[Linux-aus] Fwd: [A2k] Consumer groups urge US Supreme Court to curb patent power

Janet Hawtin lucychili at gmail.com
Mon Nov 19 21:49:40 UTC 2007

Second hand chattels in patent wrangling.
Copyright DRM could cause hardware halflife where tech may not be safe
to be reused or recycled. Now patent folks are pushing for control of
secondhand goods too.
via A2K

---------- Forwarded message ----------
From: Manon Ress <manon.ress at keionline.org>


Consumer groups urge Supreme Court to curb patent power
Selling second-hand patented goods should not be illegal

The US Supreme Court has been urged not to make it illegal to sell
second-hand patented goods. Digital rights activists have begun a
campaign to keep a buyer's right to sell on used goods.

The part of US patent law that allows an owner of a computer or
camera to sell it after use is called patent exhaustion. It restricts
the right of a patent holder to stop the sale of goods containing
their patented inventions so it only applies to the first sale of
goods to consumers.

The case in question is between Quanta Computer and LG Electronics
and concerns the use of labels on products stipulating that the
product is "not for resale" or "single use only".

Digital rights group the Electronic Frontier Foundation (EFF) and
consumer advocacy body Consumers Union have filed a brief to the
Supreme Court supporting the restriction on patent law that the
patent exhaustion principle creates.

"In the words of this court, 'in the essential nature of things, when
the patentee, or the person having his rights, sells a machine or
instrument whose sole value is in its use, he receives the
consideration for its use and he parts with the right to restrict
that use'," said the document filed to the Supreme Court.

"Consequently, according to a century old line of supreme court and
lower court precedents, when a consumer purchases a patented product,
that consumer owns it outright, and the patent owner may not
thereafter invoke patent law to restrict its post-sale use, repair,
or resale," it said.

The EFF said a ruling in the early 1990s from a federal circuit court
in a case involving a healthcare company Mallinckrodt called the
patent exhaustion principle an 'implied licence', which opened the
door to a greatly increased number of stickers on products which
attempted to restrict consumers' use of products they had bought.

It said the existence of vibrant markets for second-hand goods such
as eBay or Craigslist meant such attempts to hamper second hand sales
affected consumers greatly.

"By empowering patent owners to conjure what amount to servitudes
that run with patented goods, the federal circuit has impermissibly
and unwisely expanded patent scope by judicial fiat," said the document.

The case centres on wholesale computer maker Quanta's use of Intel
chips that in turn used LG Electronics' technology. LG had licensed
the technology to Intel, which sold chips to Quanta, which built PCs
for Dell, Hewlett-Packard, and others.

LG then sued Quanta for patent infringement for its use of LG
technology in the machines. "LG's effort here is just one example of
the mischief that unleashed by Mallinckrodt ushering in an era of
chattel servitudes backed by patent law," said the EFF submission.

"The patent exhaustion doctrine allows consumers to trust that the
ordinary use, repair, and resale of the tangible goods they purchase
will not give rise to an infringement suit at the hands of the
patentee who sold it to them."

The brief submitted to the court said undermining patent exhaustion
tipped the balance of power away from consumers. "By disregarding
more than a century of patent exhaustion precedent and legislative
acquiescence, the federal circuit has worked an unsupportable
judicial expansion of the scope of the patent monopoly. With this
expansion of patent scope will come a net wealth transfer from
consumers to patent owners," it said.

See: The brief to the Supreme Court (28 page/123KB PDF)

Copyright (c) 2007, OUT-LAW.com
Manon Anne Ress
manon.ress at keionline.org,

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sans la remuer.
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Translation: It is better to debate a question without settling it
than to settle a question without debating it

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