Breyer Uses Bike Hypo to Oppose Backpedaling on Patent Doctrine
Several U.S. Supreme Court justices appear ready to limit patent holders’ ability to demand license fees from multiple companies in a manufacturing process.
Stephen G. Breyer was among the justices who appeared to favor limiting patent rights, the Associated Press reports. He suggested during oral arguments yesterday that an electronics company that licensed its products to Intel was not entitled to royalties from computer makers that purchased Intel products using the patented technology.
The case involves a dispute between patent holder LG Electronics, which licensed several of its technology patents to Intel, and Quanta Computer, which uses patented chips sold by Intel. Quanta contends LG has no patent rights against downstream purchasers under the doctrine of patent exhaustion.
Addressing the lawyer for LG Electronics, Breyer said, “All that we would do by finding in your favor is destroy the patent exhaustion doctrine.” He used a hypothetical involving the purchase of bicycle pedals to support his point, Law.com reports.
“These are fabulous pedals. The inventor has licensed somebody to make them, and he sold them to the shop,” he said. “I start pedaling down the road. Now, we don’t want 19 patent inspectors chasing me.”
A Wall Street Journal preview of the case (sub. req.) said the Supreme Court in recent years has thrown out rigid rules favoring patent owners, giving accused infringers less incentive to settle. The ABA Journal came to a similar conclusion in a December article. It noted the U.S. Court of Appeals for the Federal Circuit issued three rulings this summer that had experts wondering if it also is becoming less protective of patent rights.
