Quanta Brief (John Gallagher)

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Appellate Brief by Aerotel (on Behalf of LG Electronics)

In the CAFC, it was ruled that the LGE patents were not exhausted by the sale of the Intel made products under these patents to Quanta Computer. Therefore, LG had the right to limit the way in which the components were used by Quanta, including prohibiting them from combining the Intel made components with other non-Intel components. In this brief, Aerotel argues that the holder of a patent can exercise rights over a patented product in the hands of a downstream user under certain conditions. The patent is exhausted only if the maker sells the product unconditionally. In this case however, LG imposed restrictions on the way in which Intel could sell the products, preventing exhaustion. Aerotel argues that the theory of exhaustion requires that the holder of the patent has received the full value of the goods in the sale.