Quanta Computer v. LG Electronics

IP License Strategies after Court's Unanimous Ruling on Patent Exhaustion

Recording of a 90-minute premium CLE webinar with Q&A

Conducted on Wednesday, July 16, 2008

Course Materials


On June 9, in Quanta Computer Inc. v. LG Electronics Inc., the U.S. Supreme Court once again reversed the Federal Circuit on an issue involving patent owners' rights, continuing the Court's recent inclination toward limiting the scope of patent rights.

The Court's ruling firmly rejected the Federal Circuit’s departure from the doctrine of patent exhaustion enunciated almost 150 years ago: that the authorized sale or disposition of a patented article exhausts a patent owner's right to that article and such exhaustion cannot be "contracted around."

The Court further reversed the Federal Circuit in ruling that the patent exhaustion doctrine does apply to method claims. The Court also discussed "reasonable use" of a patented product and "essential features" of a patent claim, both highly relevant issues in exhaustion arguments.

Listen as our authoritative panel of IP attorneys provides an overview and analysis of the Court's decision from both the patent owner and licensor's perspective, including the likely impact of Quanta on future IP licensing arrangements. The panel will provide their perspectives on how IP owners and licensors can protect their rights through patent, as well as contract, law.



  1. Patent exhaustion
    1. Brief review of past Supreme Court precedent
    2. Federal Circuit departure from Supreme Court in recent years
  2. Quanta Computer Inc. v. LG Electronics Inc.
    1. Brief overview of facts
    2. Lower court rulings
    3. Supreme Court ruling
  3. The impact
    1. On existing licensing agreements
    2. Recourse for companies that paid royalties?
    3. Patent exhaustion for downstream transactions
    4. Patents for methods or processes — what does the ruling mean for them? Does it give a picture of what the future may hold?
    5. What issues of patent exhaustion remain open after Quanta?
  4. Where do we go from here?
    1. How should those entering licensing agreements adjust their strategy?
    2. What should existing patent holders do?
    3. How can IP owners and licensors protect their rights through patent law?
    4. How can IP owners and licensors protect their rights through contract law?


The panel reviewed these and other key questions: 

  • What methods remain available to patent owners to enforce their patents against downstream purchasers and users?
  • Although patent exhaustion can't be "contracted around," are remedies available to patentees under conditional licenses or other contract law theories?
  • What are the best practices for patent owners and licensees to ensure that current and future licensing arrangements incorporate the lessons of Quanta?


Allen E. Hoover
Allen E. Hoover
Banner & Witcoff

He has substantial experience in intellectual property law. His licensing experience includes negotiations, transaction...  |  Read More

Patricia A. Millett
Patricia A. Millett
Akin Gump Strauss Hauer & Feld

She co-heads the firm's Supreme Court Practice and has argued 26 cases before the U.S. Supreme Court. She filed a brief...  |  Read More

Richard P. Gilly
Richard P. Gilly
Winston & Strawn

He focuses his practice in intellectual property counseling and litigation. He drafts and negotiates IP licenses and...  |  Read More

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