Quanta Brief - ewolz

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Brief of Dell Inc., Hewlett-Packard, Co., and Gateway, Inc. as Amici Curiae in Support of Petitioners

Dell, Hewlett-Packard, and Gateway argue in support of Quanta Computer. They begin by pointing out that LG Electronics has already taken a royalty from Intel for allowing them the use of LG's patents in Intel's microprocessors. Computer products manufactured by amici and other companies consist of thousands of components which are often manufactured and assembled in multiple steps by multiple companies. The Federal Circuits ruling in this case would imply that LG is entitled to a royalty at each step of the manufacturing stage for the same invention, giving LG more reward than is due for its its invention which will lead to substantial increases in cost of the manufacturing process of computer components.

Instead of following the doctrine of patent exhaustion, which is well established by the Court for over a century, the Federal Circuit has replaced it with a system that allows patent holders to be multiplicably rewarded for its invention at every stage of the manufacturing process. Amici argue that this decision is inconsistent with the patent system in that it is impractical, unfair, and inefficient. It doesn't promote the progress of science and the useful arts, but only furthers the goals of the company holding the patent. The patent law grants the inventor a "limited monopoly" by which to secure financial rewards for the invention. Amici argue that the first vending of an article manufactured under a patent puts the article beyond the reach of the monopoly. Any conditions on the use of the patented article after an authorized sale is not supported by patent law; the conditions must be treated in the same manner that conditions on unpatented commodities are.