On June 9, the Supreme Court issued an important decision affecting the doctrine of exhaustion of patent rights through licensing of patented methods and components. In Quanta. v. LG Electronics, the Court reversed the Federal Circuit in a 9-0 decision. It held that the doctrine of patent exhaustion applies to method claims and further that this doctrine is triggered by the authorized sale of products that ?substantially embody? the patent, that is, products that have no reasonable non-infringing use and include all the inventive aspects of the patent. Once these products have been sold, the patentee?s rights are extinguished, and they cannot recover on further downstream sales.

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