Quanta Brief Summary 901360293

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Brief of Amici Curiae Interdigital Communications LLC and Tessera, Inc. in Support of Respondent

This brief is presented by InnerDigital Communications, LLC, a company that develops technology for the wireless communications industry and Tessera, Inc. a provider of miniaturization technologies of the industry. The thrust of their argument is that the viability of high technology industries similar to those depends on the ability to use flexible licensing strategies for components, systems, and methods at different levels of the manufacturing, distribution, and retail level to use patented inventions to their fullest potential. They set about arguing this point in two ways.

I.Separate Licensing of Components, Systems and Methods at Multiple Levels Is Consistent With the Patent Act and This Court’s Precedents and is Essential to the Economic Health of the High Technology Industry

  • LG Electronics have been able to successfully show that separate licensing of component and system patents at the multiple levels of manufacturing, distribution, and retail is consistent with Patent Act, 35 U.S.C.
  • Quanta falsely argues that its position makes rational sense economically stating that a patentee would not make more by negotiating separately with the manufacturer, distributor, retailer, and consumer than by charging the entire amount to one party and having them pass along the cost
  • Quanta ignores the value that is added by each innovation at each level to capture the full economic value of the contribution of the various patents
  • Licensors and licensees should also have the freedom to do business best suited to their interests based on the scenarios that may be present
  • Companies like InterDigital, and Tessera are businesses which use a multi-level manufacturing and distribution chain and rely significantly on revenues as a result of their licensing of their technologies to manufacturers and assembly houses
  • To fully protect the innovations they come up with, it is necessary to differentiate between component, systems, and method patents
  • Quanta is too simplistic in its analysis of profitability, missing the point that a set of patents covering a component doesn’t have the same value as a set of different patents that cover a system-level invention
  • Real world conditions dictate that companies like InterDigital and Tessera need flexibility because the clients they deal with all have different ways and priorities in conducting their business
  • Patent exhaustion cases relied on by Quanta involve sales of patented items coupled with attempted restrictions on the sale of items that don’t fit the mold of what they’re doing
  • The court should not usurp the freedom and flexibility that has been established and not extend old precedents to modern business practices that sustain the economy

II.Modern Licensing in the High Tech Industry Often Uses Technology Transfer Agreements That Differ Substantially From Patent Licenses and Should Not be Seen as Raising Any Patent Exhaustion Issues, Regardless of the Decision in This Case

  • Licensing agreements are not always like the ones seen in this case
  • Intellectual property for companies like InterDigital consists only partly in patents as it can also include things like trade secrets or copyright
  • To enable manufacturers of different components to build their devices, they have to expose and transfer a wide scope of their intellectual property
  • This dispersal of intellectual property involving the transfer of technology involves a technology transfer fee and not a patent license fee
  • Technology transfer agreements have not been debated before the Court and because they are explicitly defined as not being patent licenses, they don’t fall under the jurisdiction of the Court’s precedents on patents
  • Because of this, Court should not make a decision that will implicate these technology transfer agreements