Patent Law

Today's guest post is from John W. Osborne of Morgan & Finnegan, L.L.P.:

As discussed in the linked article, "Justice Breyer's Bicycle and the Ignored Elephant of Patent Exhaustion: An Avoidable Collision in Quanta v. LGE," 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.  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.  Under the developed caselaw, essential features are patentably distinctive features, i.e., the features which distinguish over the prior art.  Likewise, 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 developed caselaw and legislative history are clear that the statute applies only to components which contain the essential features of the system or method claims and that those features are the patentably distinctive features of the claims.  Indeed, patent exhaustion and contributory infringement are opposite ends of the same principle and that principle is squarely applicable to the facts of Quanta v. LGE.  Reversal is compelled in Quanta v. LGE, but the holding should not be broadly applicable to components which do not contributorily infringe or which are otherwise unlicensed.

The article will be officially published by The John Marshall Review of Intellectual Property Law in mid-March.