Quanta Brief Carter

Quanta Computer Inc. v L.G. Electronics Inc.

Supreme Court of the United States

Appellate Brief

Interest of the Amicus Curiae

• The brief is written by Wi-Lan Inc., a publicly traded corporation founded to commercialize breakthroughs in wireless technologies
• The IEEE has incorporated Wi-Lan's technologies into several of its wireless standards that make reliable, high rate data transmissions available to the public.
• Wi-Lan files brief in support of respondent to address legal issues not brought up by members of the court of other amici
• The company does not approve of the policy adoption the petitioners are advocating due to its likely negative and complicated effect on existing licenses.
• Most notably, the per se patent exhaustion or "single license rule" put forward by the petitioners and the relief requested by petitioners implicates the freedom to contract of Wi-Lan, its licensees, and others who have relied upon existing law.

Argument

• Wi-Lan argues that the rule of law proposed by petitioners will distort market forces and propel electronic component manufacturers into conflict with patent owners because such manufacturers are often unwilling to pay the full value of a patent license for both their own use and the use of others in the distribution chain. The amici argues that the ability of market participants in a vertical chain of distribution to enter into an agreement as they see fit is essential to the system of licensing agreements.
• Thus, the per se patent exhaustion advocated by petitioners will eliminate the freedom on contract. Such a restriction on the flexibility of the parties involved in a licensing agreement is an obstacle to the apportionment of royalties among those parties and will likely result in an increase in litigation.
• Wi-Lan argues that a ruling in favor of the petitioners would impose a law for patent exhaustion that would not permit a patent owner to enforce desired conditions on the sale of a patented article or the license of patent rights and would render irrelevant whether the patent owner has received full value for the patented invention. A ruling for this law would be in direct conflict to previous precedents set by the court. Additionally, this would come into conflict with 35 USC, Section 207, which states that conditions imposed by a patent owner on "the sale of a patented product" or "license of any rights to the patent" shall not be per se negated or exhausted