Supreme Court Reverses Federal Circuit’s Ruling, Finds in Favor of Quanta in LG’s Computer Technology Patent Suit

Holding:

The U.S. Supreme Court reversed a judgment of the Court of Appeals for the Federal Circuit in an infringement suit involving respondent LG Electronics’ computer technology patents. Specifically, the Supreme Court held that first, method claims can be subject to patent exhaustion, and second, sales of products that do not fully practice the invention can still trigger exhaustion when the products include essential features of the patent and the “reasonable and intended use” of the product is to practice the patent. Here, LGE earlier licensed the patents to Intel with an authority to sell computer parts containing the patents. Intel then sold the products to petitioner Quanta, which would manufacture computers using these products in combination with non-Intel products. According to the Supreme Court, the authorized sale of an article that substantially embodies a patent exhausts the patent holder’s rights and prevents the patent holder from invoking patent law to control post-sale use of the article. Intel’s authorized sale to Quanta thus took its products outside the scope of the patent monopoly, and as a result, LGE can no longer assert its patent rights against Quanta.

Detailed Summary:

There were three patents at issue in this case, all of which referred to computer technology. The ’641 patent discloses a system for ensuring that the most current (computer) data are retrieved from main memory by monitoring data requests and updating the random access memory, also called the main memory, from the cache memory when stale data are requested.  Opinion, p. 2, citing LG Electronics, Inc. v. Bizcom Electronics, Inc., 453 F. 3d 1364, 1377 (CA Fed. 2006).

The ’379 patent relates to the coordination of requests to read from, and write to, main memory. Opinion, p. 2 citing id., at…

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