchase agreement.  Judge Stark interpreted the unambiguous terms of the March 2001 assignment to find that it does not include the disputed patents.  Id. at 18-25.  Judge also found in S3 Graphics’s favor on the issue of whether Defendants have an express license to the patents, but denied summary judgment as to the issue of implied license.  Id. at 26-30.

Judge Stark also excluded the portions of Defendants’ expert report “directed solely to whether the various contractual provisions at issue” establish who owns the disputed patents because the Court “resolved this issue as a matter of law.”  Id. at 45.  Judge Stark determined, however, that other parts of the expert report were relevant to the issue of implied license which will go forward to trial.  Id.  Judge Stark also excluded portions of S3 Graphics’s expert’s report relevant to what assets ATI acquired through the asset purchase agreement.  Judge Stark found that the expert was not qualified as an expert on contract interpretation and “never even read the APA.”  Id. at 49.

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