Quanta Discussion Board: Ducking the Issue?

The following is part of a Discussion Board about yesterday’s decision in Quanta v. LG. Chapman University School of Law professor Lawrence Rosenthal offers this post. He filed an amicus brief in support of the respondent, on behalf of Papst Licensing GMBH & Co. KG.

I quite agree with Fred von Lohmann’s perceptive post. For most of the amici, including my client, this case mattered because it seemed to present the question whether the parties to a licensing agrement can preserve infringement remedies as a means of policing restrictions on the use of the patented product. This issue has enormous practical significance since contractual remedies are limited by privity and therefore may be far less effective as a means of policing a licensing agreement than an infringement remedy that is available against anyone making an unauthorized use of the patented product. Yet the Court ducked the issue, essentially taking it as uncontested that there was no breach of the licensing agreement.

The Court’s ability to duck what seemed to be the most important question in the case was in large part a product of the respondent’s litigating strategy. Unlike most of the amici on both sides of the case, LG focused on the question whether the doctrine of patent exhaustion applied to method patents. From my point of view, that was a curious tactic. LG’s position seems manifestly inconsistent with any number of precedents and did not seem to me (something of a patent novice but rather experienced as an appellate litigator) to make very much sense. Judging from the Court’s opinion, my reaction was not atypical. The good news, at least from my client’s perspective, is that the Court’s opinion contains nothing to suggest that the use of a patented product in violation of a licensing agreement is immune from infringement liability.