Cascades Computer Innovation, LLC v. Samsung Elecs. Co., Nos. 11 C 4574 & 11 C 6235, Slip Op. (N.D. Ill. Sep. 14, 2014) (Kennelly, J.).

Judge Kennelly granted in part defendants Samsung’s and HTC’s motions for summary judgment of patent exhaustion based upon a prior settlement agreement that plaintiff Cascades Computer Innovation (“Cascades”) previously

John Marshall’s Summer 2008 edition of its Review of Intellectual Property Law is on bookshelves everywhere, plus it is online (click here for the table of contents of the current edition with links to pdfs of each article). Some of the highlights in:
The text of Chief Judge Michel’s address to the Federal Circuit Judicial Conference in which he discussed the state of the Circuit and asked Congress to add a fourth law clerk for each appellate judge to speed the Federal Circuit’s output;
An article by R. Mark Halligan arguing for the addition of a trade secret misappropriation cause of action to be added to the Economic Espionage Act of 1996; and
Hal Wegner’s discussion of the impact of the Supreme Court’s patent exhaustion decision in Quanta v. LG; and
Daniel Sullivan’s student arguing that an Article I patent tribunal should be created and that patents should know longer be subject to trial by jury.
Whether you agree or disagree with the authors, this edition has some provocative arguments.

Continue Reading Latest Edition of the John Marshall Review of Intellectual Property

Quanta Computer, Inc. v. LG Elecs., No. 06-937, 553 U.S. ___ (2008).
The Supreme Court concluded its latest review of the patent laws Monday when Justice Thomas delivered the Court’s succinct, unanimous decision in Quanta v. LG. Client obligations this week prevent me from providing a detailed analysis today. But, no surprise, there is plenty of commentary out there already. For more about decision, check out:
* 271 Patent Blog
* Agricultural Law
* FileWrapper
* IP Thinktank
* Patent Docs
* Patently-O
* WSJ Law Blog

Continue Reading Quanta v. LG: Patent Exhaustion

The Winter 2008 edition of the John Marshall Review of Intellectual Property Law has been published and is available online by clicking here. It includes several interesting articles, including:
An argument for making stage directions copyrightable, Jennifer J. Maxwell, Making a Federal Case for Copyrighting Stage Directions: Einhorn v. Mergatroyd Productions, 7 J. Marshall Rev. Intell. Prop. L. 393 (2008); and
John W. Osborne, Justice Breyer’s Bicycle and the Ignored Elephant of Patent Exhaustion: An Avoidable Collision in Quanta v. LGE, 7 J. Marshall Rev. Intell. Prop. L. 245 (2008), arguing that the Supreme Court should chart its own course regarding patent exhaustion, instead of adopting the parties’ positions in Quanta v. LG (click here for more on the case in the Blog’s archives):
The Federal Circuit held in LGE v. Bizcom that patent exhaustion could be disclaimed by contract. But patent exhaustion is reflective of the scope of patent rights granted by statute. A statutory grant of rights should not be expandable by private contract. The Supreme Court should thus reverse in Quanta v. LGE.
The confusion regarding patent exhaustion evident in the Federal Circuit’s LGE v. Bizcom decision can be entirely eliminated by strict adherence to the Supreme Court’s Univis Lens decision. Univis Lens makes clear that the sale of an article embodying the essential features of a patent claim results in the exhaustion of that claim.261 This conclusion applies equally to any type of patent claim, i.e., component, apparatus, composition, system, combination, method, or process claims. Identifying the essential features of a patent claim, i.e., the patentably distinct features, clarifies the exhaustion analysis, results in predictability, and eliminates the confusion between the doctrines of exhaustion and implied license.

Continue Reading Patent Exhaustion & Copyrighting Stage Directions

A handful of unrelated IP stories from Chicago, where most have been focused on snow & the primaries this week:
The Chicago Tribune reported — click here for the story — that a yearly $5,000 scholarship has been established in the name of Allen J. Hoover, a patent attorney at the law firm of Wood Phillips, who was killed in Wood Phillips’s offices in December 2006. The scholarship will be given to a third-year DePaul University law student focusing on intellectual property law. Hoover was a DePaul alum. At least some good can come from such senseless violence.
The University of Chicago Faculty Blog discussed patent exhaustion and the recent LG v. Quanta Supreme Court oral argument in this post, as part of an ongoing discussion about “New Servitudes” — licenses that attempt to control a purchaser’s rights in software, digital music, etc. (click here to read Professor Van Houweling’s initial post and click here to get the current version of her New Servitudes article at SSRN). Van Houweling’s analysis of the oral argument may not be as deep (note sarcasm) as my analysis of Justice Breyer’s cycling analogy, but it is quite interesting and she edges closer than most to predicting an outcome:

