Exhausted patents (II), Quanta v LG at the US Supreme Court
The US Supreme Court has finally ruled on the much-awaited Quanta v LG decision. (See our earlier post for details.)
Here are some key points:
(1) Method claims can be subject to patent exhaustion;
(2) Sales of products that that do not fully practice an 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 to patent.
(3) The sale of a device that practices patent A does not, by virtue of practicing patent A, exhaust patent B. But if the device practices patent A while substantially embodying patent B, its relationship to patent A does not prevent exhaustion of patent B.
The Court focussed on and referred to the specific facts of this case and so some commentators are summising that its application will be narrow. Other commentators are saying that there is still room to carefully craft licence agreements to avoid exhaustion and have rightly ntoed that the contractual side of the equation was not ruled on by the Supreme Court.
While item (1), above seems to be clear-cut, at least from the international perspective, (2) and (3) are quite interesting. Under this ruling, the Exhaustion principle applies to products and methods that only substantially embody a patent claim. Given that it is possible to ‘non-literally infringe’ a patent, (in the US, under the doctrine of equivalents), this makes sense to me. What do you think?