Patent Law | Expert Legal Commentary
August 15, 2008
Quanta Computer v. LG Electronics: Reviving Exhaustion, Applying It to Method Patents
Quanta Computer v. LG Electronics
By
John R. Carr
In the case Quanta Computer v. LG Electronics, ___ U.S. ____, 128 S.Ct. 2109 (2008), the United States Supreme Court clarifies and expands upon its holding in United States v. Univis Lens Co. In Univis, the court held that a patent is exhausted upon the sale of unfinished components that substantially embody the patent and which have no use except to practice the patent. In Quanta, the court clarified that the same analysis applies to process or method patents, not just product patents: When a component substantially embodies the process and cannot be used for any purpose other than to practice the patent, the process patent is exhausted upon sale of that component. The decision makes it more difficult for patentees to extract royalties from multiple parties for the same device. However, it revitalizes the integrity of the exhaustion doctrine and provides more certainty for downstream purchasers.
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1 LG Electronics, Inc. v. Bizcom Electronics Inc., 453 F.3d 1364, 1369-1370 (Fed. Cir. 2006).
2 See, e.g., Glass Equipment Devel. Inc. v. Besten Inc., 174 F.3d 1337, 1341, n.1 (Fed. Cir. 1999).