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The blogs are full of commentary about yesterday’s Supreme Court patent exhaustion argument. But no one is declaring a winner. Instead, like my earlier post, people are focusing on trends in the Justices questions. Here are some of the best commentaries:
Amster, Rothstein & Ebenstein has a guest post all over the blogs — read it at Patently-O, 271 Patent Blog, and Philip Brooks’ Patent Infringement Updates.
Anticipate This!
I/P Updates — quoting Chief Judge Roberts: “We’ve had experience with the Patent Office where it tends to grant patents a lot more liberally than we would enforce under the patent law.” Ouch.
ScotusWiki — This is a companion to the well-known SCOTUSblog (which does not have any commentary about the argument posted yet). ScotusWiki does not provide any commentary, but it is a great resource for information about this case, and any other Supreme Court case.
Troll Tracker — predicting a 5-4 or 6-3 reversal of the Federal Circuit (although only “leaning” that way and only predicting a “slight” reversal) and, similar to my post, picking up on Justice Breyer’s cycling theme, but without professing a love for the sport.

Continue Reading Quanta v. LG: Commentary Roundup

Tomorrow, the Supreme Court hears arguments in Quanta Computer Inc. v. LG Electronics Inc., 06-937 — click here for a collection of the many briefs filed in the case at Patently-O. The Court will be deciding whether parties can contract around patent exhaustion. The patent exhaustion doctrine, also known as the first sale doctrine, holds that a royalty can only be charged once per product. Once one link in the supply chain has paid a royalty for a patented product, or a key component, the patent is exhausted and no other link in the chain must pay a royalty for the same patent. LG Electronics attempted to contract around patent exhaustion.
LG Electronics owned a group of patents claiming microprocessors used in personal computers. They licensed the patents to Intel, but expressly excluded from the license any Intel customer that combined a licensed Intel microprocessor with non-Intel components. As part of the license, Intel sent letters to its customers warning of this license exclusion. LG Electronics sued Intel’s post-license customers that were allegedly combining the licensed Intel chips with non-Intel products.
The district court held that Intel’s license exhausted LG Electronics’ downstream patent royalty rights. But the Federal Circuit reversed, holding that when parties expressly restrict a license a court should infer that the parties also negotiated a more limited royalty to reflect the limited rights given in the license. As a result, patent exhaustion should not apply to restricted licenses. Quanta argues that the Federal Circuit’s decision contradicts a long history of both Federal Circuit and Supreme Court precedent requiring that patent licenses cannot be restricted to one link in the supply chain.
This is another case that has major implications for the business of patent law. If the Supreme Court overturns the Federal Circuit it could dramatically change the model of many patent licensing programs. I will keep you posted both on what occurs during the argument and the Court’s ultimate decision.

Continue Reading Supreme Court Hears Patent Exhaustion Case Tomorrow

Many — myself included — thought the Supreme Court may have had its fill of patent law. But yesterday, the Supreme Court granted cert in Quanta Computer Inc. v. LG Electronics Inc., 06-937, to consider whether parties can contract around patent exhaustion. The patent exhaustion doctrine, also known as the first sale doctrine, holds that a royalty can only be charged once per product. Once one link in the supply chain has paid a royalty for a patented product, or a key component, the patent is exhausted and no other link in the chain must pay a royalty for the same patent. LG Electronics attempted to contract around patent exhaustion.
LG Electronics owned a group of patents claiming microprocessors used in personal computers. They licensed the patents to Intel, but expressly excluded from the license any Intel customer that combined a licensed Intel microprocessor with non-Intel components. As part of the license, Intel sent letters to its customers warning of this license exclusion. LG Electronics sued Intel’s post-license customers that were allegedly combining the licensed Intel chips with non-Intel products.
The district court held that Intel’s license exhausted LG Electronics’ downstream patent royalty rights. But the Federal Circuit reversed, holding that when parties expressly restrict a license a court should infer that the parties also negotiated a more limited royalty to reflect the limited rights given in the license. As a result, patent exhaustion should not apply to restricted licenses. Quanta argues that the Federal Circuit’s decision contradicts a long history of both Federal Circuit and Supreme Court precedent requiring that patent licenses cannot be restricted to one link in the supply chain.
This is another case that has major implications for the business of patent law. If the Supreme Court overturns the Federal Circuit it could dramatically change the model of many patent licensing programs.
For more about the Supreme Court’s decision to grant cert, check out:
Patently-O
271 Patent Blog
Patent Troll Tracker
FileWrapper

Continue Reading Supreme Court to Tackle Patent Exhaustion