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First wave of amicus briefs filed in Quanta v. LG, argument set for January 16

November 26, 2007
Post by Blog Staff

Earlier this month, amicus briefs either supporting the Petitioner or neither party were filed with the Supreme Court in connection with Quanta Computer, Inc. v. LG Electronics, Inc (No. 06-937). Our previous coverage of the case can be found in these three posts. The Court also set oral argument for January 16, 2008.

Some discussion of the amicus filings and links to the briefs after the jump.

The question presented in the case is:

Whether the Federal Circuit erred by holding, in conflict with decisions of this Court and other courts of appeals, that respondent's patent rights were not exhausted by its license agreement with Intel Corporation, and Intel's subsequent sale of the product under the license to petitioners.
Some amicus briefs focus on and request the Court to resolve issues potentially much broader than the question presented, and others urge the Court to find a happy middle ground.For example, the Licensing Executives Society urged the Court to resolve what it views as inconsistent rulings regarding whether the patent exhaustion doctrine is a species of the implied license doctrine or a limitation on the patent grant itself. LES finds this issue determinative in this case because notice to a purchaser of a patented good is a way of overcoming an implied license, but it is not a way of overcoming a limitation on the patent grant.Conversely, IBM specifically urged the Court to maintain the general framework of the Federal Circuit's prior holdings while overturning the Federal Circuit's holding in this case. According to IBM, the Court should uphold the patent exhaustion doctrine if the downstream purchaser only has notice of and does not expressly agree to the limitation on the patented product, but the Court should find an exception to the patent exhaustion doctrine if the downstream purchaser expressly agrees to such limitation. In other words, according to IBM, the patent holder would have to require its licensors to make agreement to the limitation an express condition of all subsequent downstream sales of the product for it to be an exception to the exhaustion doctrine.The outcome of the case could have a substantial effect on how patent license agreements are both drafted and construed by courts. For example, if the Court determines the patentee's rights were exhausted by its license agreement regardless of the restrictions placed on the license, one potentially impact of this case could be how licensors draft liquidated damages clauses, as such a holding may limit the availability of patent infringement damages for unlicensed sales. Also, if some unlicensed sales are taken outside the framework of patent infringement and are instead considered ordinary breach of contract claims, cases construing patent license agreements may be decided more by the regional circuits instead of by the Federal Circuit.Relevant links:


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