In an order yesterday, the Supreme Court asked the Solicitor General's office to file a brief providing the government's views on whether it should grant certiorari in Biomedical Patent Management Corp. v. California Department of Health Services (No. 07-956).  We previously blogged about the Federal Circuit's decision in this post.  The case deals with whether state agencies waive their Eleventh Amendment immunity from suit by actively enforcing their own patents.  Specifically, the questions presented in the petition are:

1. Whether a state's waiver of Eleventh Amendment immunity in one action extends to a subsequent action involving the same parties and the same underlying transaction or occurrence.
2. Whether a state waives its Eleventh Amendment immunity in patent actions by regularly and voluntarily invoking federal jurisdiction to enforce its own patent rights.

The last time the Court sought the Solicitor General's views on whether certiorari should be granted in patent case, the Solicitor General recommending granting certiorari.  That case was Quanta Computer Inc. v. LG Electronics, Inc., which was argued in January, with a decision still pending.  There is no specific timeframe for the Solicitor General's brief to be filed, but this case may be another to watch given the Court's recent interest in patent law.

Click below for links to the petition for certiorari and related filings.

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After the Supreme Court heard oral argument last week in Quanta Computer, Inc. v. LG Electronics, Inc. (No. 06-937), the media and blogosphere have begun to weigh in on the arguments.  You can find our take on the arguments in this post, or click below for a sampling of the coverage from other sources.  A decision is not expected until late spring.

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On Wednesday, the Supreme Court heard oral argument in Quanta Computer, Inc. v. LG Electronics, Inc. (No. 06-937), a case regarding the scope of the concept of patent exhaustion, also known as the first sale doctrine.  While the entirety of the arguments is worth a read (the transcript is available here), click below for our impressions of the arguments.

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Tomorrow the Supreme Court will hear oral argument in Quanta Computer, Inc. v. LG Electronics, Inc. (No. 06-937). The case will determine whether patent owners who sell products embodying their patents conditionally are able to recover damages for patent infringement if the products are subsequently sold beyond the scope permitted by the original sale.

The question presented is:

Whether the Federal Circuit erred by holding, in conflict with decisions of this Court and other courts of appeals, that respondent's patent rights were not exhausted by its license agreement with Intel Corporation, and Intel's subsequent sale of the product under the license to petitioners.

The outcome of the case will determine whether patent holders can obtain damages for infringement when they conditionally sell products embodying their patent if the product is subsequently used beyond the scope of those conditions.  Under the Federal Circuit's decision, such a conditional sale did not exhaust LG's patent rights, and therefore LG could pursue claims of patent infringement against those downstream purchasers and users of the product, even though the products were purchased from Intel, who was licensed by LG, the patent holder.  If the court sides with the petitioners, it could result in some cases that are, in essence, patent cases being heard by the regional circuits or even state courts.  This is because that outcome could essentially change the cause of action for the patent holder for these "downstream" sales from one of patent infringement (which carries with it exclusive federal jurisdiction and the Federal Circuit as the exclusive court of appeal), to one of breach of contract, which would not necessary even have to be heard in federal court, let alone by the Federal Circuit on appeal. 

It will also have an effect on how license agreements are written and potentially the amount of royalties that patent holders may want to pursue in such license agreements.  If the patentee is not able to obtain a royalty for downstream purchasers or use of their patented goods, the royalty that would otherwise have been spread over several levels of the distribution chain may have to be borne by the original purchaser.  Patentees may also begin seeking liquidated damages clauses in agreements with licensees to ensure compliance with the conditions of the sale, as the patentee would arguably no longer have a cause of action against the downstream purchaser.  The result is likely to be greater risk and investment costs incurred by the party making the original purchase from the patentee.

Our summary of the Federal Circuit decision being appealed may be found in this post, and our other coverage of the case may be found in these three posts. 

The ABA has posted all the merits briefs in the case on its site here.  SCOTUSBlog has also provided a preview of the case here.

Sometime in the afternoon, the transcript of the oral argument will be available here.

Update (1/16):  Some media sources have also now published previews of the arguments:

• Wall Street Journal
• CNN
• Bloomberg
  

Earlier this month, amicus briefs either supporting the Petitioner or neither party were filed with the Supreme Court in connection with Quanta Computer, Inc. v. LG Electronics, Inc (No. 06-937).  Our previous coverage of the case can be found in these three posts.  The Court also set oral argument for January 16, 2008.

Some discussion of the amicus filings and links to the briefs after the jump.

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In its first conference of this Term, the Supreme Court today granted certiorari in Quanta Computer, Inc. v. LG Electronics, Inc. (No. 06-937).  Our previous coverage of the case can be found in these two posts.

The question presented is:

Whether the Federal Circuit erred by holding, in conflict with decisions of this Court and other courts of appeals, that respondent's patent rights were not exhausted by its license agreement with Intel Corporation, and Intel's subsequent sale of the product under the license to petitioners.

The outcome of the case could have a substantial effect on how patent license agreements are both drafted and construed by courts.  The case will likely be argued in early 2008.

Relevant links:

• Government's brief in support of certiorari
• Petition for certiorari
• Brief in opposition
• Reply brief
• Order granting certiorari
  

Update (1:00):  The Associated Press provides this report on the case, and Reuters provides this report.

