Monday 1 September 2008

US Supreme Court ruling on exhaustion worries lots of people

An article, "US Supreme Court decision on patent exhaustion worries TTOs", appears in the August issue of the subscription-only journal Technology Transfer Tactics. It discusses the US Supreme Court decision on patent exhaustion in June in Quanta Computers, Inc. v LG Electronics, Inc. The court ruled, in essence, that the application of the doctrine of patent exhaustion meant that LG could not control the downstream use of technology that it had licensed to Intel. That technology was used in Intel chips that were later sold to Quanta and other computer manufacturers. The decision means that LG cannot seek royalty payments from Quanta or other computer makers that purchased components produced by Intel under its licensing agreement with LG. Experts agree that this decision, while not in fact earth-shattering, underscores the need for strategic thinking when formulating licensing strategy and deciding how to implement it.

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