Quanta Computer, Inc. v. LG Electronics, Inc.: Supreme Court Clarifies that Patent Exhaustion Applies to Method Patents

September 25, 2008 Published Work

On June 9, 2008, the United States Supreme Court ruled in Quanta Computer, Inc. v. LG Electronics, Inc. that the doctrine of patent exhaustion applies to method patents as well as product and composition of matter patents. Patent exhaustion provides that an authorized sale of an article that substantially embodies a patent exhausts the patent holder's rights and prevents the patent holder from invoking patent law to control post-sale use of the article. This decision will likely have significant implications for biotechnology patent law since it will now be more difficult for patent holders to maintain a claim for infringement down the distribution chain of a product.