on PTSC claims?...

Last week US Supreme Court granted Review of a 9th Circuit Court decision which held there was no "Exhastion of Patent rights" where the claimant in a Patent infringement case has "Licensed" its intelectual property to a licensee who makes products, (i.e. chips) that are sold to others who use them to make products...

The following is from the AMICUS BRIEF filed by US Government seeking REVIEW by the Supreme Court...

"In its brief as Amicus Curiae, the United States explained that the question presented by this case is:

Whether a patentee's federal patent rights are exhausted by a licensee's authorized sale of an essential component that has no reasonable use other than in practicing the patented invention, when the patentee has purported to retain in its licensing agreement the right to pursue patent infringement claims against those who purchase the component from the licensee and use it for its only reasonable use.

The doctrine of patent exhaustion, also known as the first-sale doctrine, implicates fundamental questions concerning the scope of the exclusive rights conferred under the patent laws. Since this Court last squarely addressed the doctrine in United States v. Univis Lens Co., 316 U.S. 241 (1942), the doctrine has evolved in the Federal Circuit in a manner that appears to conflict with this Court's patent-exhaustion cases, thereby creating uncertainty as to when a patentee may enforce, through federal-court actions for patent infringement (as opposed to state-law contract actions), downstream limitations on purchasers following an authorized sale. Whatever rights a patentee may have to enforce such limitations as a matter of contract, the question whether a patentee may invoke federal patent law to enforce such limitations against authorized purchasers is one of considerable practical importance, and this case presents an adequate vehicle for addressing that question."

The progression of the Quanta vs. LG in the lower Courts is sumed up below.

"The Federal Circuit decision in Quanta V. LG, the Federal Circuit pointed to two possible sales that could be at issue. First, prior to this litigation, LG granted Intel a license covering its entire portfolio of patents on computer systems and components. This transaction constitutes a sale for exhaustion purposes. Second, with LG’s authorization, Intel sold its microprocessors and chipsets to each defendant. Notably, this sale involved a component of the asserted patented invention, not the entire patented system. It was this second sale that the district court relied upon as an exhausting sale. In finding the unconditional sale requirement satisfied, which must be the case in order for their to be patent exhaustion, the district court concluded that the defendants’ purchase of the microprocessors and chipsets from Intel was unconditional because the defendants’ purchase of the microprocessors and chipsets from Intel was in no way conditioned on their agreement not to combine the Intel microprocessors and chipsets with other non-Intel parts and then sell the resultant products. The Federal Circuit disagreed with the district court, explaining that although Intel was free to sell its microprocessors and chipsets, those sales were conditional, and Intel’s customers were expressly prohibited from infringing LG’s combination patents."...

The question remains, what will the Supreme Court do with this case, and what effect any decision issued by the Supreme Court will have of PTSC claims...

Any opinions are welcome...

Gil...