In a filing on August 24 (that got put on the back burner with the hubbub about the new continuation and claim limit rules), the government has recommended that the Supreme Court grant certiorari in Quanta Computer, Inc. v. LG Electronics, Inc. (No. 06-937).  Detail about the Federal Circuit's decision may be found in this post.  The question presented is:

Whether the Federal Circuit erred by holding, in conflict with decisions of this Court and other courts of appeals, that respondent's patent rights were not exhausted by its license agreement with Intel Corporation, and Intel's subsequent sale of the product under the license to petitioners.

If the Court hears the case, the outcome could have a dramatic impact on how patents are licensed, and the restrictions that patent holders are able to effectively place in patent license agreements.  While the government supporting granting certiorari does not make a grant a foregone conclusion, it does increase the chances the Court will hear the case.  The petition has been distributed to the Justices, and will be considered at the September 24 conference.

Relevant links:

• Government's brief in support of certiorari
• Petition for certiorari
• Brief in opposition
• Reply brief
  

A bit more is available from SCOTUSBlog and Patently-O.

Overruling a nearly century old decision, the Supreme Court Thursday held that a manufacturer may, in some instances, enter into a vertical agreement with its retailers to set minimum retail prices for the manufacturer's goods.  The court overruled the venerable decision in Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U.S. 373 (1911), which held that such agreements were a per se violation of Section 1 of the Sherman Act.

Instead, the Court, in a 5-4 decision, overruled Dr. Miles, and held that such agreements are subject to "rule of reason" analysis.  The justification for doing so was that such arrangements can have both procompetitive effects as well as anticompetitive ones, and as a result should not be illegal in all cases as mandated by the per se rule.

In dissent, Justice Breyer, joined by Justices Stevens, Souter, and Ginsburg, did not think Dr. Miles should have been overruled.  This was in part because of the rule of stare decisis and in part because of the expense and difficulty of using the rule of reason analysis to "separate the beneficial sheep from the antitrust goats." 

Interesting tidbit:  Justice Kennedy, who wrote the majority opinion, was in the majority of all of the Supreme Court's 5-4 decisions this term, and only dissented in 2 of the 71 cases in which he participated. 

To read the full decision in Leegin Creative Leather Prods., Inc. v. PSKS, Inc., click here.

Further commentary from various sources:

Antitrust & Competiton Policy Blog

Law.com

Wall Street Journal  

Wall Street Journal law blog

University of Chicago Faculty law blog

ACS Blog

Update (7/6):  Law.com offers this piece regarding the tough Supreme Court term for antitrust plaintiffs.

Below is a sampling of various media reports regarding yesterday's two Supreme Court patent decisions, KSR Int'l Co. v. Teleflex, Inc. and Microsoft Corp. v. AT&T Corp.:

"Court douses patent wildfire" (Chicago Tribune)

"Ruling toughens patent process" (USA Today) 

"Patent protections tempered by Supreme Court rulings" (Los Angeles Times) 

"High court puts limits on patents" (New York Times) 

"Patent holders' grip weakens" (Wall Street Journal) 

"US high court loosens patent 'obviousness' test" (Reuters)

"Experts say high court rulings weaken patent law" (Houston Chronicle) 

"Supreme Court reins in patent power" (Seattle Times) 

"Rulings weaken patents' power" (Washington Post) 

"Supreme Court limits patent suits" (Boston Globe) 

"Getting a patent just got harder" (Forbes) 

"High court hands tech firms patent victory" (MSNBC) 

"Court cases threaten weaker patents" (Business Week via AP) 

"Supreme Court adopts new standard on patent litigation" (Law.com) 

In can what only be described as a busy day at the Supreme Court, the Court, in addition to rendering opinions in five cases (including two patent cases, see here and here), also proposed revisions to the Federal Rules of Civil, Criminal, Bankruptcy, and Appellate Procedure.  

While the Rules of Appellate Procedure only have a single change (adding Rule 25(a)(5) relating to privacy protection), the Civil Rules have edits in (apparently) every rule.  Most appear to be cosmetic, predominantly changing "legalese" into more easily readable text.  For example, here is the current version of Rule 56(a), regarding Summary Judgment:

Rule 56. Summary Judgment

(a) FOR CLAIMANT. A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory judgment may, at any time after the expiration of 20 days from the commencement of the action or after service of a motion for summary judgment by the adverse party, move with or without supporting affidavits for a summary judgment in the party’s favor upon all or any part thereof.

Here is the proposed revised version:

Rule 56. Summary Judgment

(a) By a Claiming Party. A party claiming relief may move, with or without supporting affidavits, for summary judgment on all or part of the claim. The motion may be filed at any time after: (1) 20 days have passed from commencement of the action; or (2) the opposing party serves a motion for summary judgment.

The substance of the Rule appears to be the same, only the phrasing appears to differ.  The bulk of the changes appear to be of this nature, but hopefully the Court or Congress will post a version with changes highlighted for a more thorough analysis.  The one apparent addition is Rule 5.2, which, like the new Appellate Rule, deals with privacy protection for documents filed with courts. 

The revisions now go to Congress for its review.  If Congress makes no changes, the updated rules will become effective December 1, 2007.