Further about the lawsuit filed by Kaiser Family Foundation against Memjet development company

This article comes from an Australian publication:

Aussie Memjet inventor accused in $million fraud

Monday, 19 March 2012

Kia Silverbrook, one of the most prolific patent-holders in the world, is being sued in the US by the non-profit George Kaiser Family Foundation, which backed the development of the inkjet technology company Memjet to the tune of $610 million (A$574.9m).

The lawsuit lodged in Tulsa last week accuses the founder of Memjet, his partner Janette Faye Lee and their patent-holding company Silverbrook Research, of omissions, false representations and false promises made during the multi-million dollar eight-year investment period.

The foundation filed the suit in local US District Court, asking for actual and punitive damages. Kaiser has referred to the lawsuit as a business dispute involving the control of Memjet’s intellectual property claiming it has played a key role in funding the development of the technology since 2004.

Following representations by Silverbrook and Lee as CEO and CFO of Memjet, the foundation made an initial investment of US$50 million (A$47.2m) in 2004 to help develop and commercialise the inkjet technology. However, when the printer had not made it to market by 2009 the charity requested Silverbrook and Lee step down from their leadership positions as a condition for another US$150 million (A$141.5m) investment.

The management shift saw Kaiser become the majority 61 percent shareholder in the company. After yet another $230 million (A$216.8m) injection of funds the foundation sought an IP agreement on Silverbrook’s rights to the technology, as well as a full company audit, and a $10 million (A$9.4m) settlement to DuPont to settle an outstanding debt.

On getting an agreement Kaiser invested another $155 million (A$141.4m) last year but now claims “the defendants have utterly disregarded all of their promises and surreptitiously drained as much value from memjet as they could, to feather their own nests, Silverbrook Research’s pocketbook and the purses of several related companies.”

It also claims Silverbrook Research was planning to offer the memjet technology to other companies. The suit alleges common law fraud, deceit, and negligent misrepresentation.

When contacted by Print21 the Sydney offices of Silverbrook Research had “no comment” on the law suit.