Patent Baristas

The Federalist Society has a new patent law podcast posted on the Quanta Computer v. LG Electronics case before the Supreme Court and its impact on patent licensing.   In Quanta, the Supreme Court is being asked whether the Federal Circuit erred by holding, in conflict with decisions of this Court and other courts of appeals, that respondent’s patent rights were not exhausted by its license agreement with Intel Corporation, and Intel’s subsequent sale of product under the license to petitioners.

Quanta: Patent Rights in the Supreme Court 9-30-09 – MP3
Running Time: 01:40:52

To listen, please right click on the audio file you wish to hear and then select “Save Link As…” or “Save Target As…”  After their opening remarks, the panelists engage in a vigorous exchange of ideas about exhaustion doctrine and patent licensing.

In the case, LG Electronics owned a patent for a microprocessor chip, which it licensed to Intel, but excluded from the licensing agreement any Intel customer that used the chip with non-Intel products.  One third-party purchaser integrated the chip with Dell, HP and Gateway products.

In this U.S. Supreme Court case, the Court was asked whether a patent holder can seek royalties from the downstream third-party purchaser.  The Court concluded unanimously that it could not. Writing for the Court, Justice Clarence Thomas relied on the theory of “patent exhaustion,” which provides that a patented item’s initial authorized sale terminates all patent rights to that item, denying LGE royalties from companies down the line of commerce.  The panel of experts discuss the decision, and the implications of the decision for patent law and  licensing agreements.

Featuring:

• Prof. Richard A. Epstein, University of Chicago Law School
• Prof.  Scott Kieff, The George Washington University Law School
• Prof. Mark Lemley, Stanford University Law School
• Mr. Fred von Lohmann, Electronic Frontier Foundation
• Moderator: Prof. Adam Mossoff, George Mason University School of Law