The U.S. Supreme Court likely will weaken patent holders’ ability...
The U.S. Supreme Court likely will weaken patent holders’ ability to sue companies downstream of patent licensees for infringement, while preserving a patent owner’s ability to “contract around” the doctrine by writing limits into license agreements, Stifel Nicolaus said…
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in a note. In Wednesday Supreme Court oral argument for LG v. Quanta, Chief Judge John Roberts and Justices Antonin Scalia and Stephen Breyer “were skeptical of LG’s arguments that it should be able to recover” royalties from Quanta, which buys Intel chips using licensed LG patents, the analyst firm said. “We expect, consistent with the pattern in recent Supreme Court patent decisions, that the Court will cut back on the Federal Circuit’s grant of authority to LG to assert its patent against Quanta,” it said. However, the court will let patent holders limit licenses so they can get royalties or damages from the end buyer, the analyst firm predicted. The case has drawn the interest of major semiconductor, computer and Internet firms. Cisco, IBM, Dell, Hewlett-Packard and eBay say the first buyer of the patent technology should pay full royalty and pass the cost to its customers. Qualcomm and Yahoo support LG. A Qualcomm filing said the changes Quanta seeks could “affect significantly and fundamentally the foundations of Qualcomm’s businesses (and those of other high technology companies).” An opinion is expected by the end of June, Stifel Nicolaus said.