Docket No. 2014-1196, -1197, -1198, -1199, -1200
NEWMAN(D), CLEVENGER, DYK
February 10, 2015
Brief Summary: DC decision of patent exhaustion against patentee with respect to content providers using equipment licensed to handset providers reversed as the patent rights because “infringement of the content claims has not been asserted or shown to require that handset acquirers are practicing those claims” (a patentee owning multiple patents coverning complementary goods produced by different producers has the freedom to negotiate different licenses).
Summary: Helferich sued the defendants (all content providers) alleging infringement of various claims of seven of its patents related to systems and methods for providing information to wireless devices. The DC granted SJ of non-infringment to the defendants under the doctrine of patent exhaustion, finding that “by granting handset manufacturers patent licenses conferring broad authority to sell the handsets, Helferich has exhausted its ability to enforce its patents not only against acquirers of the handsets but also against the defendant content providers who use presumptively distinct inventiosn to manage content and deliver it to handset users.” The FC panel reversed, “concluding that patent exhaustion has not reached that far and should not be newly extended to do so in these cases.” The claims asserted in this case are directed to storing and updating information and are referred to as “content claims” (“content providers, not possessors of handsets” practice these claims). The FC opinion explains that the licenses granted to the handset makers “generally reflect painstaking efforts to distinguish the conduct of handset makers and possessors from the conduct of others, such as content providers” and “generally disclaim any grant of rights to such content providers and reserve Helferich’s enforcement rights against them.” The content providers therefore rely only on patent exhaustion as a defense and not on a claim of implied license. The FC opinion framed this situation as one in which a single inventor came “up with two inventions presumed to be separately patentable, one invention to be practiced by one group of users, the other invention by another group, where each invention tends to make the other more useful when thus separately practiced.” And it concluded that “the exhaustion doctrine’s lifting of patent law restrictions on a licensed product has never been applied to terminate patent rights in such complementary activities or goods in these circumstances” (“infringement of the content claims has not been asserted or shown to require that handset acquirers are practicing those claims…Within the boundaries of the current doctrine of exhaustion, a patentee owning multiple patents coverning complementary goods produced by different producers has the freedom to negotiate different licenses, subject to all the complexities and variations of market forces and existing institutional structures.”; citing Quanta, US 2008, among other USSC and FC cases). Thus, the DC decision was reversed.