Helferich Patent Licensing, Ltd. Liab. Co. v. N.Y. Times Co. - 778 F.3d 1293 (Fed. Cir. 2015)

Rule:

In applying and refining the doctrine of patent exhaustion for a century and a half, the United States Supreme Court has considered various issues about the doctrine's scope, including issues concerning the character of the article authorized to be sold and its relation to the asserted claims. But the doctrine's protection against infringement allegations has, apparently, always remained within a limit that reflects the core notion that exhaustion lifts legal restrictions on an authorized acquirer. The doctrine has never applied unless, at a minimum, the patentee's allegations of infringement, whether direct or indirect, entail infringement of the asserted claims by authorized acquirers—either because they are parties accused of infringement or because they are the ones allegedly committing the direct infringement required by the indirect infringement charged against other parties.

Facts:

Helferich Patent Licensing, LLC was the owner of more than thirty United States patents covering a range of distinct, though, related wireless-communication technologies. Between July 2010 and March 2012, Helferich brought an action against defendants New York Times Co., G4 Media LLC, CBS Corporation, Bravo Media LLC, and J.C. Penney Corporation, Inc., alleging infringement of various claims of seven patents—U.S. Patent Nos. 7,280,838; 7,499,716; 7,835,757; 8,107,601; 8,116,741; 8,134,450; and 7,155,241. The asserted claims, generally speaking, addressed systems and methods for handling information and providing it to wireless devices, such as mobile-phone handsets. The United States District Court for the Northern District of Illinois granted summary judgment of non-infringement under the doctrine of patent exhaustion. It held that, by granting handset manufacturers patent licenses conferring broad authority to sell the handsets, Helferich had exhausted its ability to enforce its patents not only against acquirers of the handsets but also against the defendant content providers who used presumptively distinct inventions to manage content and deliver it to handset users. Helferich appealed.

Issue:

Did the district court correctly apply the doctrine of patent exhaustion in its decision to grant summary judgment in favor of the defendants?

Answer:

No.

Conclusion:

The Court held that the district court's reliance on the patent exhaustion doctrine was misplaced because the doctrine had only been applied in cases where an alleged infringer had acquired an interest in a patent. Decisions finding exhaustion (or relying on exhaustion to reject an antitrust defense) have done so only when a patentee's assertion of infringement was, or depended on, an assertion that an authorized acquirer was using the same invention by infringing the asserted claims. In the case at bar, the Court held that the district court’s conclusion that the patent holder had exhausted its ability to enforce its patents not only against acquirers of its handsets but also against content providers who used other inventions to manage content and deliver it to users of the patent holder's handsets was an unwarranted extension of the doctrine.