After being invited by the Court, the Solicitor General has filed an amicus brief in Quanta Computers v. LG Electronics. The Court requested the opinion of the US in the cert. stage of this case on April 16, 2007 and the Solictor General filed his brief on August 24, 2007. Also of note, Dell, Inc. has filed an amicus brief in this case.
The case revolves around the decision of Quanta Electronics, a Taiwanese technology company, to incorporate chips that they purchased from Intel into computers they made for companies like HP and Dell. LG Electronics had licensed patented technology to Intel and they are claiming royalties from Quanta for their use of patented technology.
The Solicitor General has asked the court to accept the case on review from from Court of Appeals for the Federal Circuit. The Federal Circuit held that LG did have the right to collect loyalties from a company that was using its technology during the use of a broader unit. At the cert. stage of a case, the Court is simply evaluating whether or not to accept the case. The Court will hear a bulk of the arguments during the merits stage if the case is accepted.
In Quanta, the Court is asked to decided whether or not a patentee’s rights are being violated when the maker of one component in a patented device decides to sell that component separately. In slightly more verbose terms, the issues is:
Whether a patentee’s federal patent rights are exhausted by a licensee’s authorized sale of an essential component that has no reasonable use other than in practicing the patented invention, when the patentee has purported to retain in its licensing agreement the right to pursue patent infringement claims against those who purchase the component from the licensee and use it for its only reasonable use.
The Associated Press frames the debate another way:
The Taiwanese firms argued in court filings that after LG had licensed patents to Intel, patent infringement couldn’t be claimed if Intel customers were using the product as originally intended.
LG Electronics, however, responded that it had licensed its patents to Intel in 2000 on the condition that the chips not be combined with non-Intel components in a way that infringed the patents, according to LG’s court filings.
I’d say there is a good chance that the Court will accept this case. In OT2006, the court accepted an unusually high number of patent cases and reigned in the power of the Federal Circuit on each.