Opinion ID: 3178457
Heading Depth: 2
Heading Rank: 1

Heading: The Patent Exhaustion Doctrine

Text: “The longstanding doctrine of patent exhaustion provides that the initial authorized sale of a patented item terminates all patent rights to that item.” Quanta Computer, Inc. v. LG Elecs., Inc., 553 U.S. 617, 625 (2008). Exhaustion is a judicial construct grounded on “the theory that an unconditional sale of a patented device exhausts the patentee’s right to control the purchaser’s use of that item thereafter because the patentee has bargained for and received full value for the goods.” Keurig, Inc. v. Sturm Foods, Inc., 732 F.3d 1370, 1373 (Fed. Cir. 2013); see Adams v. Burke, 84 U.S. (17 Wall.) 453, 455 (1873) (“We have repeatedly held that where a person had purchased a patented machine of the patentee or his assignee, this purchase carried with it the right to the use of that machine so long as it was capable of use.”). It can be invoked as an affirmative defense to an infringement claim, “and like other issues in which there are no disputed factual questions, may be properly decided by summary judgment.” Keurig, 732 F.3d at 1373. On appeal, High Point challenges the district court’s exhaustion determination on several fronts. It asserts that sales of the accused infrastructure equipment were unauthorized because: (1) the MGWs T-Mobile purchased from Alcatel Marketing U.S. were not licensed because they were not the same “kind” of product that Alcatel sold when it entered into its 1996 cross-licensing agreement with AT&T (2) the Node Bs and RNCs T-Mobile pur- chased from Nokia Siemens Networks U.S. were not licensed products because the carrier division that Siemens divested in 2007 did not remain a “separately identifiable business”; and (3) LM Ericsson could not convey a retroactive sublicense to Ericsson U.S. because its right to grant sublicenses expired in 2011. High Point further contends that exhaustion does not apply because HIGH POINT SARL v. T-MOBILE USA, INC. 9 the articles sold under the purported licenses and sublicenses did not “substantially embody each and every invention claimed in the patents-in-suit.” Br. of PlaintiffAppellant at 44. We address each of these arguments in turn.