Quanta Brief - Snooki

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Brief of Amicus Curiae Intellectual Property Owners Association In Support of the Respondents

  • THE PATENTEE'S ABILITY TO GRANT LIMITED LICENSES IS A RIGHT INHERENT IN THE PATENT GRANT
    • a patent holder may choose instead to sell patented articles or license its technology without restriction, thus exhausting its patent rights with respect to the sold or licensed article
    • The patentee may surrender his monopoly in whole by the sale of his patent or in part by the sale of an article embodying the invention. His monopoly remains so long as he retains the ownership of the patented article. But sale of it exhausts the monopoly in that article and the patentee may not thereafter, by virtue of his patent, control the use or disposition of the article.
  • CONDITIONAL LICENSING IS A COMMON PRACTICE IN MANY INDUSTRIES
    • Court should not lightly disrupt the well-established principle that limited license grants and conditional sales do not exhaust a patentee's ability to control the use of its intellectual property. Relying on this Court's well-settled precedent, there is a broad practice among owners of intellectual property of relying on the ability to condition sales of patented goods.
    • The use of conditional licensing is so widespread that almost every industry routinely employs it and, as a result, its impact is felt throughout the population
    • Patent owners, just like copyright holders, require the ability to condition licenses in order to make their property available for many different applications on a sensible economic basis, with those who derive the greatest benefit from the patented invention paying the most and those deriving the least benefit paying least.
  • PUBLIC POLICY FAVORS ENFORCING CONDITIONAL SALES OR LICENSES
    • Public policy supports enforcing conditioned sales or limited licenses of patented goods. An owner of a property right generally can condition the use of that right by another; thus, a patent owner should be able to fashion a license that grants less than the full patent right. It should be no different when a patentee elects to manufacture the patented item itself rather than grant another the license to do so.
    • Shifting the burden from license agreements to the patenting process would create a number of undesirable consequences. Inventors would be forced to file many patent applications to cover each intended use or embodiment of an invention. Applicants would thus be forced to anticipate all possible options regarding the use and marketing of the product and file separate applications for each. This would increase the number of applications filed with the already overburdened U.S. Patent and Trademark Office.
    • Logic and sound public policy require notice but only by the patentee to the first purchaser or first licensee. Thus, when a patentee grants a limited patent right and wishes to enforce its reserved patent rights against infringers who act outside of the license grant, clear notice to the first purchaser or first licensee is necessary.
  • CONDITIONAL LICENSES ARE SUBJECT TO PATENT EXHAUSTION WHEN PAIRED WITH AN ABUSE OF PATENT RIGHTS
    • Although conditional licenses have been used in the industry and accepted by this Court for many years, it is equally important for this Court to reinforce its decisions holding that conditional licenses cannot protect abusive or illegal practices
    • In cases involving conditional licenses that extend a patentee's monopoly too far, patent exhaustion acts as an appropriate limit.
    • there is no conflict between the line of cases reaffirming a patentee's right to grant conditional licenses and the line of cases applying patent exhaustion.
    • Patent Exhaustion Applies In Cases of Antitrust Violations
    • Patent Exhaustion Applies When a Patentee Attempts To Limit the Use of an Article to a Geographic Region