Zahm Homework 31: Quanta Brief

Brief of Amicus Curiae Motorola, Inc. in Support of Petitioners (Quanta Computer)

Since Motorola handles a great deal of various kinds of agreements and purchases components from various suppliers that are integrated into Motorola products, "Motorola will benefit from the Court's clarification of the patent exhaustion doctrine in this case."

Summary of Argument:

• Motorola supports the Petitioners in that under precedence, the Intel-LGE License Agreement exhausts LGE's patent rights.
  • Motorola uses United States v. Univis Lens Co. (1942) to argue that the products LGE sold to Intel "embody essential features of LGE's asserted patents," and so there is no other non-infringing use for them outside of combining them with other components. This combination may infringe the patents except for the fact that the sale exhausts the patents.
  • Motorola also cites Mitchell v. Hawley (1872) and Adams v. Burke (1873) to support the argument that precedence "was based on the lack of authority to sell patented machines, not language purporting to limit the use of the machines."
  • They argue that under precedence, after the first sale, the "patentee no longer has any patent rights against the article." Because of this, the new owner of the purchased articlemay use the article without any additional license, implied or not, when patent exhaustion is applicable.
  • Lastly, they argue that LGE's attempts to avoid and get around the doctrine of exhaustion with a "rights of use limiting license" to Intel and their customers "is an impermissible attempt to use the patent laws to extract a second payment from the vertical distribution chain."

• Motorola strongly urges the Court to not make any ruling on what the patent exhaustion effect, if any, would be with respect to products sold by Intel prior to the Licensing Agreement.
  • The primary argument for this is that this issue of pre-release products or any other types of agreements (such as covenants not to sue) were not explicitly part of the question posed to the Court to address.
  • With respect to the above point, Motorola cited Yee v. Escondido (1992).
  • Some of the LGE products were sold by Intel prior to the Licensing Agreement, but the facts presented to the Courts were limited, making it unclear whether those sales were unauthorized.
  • "Motorola respectfully submits that given the narrowness of the question presented and the lack of a developed record below regarding the release, and distinctions with respect to covenants not to sue, the Court should leave the question of what impact other types of agreements may or may not have on patent exhaustion for another day.”

Conclusion: “For the forgoing reasons, the Court should reverse the judgment of the Court of Appeals for the Federal Circuit, and in doing so, the Court should limit its holding to products sold pursuant to a license agreement. “