While I may be a "contracts guy", this is a somewhat complex issue - and that's why it has risen to the Supreme Court. But I'll offer a couple of thoughts.

First, Quanta & company address this issue - the first sale doctrine - as if it were a "given" with regard to patents. If this were true, there would never be a need to include a "Patent Indemnification Clause" in any sales contract, period. It would be pointless. But the fact of the matter is that the use of this clause is very widespread. I'll remind everyone that per US Gov't procurement regualtions, every contract issued by the US Gov't must include a Patent Indemnification Clause (though there are ways to get waivers around the requirement, just as there are ways around every procurement regulation requirement). That's the US Gov't - DoD, DoE, DoT, NASA - ALL. I'll also remind that such clause was the reason for ARM getting involved in our dispute with the Js. In other words, the Quanta & company position is not nearly as strong, IMO, as they suggest. It's always been a "omit the clause at your own risk" proposition, just like omitting a spec regarding the intended quality of the product.

Second, should Quanta & company prevail in this dispute, and the Supreme Court rule in their favor, Intel had better duck and run, IMO. When Intel licensed the tech from LG, that language was included in the license - the license is limited to Intel and not Intel's customers. Inclusion of that language in the license specifies the agree INTENT of the parties to the contract/Licensing Agreement. If this intent is in effect nullified by an adverse Supreme Court decision, I believe it could be effectively argued that the license is void. And any other similarly-worded licensing agreement out there would likewise become void. The INTENT was clear. If the intent cannot be satisfied, for whatever reason, there (IMO) is no contract.

And, IMO, while Intel may have to "duck and run" in the near term, you can bet that they will adjust the cost of their product across the board to "make up" for the shortfall in prior product price to cover the new found greater expense of the new license they'll need to negotiate with LG. Ultimately, the monies will be paid - just as others have suggested. It's just that the monies will be paid up front by the initial licensee, rather than piecemeal by each and every licensee - initial and downstream.

So, based on the "contracts guy" view, if Quanta and company prevail, watch for LG to sue Intel for patent infringement, as their present license/contract, IMO, will no longer exist. The INTENT of the contract will be "violated".

And IMO Quanta and company will ultimately learn all about another basic principle of economics - TANSTAAFL: "There Ain't No Such Thing As A Free Lunch".

JMHOs,

SGE

PS: I recall telling my Dad about TANSTAAFL while in college. He said something like "What the hell are they teaching you?". While he understood the principle, he couldn't get past the "There ain't no such thing.."!