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March 1, 2008

Pedaling Exhaustion

John Osborne at Morgan & Finnegan argues for reversal in his article: "Justice Breyer's Bicycle and the Ignored Elephant of Patent Exhaustion: An Avoidable Collision in Quanta v. LGE "-

The parties and amici in Quanta v. LGE have proposed either (1) eliminating any ability to restrict downstream use of a product made under a patent (Petitioners) or (2) allowing an essentially unfettered right to restrict a purchaser's use rights by contract (Respondent). Both approaches ignore the actual rights granted to a patentee by statute.

The arguments made to the Supreme Court in the Quanta v. LGE case essentially ignore the basis for both the patent exhaustion doctrine and the contributory infringement statute. Contributory infringement and exhaustion are opposite ends of the same principle. The contributory infringement statute is based on the precept that a recovery may be obtained for an unpatented component embodying the essential features of a patented system or method. The exhaustion doctrine is founded on the precept that the authorized transfer of the "essential features" of a patented invention results in exhaustion of system or method claims directed to the invention. Patent exhaustion is a limitation on statutory rights which cannot be expanded by contract.

Take yourself to opposite ends of the same principle: Osborne's article is a bit exhausting, but you will be contributing to your further understanding. Justice Breyer suggests: ride on.

Posted by Patent Hawk at March 1, 2008 6:26 PM | Exhaustion