Helferich Patent Licensing, LLC v. New York Times Co.
778 F.3d 1293
| Fed. Cir. | 2015Background
- Helferich owned a portfolio of patents covering related wireless technologies, divided into “handset claims” (for mobile devices) and “content claims” (for servers/systems that store/update/send content to handsets). Only content claims were asserted against defendants.
- Helferich licensed handset manufacturers broadly, so purchasers of licensed handsets are "authorized acquirers," insulating them from infringement suits under patent exhaustion.
- Defendants are content providers (e.g., New York Times, CBS, Bravo) accused of infringing content claims by sending notifications/links to handsets and delivering content on request.
- District court granted summary judgment for defendants, holding Helferich’s licenses to handset makers exhausted Helferich’s rights as to third-party content providers because the asserted patents "require" use of handsets.
- Federal Circuit (Arant o, J.) reversed, holding exhaustion does not extend so far as to bar enforcement of distinct content patents against content providers when authorized-sales exhaustion does not rest on authorized acquirers practicing the asserted claims.
Issues
| Issue | Helferich's Argument | Defendants' Argument | Held |
|---|---|---|---|
| Whether patent exhaustion bars Helferich’s suits against content providers because all asserted claims "involve" licensed handsets | Exhaustion only protects authorized acquirers; it does not bar suit against third parties when authorized acquirers are not accused of practicing the asserted claims | Because all asserted claims contemplate use of handsets and every handset is licensed, exhaustion precludes enforcement against content providers | Rejected: exhaustion does not bar the claims as framed; exhaustion applies only where authorized acquirers would be the ones practicing (directly or as the target of induced infringement) the asserted claims |
| Whether exhaustion requires an authorized acquirer to be the party alleged to infringe (directly or as the induced direct infringer) | Exhaustion historically has applied only when the patentee’s claim depended on infringement by authorized acquirers | Defendants urged a broader, practical-effects test—if enforcement would impair authorized acquirers’ use, exhaustion should apply | Court held historical precedent requires that exhaustion rests on authorized acquirers infringing; practical-effects test is unbounded and improper |
| Whether distinct but complementary patents (handset vs. content) are collapsed by exhaustion if the licensed product’s utility depends on the other patent | Helferich argued separate patents remain enforceable; Morgan/Aiken and later decisions show exhaustion does not sweep to distinct inventions | Defendants argued complementary utility means exhaustion of handset patents should defeat claims on content patents | Court relied on Morgan/Aiken and related precedent: licensing one distinct invention does not exhaust rights in a separately patentable complementary invention |
| Whether doctrines from Quanta/Univis (e.g., "substantially embodying" or "no reasonable noninfringing use") require exhaustion here | Helferich argued content claims and handset claims are patentably distinct; asserted content claims have reasonable noninfringing uses independent of handset inventive features | Defendants relied on Quanta/Univis to show sold handsets substantially embody the claimed inventions, supporting exhaustion | Court held Quanta/Univis inquiries (inventive aspects; reasonable noninfringing uses) do not support exhaustion here because the content and handset claims are separately inventive and content claims do not require the handset to practice handset-inventive features |
Key Cases Cited
- Quanta Computer, Inc. v. LG Elecs., Inc., 553 U.S. 617 (discussing when sale of an article "substantially embodies" a method patent for exhaustion)
- Univis Lens Co. v. United States, 316 U.S. 241 (early articulation of exhaustion where sold article contains all inventive aspects)
- Morgan Envelope Co. v. Albany Perforated Wrapping Paper Co., 152 U.S. 425 (exhaustion does not bar enforcement of a separately patentable complementary invention)
- Keurig, Inc. v. Sturm Foods, Inc., 732 F.3d 1370 (exhaustion evaluated where accused induced infringement depended on authorized acquirers' direct infringement)
- LifeScan Scot., Ltd. v. Shasta Techs., LLC, 734 F.3d 1361 (clarifies Quanta analysis; alternative uses must be "reasonable and intended" to weigh against exhaustion)
- Bowman v. Monsanto Co., 133 S. Ct. 1761 (first-sale/exhaustion principles described in property-value context)
- Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502 (exhaustion protects authorized acquirers from suits based on products they acquired)