edf40wrjww2CF_PaperMaster:Desc
The US Supreme court recently agreed to review a case involving patent protection and collection of license fees for use of patented technology (case No. 06-937). At issue is whether LG Electronics Inc. can charge computer manufacturers licensing fees for use of its technology used in chips even though the chip maker (Intel Inc.) already paid licensing fees to make the chips. The original case was filed in the US District Court for Northern California by LG Electronics, Inc. against a group of Taiwanese computer manufacturers led by Quanta Computers Inc. in 2000. In 2002 the District Court granted summary judgment against LG saying its patent rights had been exhausted due to their agreement with Intel. LG appealed the ruling to the US Court of Appeals and in 2006 the court overturned the lower court’s decision. The manufacturers appealed that decision to the US Supreme Court.
The case centers around five US patents relating to personal computers owned by LG Electronics Inc. and LG’s claim to licensing fees for their use. LG licensed their technology to Intel Inc. for use in its microprocessors and chipsets. Intel then sold these chips to computer manufacturers, including Quanta, for use in their computers. The LG-Intel license agreement states there is no implied license to purchasers of Intel’s products if the chips are used in a computer in conjunction with non-Intel products. Intel informed the defendants of this prior to entering into the agreement with LG. LG contends that the computer manufacturers must now pay licensing fees to use their intellectual property. Quanta, et al. contend that since LG licensed the rights ...