Applying Exhaustion To Combined Components

Law360, New York (February 17, 2010, 1:13 PM EST) -- Under the patent exhaustion doctrine, the unrestricted sale of a patented item exhausts the patent holder’s rights over that particular item. The patent holder therefore may not sue the purchaser or any downstream purchasers for patent infringement by that item.

In Quanta Computer Inc. v. LG Electronics Inc. (2008), the U.S. Supreme Court further held that the unrestricted sale of only one of several components used to practice a patent can also exhaust the patent, as long as that one component “substantially” embodies the patent....
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