Saturday, January 06, 2007

Licensed component requires patent exhaustion or implied license for the combination?

Note - I received this e-mail from JH Kim, a patent lawyer of my former company. This is his material, not mine. I just translated his e-mail into English.

Question) Company A has a patent about Baseband modem chip and another patent that has the same elements as previous one and an additional element of antenna. The latter patent claims cellular phones. Company A gave a license of the first patent to licensees, but it did not give a license of the second patent to licensees. Then, company A can claim royalty of the second patent against licensees?



Answer) Probably not. Because baseband chip is only used for cellular phone. Implied license and patent exhaustion may apply, unless an express disclaimer exists. See LG Electronicsm, Inc. v. Bizxom electronics, Inc., 453 F.3f 1354 (Fed. Cir. 2006)

LG Electronicsm, Inc. v. Bizxom electronics, Inc., 453 F.3f 1354.

* “To prevail, defendants were required to establish that the products have no noninfringing uses and that the circumstances of the sale ··· ‘plainly indicate that the grant of a license should be inferred.’ . . . Regardless of any noninfringing uses, Intel expressly informed them that Intel's license agreement with LGE did not extend to any of defendants' products made by combining an Intel product with non-Intel products. In light of this express disclaimer, no license can be implied.”

* “This exhaustion doctrine, however, does not apply to an expressly conditional sale or license.”

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