LifeScan May Be Why Patent Exhaustion Had No Pulse in Nero

Intellectual Property Associate Gino Cheng authored an article titled “LifeScan May Be Why Patent Exhaustion Had No Pulse in Nero” published in Law360 on September 29, 2015. The article analyzes the impact of the LifeScan Scotland Ltd. v. Shasta Techs. decision on the patent exhaustion claim in JVC Kenwood Corp. v. Nero Inc.

The United States Supreme Court decision in Quanta Computer, Inc. v. LG Elecs., Inc. opened the door for exhausting method claims upon the authorized sale of components that substantially embodied them. The Federal Circuit grappled with Quanta’s implications in LifeScan and determined in Helferich Patent Licensing, LLC v. The New York Times Co. how the licensed sale of a product that embodies some method claims does not necessarily exhaust other method claims that cover complementary products or services. On the heels of Helferich, the Federal Circuit decided in JVC Kenwood Corp. v. Nero Inc. (Nero II) whether a software provider is liable for contributory or induced infringement of standard-essential patents. Nero II turned on the related question: Are purchasers of licensed, standard-compliant DVD and Blu-ray discs liable as direct infringers if they use the authorized discs in combination with unsanctioned software (assuming such combined use necessarily practices the standard-essential patents)?

Against this backdrop of recent decisions on complementary products, what aspects of the patent exhaustion doctrine does the Federal Circuit’s recent holding in Nero II develop and how far does it move the mile marker? As the article explains, far from a drive, Judge Pauline Newman’s opinion represents a carefully coordinated pick-and-roll.

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