Abstract :
Technology manufacturers will be breathing a sigh of relief following a recent ruling by the US Supreme Court which can only be described as common sense. The ruling rejected a claim by LG Electronics that it should retain the rights to patent protection after licensing its technology to a third party, Intel. LG Electronics claimed that its rights were infringed when Quanta Computer used the Intel technology in the production of a laptop computer, despite the fact that Intel had paid for the original technology fairly and squarely. This ruling upholds an established intellectual property principle from the 1800s the principle that rights previously held on a product are exhausted at the point of sale. In short, LG Electronics didn´t have a leg to stand on, according to the accepted tenet of intellectual property law. The only surprise, if there is one, is that the case reached the point of appeal in the first place. In fact, the claim was based on a number of issues, one of which centred on who was the first user. Imagine, for example, a car manufacturer selling a vehicle containing an innovative technology, to a distributor. The distributor then sells the car on. The claim in this case was that the car maker should retain the right to claim that the new owner is a ´primary infringer´ of the technology, because they use it first. You would be right in thinking that such a claim would be ill-judged and could be viewed as an unreasonable attempt by the manufacturer to exploit their monopoly rights at the expense of the marketplace they are serving.
