A Return To Traditional Principles Of Patent Exhaustion

Law360, New York (June 13, 2008, 12:00 AM EDT) -- The Supreme Court recently issued a unanimous opinion on the scope of the patent exhaustion doctrine in Quanta Computer Inc. v. LG Electronics, Inc. The case has broad implications on licenses in a number of different fields.

Under Quanta, a patentee cannot impose downstream use or sale restrictions on a third party that are not also imposed on its licensee who sells to the third party.

Quanta holds that “[t]he authorized sale of an article that substantially embodies a patent exhausts the patent holder’s rights and...
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