## Facts

- Motorola and Amkor operated in the semiconductor industry and entered a 1993 “Immunity Agreement” providing cross-access to certain ball grid array package patents.
- Under the Immunity Agreement, Amkor owed Motorola quarterly royalties for its use of Motorola’s covered patents; the agreement was set to expire December 31, 2002.
- Motorola later entered a separate patent license agreement (PLA) with Citizen Watch Co. granting Citizen royalty-free rights to use certain Motorola patents.
- The PLA included (i) a prohibition on Citizen entering into a license agreement with specified existing Motorola licensees and (ii) a clause permitting Citizen to assign the PLA to successor companies without Motorola’s consent; the PLA did not define “license” or “assignment.”
- Amkor purchased most of Citizen’s assets, and Citizen assigned the PLA to Amkor as Citizen’s “successor.”
- Motorola contended the PLA’s anti-licensing provision should prevent Citizen from transferring the benefit of the royalty-free rights to an existing Motorola licensee like Amkor, including by assignment.
- Amkor asserted the successor-assignment clause expressly authorized the transfer and that an assignment is distinct from a prohibited “license” to an existing Motorola licensee.
- The Delaware Superior Court granted summary judgment for Amkor on contract interpretation, upholding the assignment’s validity.
- Motorola appealed.

## Issues

1. Whether the PLA’s successor-assignment clause permitted Citizen to assign its royalty-free patent license rights to Amkor, notwithstanding a separate PLA provision barring Citizen from “licensing” Motorola’s patents to certain existing Motorola licensees.
2. Whether Delaware contract law required construing “license” and “assignment” so the anti-licensing restriction implicitly limited successor assignments to existing Motorola licensees.

## Decision

- The Delaware Supreme Court affirmed summary judgment for Amkor.
- The Court held the PLA’s plain language permitted assignment to a successor without Motorola’s consent.
- The Court held the anti-licensing provision did not override or restrict the separate successor-assignment clause.
- The Court upheld Citizen’s assignment of the PLA to Amkor as valid and enforceable, even though Amkor was an existing Motorola licensee.

## Legal Principles

- Unambiguous contracts are enforced according to their plain meaning; subjective intent and business expectations do not alter clear text.
- Contract provisions must be read together to give effect to each provision and avoid interpretations that render an express clause ineffective.
- Absent clear language equating the concepts, an assignment of an entire agreement to a successor is not treated as a prohibited “license” or sublicensing arrangement.
- Summary judgment is appropriate where contract language is unambiguous and no genuine dispute of material fact exists as to its meaning.

## Conclusion

The court enforced the PLA as written, holding that an express successor-assignment right allowed transfer of Citizen’s royalty-free patent license to Amkor and was not negated by a separate restriction on Citizen’s ability to grant licenses to certain existing Motorola licensees.


Motorola, Inc. v. Amkor Tech., Inc., 849 A.2d 931 (Del. 2004)