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The Federal Circuit reversed the grant of summary judgment of non-infringement under the doctrine of patent exhaustion.  The patents-in-suit involved “systems and methods for handling information and providing it to wireless devices, such as mobile phone handsets,” referred to as the “content claims,” which are distinguished from the “handset claims,” which were not at issue in this case. The district court held that licenses granted to “every” handset manufacturer for the sales of handsets exhausted the patentee’s ability to enforce the patents against the defendant content providers who use “presumptively distinct inventions” to manage content and deliver it to handset users and expressly disclaimed any grant of rights to content providers and reserve enforcement rights against them.  In granting summary judgment of non-infringement, the district court presumed that, because the licenses were to “every” handset manufacturer and because all of the patents required the use of a handset, the patentee had exhausted its rights against even the content providers.  The Federal Circuit, however, stated that the doctrine of exhaustion requires, at a minimum, that the patentee’s allegations of infringement entail direct infringement of the asserted claims by authorized acquirers (the licensed parties or a subsequent owner/possessor of the licensed product).  Here, the patentees have not asserted infringement against the handset acquirers or shown that the handset acquirers are practicing the content claims and therefore exhaustion did not apply to the content providers for the content claims. 

Helferich Patent Licensing, LLC v. The New York Times Co., Case No. 2014-1196, -1197, -1198, -1199, and -1200 (February 10, 2015); Opinion by: Taranto, joined by Bryson and Chen; Appealed From: District Court for the Northern District of Illinois, Darrah, J. Read the full opinion here.

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