Posts Tagged “end user infringement”

If you are like me and maybe 28, 999,999 other US sports fans, you probably were watching the men’s marathon the other night from Beijing. Through the miracle of HDTV you could see the look of exhaustion on the faces of all but the very top finishers. Like most of the runners, patents get exhausted too.

Just as a runner’s legs get exhausted when their owner tries to push them too far, so too a patent is exhausted when the owner tries to claim rights beyond the first sale of the patented invention. In a June 2008 decision, the Supreme Court extended this concept even further, explicitly extending it to methods claims as well as apparatus claims.

The basic concept of patent exhaustion is straight forward; if you, the patent owner, authorize the sale of a product incorporating your patented invention, you no longer have control of the further use or sale of that product. While there are complicating details, the logic of the doctrine is clear; once you’ve gain the benefit of your patent “monopoly” by selling the patented product you’re not allowed to double-dip by, for example, collecting another royalty when your customer resells your product as part of his product.

The particular case involved LG Electronics patents that had been licensed to Intel, who in turn made chipsets that were sold to Quanta Computer. LG had stipulated in its license to Intel that the chipsets were NOT to be combined with non-Intel parts and required Intel to inform chipset buyers of that requirement, which they did. However, LG did not require Intel to explicitly license each purchase with that restriction.

When Quanta combined the Intel chipsets with non-Intel parts, LG sued Quanta. The case progressed through both district court and the CAFC, ending up in the Supreme Court. That Court decided that, by virtue of its license to Intel, LG had authorized the sale of the chipsets to Quanta and that the principle of patent exhaustion applied to both the apparatus and the methods claims in LG’s patents. That the lower courts had felt the principle did NOT apply to the methods claims is hard to understand; however, the Supreme Court has now said explicitly that it does apply.

So if your goal is to have your patent go the extra mile for you, you will have to write explicit licenses to cover your expectations covering the secondary sales and uses of your patent, both apparatus claims and method claims.

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I was watching a re-run of an old Julia Child show the other day, the one where she demonstrated a method of opening oysters using the pointed end of a “church key” can opener, when it struck me that perhaps Julia should have filed a patent application for “A method of accessing Crassostrea virginica” before taping the show. Then she could have sued any of us who didn’t buy her cookbook!

I was prompted to these thoughts by a patent I read last week. The only independent claim was for a method for performing a particular medical procedure (tracheal intubation). The related apparatus claims had been rejected so the medical device manufacturer was effectively making its potential customers – the doctors who perform this procedure – infringers, hoping to scare off other device manufacturers who could be sued as inducing infringement with their competing apparatuses.

This patent raised two questions in my mind; first, in the global sense, is this type of end-user-method what the Constitution’s framers envisioned as a discovery whose protection would “promote science and the useful arts” and, second, in the narrow sense, is it a good idea to make your customers infringers if they prefer someone else’s product over your (unpatentable) product?

Answering the second question, I think not. Any short term gains you might achieve are likely to create hard feelings in the long run and predispose your customers to buy other products from your competitors. In the particular situation I was looking at, the un-patentable apparatus has non-infringing uses so the competitors can and will be selling the apparatus to doctors quite innocently. Just like Julia’s church key.

The competitors will not have to induce infringement since the doctors are going to figure it out all by themselves. How? Any advertising by the patent holder to sell its apparatus to perform the patented method will inherently make it clear that anybody’s apparatus will work just fine. The competitors don’t have to say a word.

So having spent thousands of dollars for this patent (they seemed to have dropped their European applications after the search report found “no inventive step” for either the apparatus or the method) the patent holder now only has its customers to sue for infringement – something I assume neither they nor Julia would be silly enough to do.



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