Find Court Cases > Quanta Computer, Inc., et al. v. LG Electronics, Inc.

Quanta Computer, Inc., et al. v. LG Electronics, Inc.

Case Date: 01/16/2008
Docket No: none

Facts of the Case 

LG Electronics owned patents for a group of products, including microprocessor chips used in personal computers. It licensed the patents to Intel, but in a well-publicized separate agreement excluded from the license any Intel customer that integrated the chip with non-Intel components. One purchaser disregarded the agreement and used the chips in computers made for Dell, Hewlett-Packard and Gateway. LG Electronics sued those who passed the chips down the line of commerce to companies that had not purchased licenses.

Read the Briefs for this Case
  • Brief Amicus Curiae of the American Seed Trade Association In Support of Neither Party
  • Brief Amici Curiae of Consumers U Nion (cu), Electronic Frontier Foundation (eff), And Public K Nowledge I N Support of the Petitioner
  • Brief Amici Curiae of Automotive Engine Rebuilders Association, Automotive Parts Remanufacturers Association, And International Imaging Technology Council In Support of the Petitioners
    • Question 

    May a patent holder seek royalties from companies other than its direct purchaser as the patented product is integrated into larger components during the manufacturing process?

    Argument Quanta Computer, Inc., et al. v. LG Electronics, Inc. - Oral ArgumentFull Transcript Text  Download MP3Quanta Computer, Inc., et al. v. LG Electronics, Inc. - Opinion Announcement  Download MP3 Conclusion  Decision: 9 votes for Quanta Computer, Inc., et al., 0 vote(s) against Legal provision:

    The Court concluded unanimously that it could not. Writing for the Court, Justice Clarence Thomas relied on the theory of "patent exhaustion," which provides that a patented item's initial authorized sale terminates all patent rights to that item, denying LGE royalties from companies down the line of commerce.