Patent law used to hold that patent rights expired upon first sale of the patented product. The patent holder could put restrictions on the patent licensee, for example licensee was only good in a limited area. But, after the licensee sold the product, the buyer could do anything he pleased. In the case of area restriction (e.g licensee is only good for sales within 10 miles of Boston), a buyer of the patented product could resell it anywhere he pleased. In short, patent owners rights to control the product end when the product is sold. I can buy a patented product and then do anything I please with it. The patent holder cannot tell me that the product may only by used on alternate Tuesdays, or under water, or anything. I have bought the product and that makes it mine. Patent holders rights have been "exhausted" to use lawyer jargon.
Seems like Korean chip maker Lucky Goldstar licensed Intel to use some LG technology but with some restrictions. Intel sold product containing the LG licensed technology to customers, and said customers failed to comply with LG's restrictions. LG sued Intel's customers.
LG lost in district court. Judge held that LG's rights had been exhausted upon first sale by Intel. LG lawyers appealed and won. Case is now on the way to the Supreme Court. LG vs Quanta.
Let us hope LG looses. Other wise patent holders could say things like "You may not watch Fox News on your TV because we hold patents on your TV's electronics and that gives us legal control of your TV." Let us hope the nine dumb-as-rocks-lawyers on the Supreme Court can get this one right.
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