Quanta Computer, Inc. v. LG Electronics, Inc. (901422129)

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Read for 4/29/11

Reading Notes

  • Decided by the USSC in 2008
  • Decide if patent exhaustion applies to the sale of components of a patented system that must be combined with additional components in order to practice the patented method
  • USSC says the sale did exhaust patents because the doctrine applies to method patents and the license authorizes the sale of components that substantially embody the patents
    • Different than the CAFC
  • LGE licensed a patent portfolio to Intel which permits them to make and sell chipsets that use the LGE patents
  • License limitations
    • No third party
  • Claims to not alter rules of patent examination
    • License did not extend to any product made by combining an Intel product with any non-Intel product
  • Quanta purchased from Intel and made computers using Intel parts with non-Intel memory and buses in ways that practice LGE patents
  • Eliminating method patents from exhaustion would seriously undermine the doctrine

Patent Exhaustion

  • Doctrine provides that the initial authorized sale of a patented item terminates all patent rights to that item