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Message: Quanta - LG arguments

Quanta - LG arguments

posted on Jun 09, 2008 11:36AM

This will still be a very complicated to matter to unravel. LG had restrictions on Intels license.





JUSTICE STEVENS: Was the license unrestricted? That's one of the reasons I asked the question. Wasn't there a use restriction on the resale?

MS. MAHONEY: Well, there was -- what there was, the sale was authorized. The sale was authorized. What -

JUSTICE STEVENS: On the condition that it be sold to someone who would not use it on non-Intel products.

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MS. MAHONEY: I don't think that's what the lower courts found and I don't think that's what the argument has ever been, Your Honor. I think this is just like Bobbs-Merrill. There is a -- this Court has recognized that there is a difference between actually conditioning the seller's authority to sell to someone who's going to use it for some prohibited purpose, and that would be a case like General Talking Pictures, where it says, you do not have authority to sell to someone who's going to use it for the home market. But Bobbs-Merrill says if what you do instead -- it was a copyright case that was applied in Motion Picture Patents. If what you do instead is you give them authority to sell, you don't say you'll be in breach if you sell it to somebody who's going to sell books at below the retail price I've specified, if instead what you do is say, you have to agree you'll give them notice that the -- that the owner of the invention, or in that case the copyright, is not agreeing to your use of these books or sale of these books at below a certain price, that doesn't count. There's still an authorized sale, that when -- that you can't -- that the patent owner can't try to retain part of the monopoly right to sell.

CHIEF JUSTICE ROBERTS: Well, if that's true then this case really isn't a big deal at all. It just

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depends on exactly how you word the contract when the patentee sells it to a purchaser. You can word it -- in other words, you can word it in such a way that the patentee's rights extend further downstream and you're saying all this case turns on is whether the wording here was correct or not.

MS. MAHONEY: Well, the wording hasn't been in dispute, but a lot of important things turn on it, because of course if Intel didn't have the authority to make these sales, it would be liable for contributory infringement. And undoubtedly when Intel decided how much to pay for this license it cared deeply about whether it was going to be exposed to that liability.

CHIEF JUSTICE ROBERTS: Well, I understand your position to -- to acknowledge that they could have structured the sale to Intel in such a way as to achieve the same result that you're saying is so bad under the patent laws.

MS. MAHONEY: I don't think so, Your Honor. Once they have an authorized sale, then the results are different, because if there has been an authorized sale .......

http://www.supremecourtus.gov/oral_a...



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