US Supreme Court: 06-937

8/14/2019 US Supreme Court: 06-937

http://slidepdf.com/reader/full/us-supreme-court-06-937 1/69

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

Official - Subject to Final Review

IN THE SUPREME COURT OF THE UNITED STATES

- - - - - - - - - - - - - - - - - x

QUANTA COMPUTER, INC., :

ET AL., :

Petitioners :

v. : No. 06-937

LG ELECTRONICS, INC. :

- - - - - - - - - - - - - - - - - x

Washington, D.C.

Wednesday, January 16, 2008

The above-entitled matter came on for oral

argument before the Supreme Court of the United States

at 10:16 a.m.

APPEARANCES:

MAUREEN E. MAHONEY, ESQ., Washington, D.C.; on behalf

of the Petitioners.

THOMAS G. HUNGAR, ESQ., Deputy Solicitor General,

Department of Justice, Washington, D.C.; on behalf of

the United States, as amicus curiae, supporting the

Petitioners.

CARTER G. PHILLIPS, ESQ., Washington, D.C.; on behalf

of the Respondent.

1

Alderson Reporting Company



1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


C O N T E N T S

ORAL ARGUMENT OF PAGE

MAUREEN E. MAHONEY, ESQ.

On behalf of the Petitioners 3

THOMAS G. HUNGAR, ESQ.

On behalf of the United States,

supporting the Petitioners 16

CARTER G. PHILLIPS, ESQ.

On behalf of the Respondent 26

REBUTTAL ARGUMENT OF

MAUREEN E. MAHONEY, ESQ.

On behalf of the Petitioners 55

2




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


P R O C E E D I N G S

(10:16 a.m.)

CHIEF JUSTICE ROBERTS: We'll hear argument

first today in Case 06-937, Quanta Computer v. LG

Electronics.

Ms. Mahoney.

ORAL ARGUMENT OF MAUREEN E. MAHONEY

ON BEHALF OF THE PETITIONERS

MS. MAHONEY: Mr. Chief Justice, and may it

please the Court:

Under this Court's exhaustion cases,

exhaustion has always been triggered when two criteria

have been satisfied and the district court properly

dismissed these claims because it found that they were

satisfied here on the undisputed facts. The first is

that there must be an authorized sale under the patent

that was allegedly infringed. That's never been in

dispute in this case. The Federal Circuit recognized

that Intel was authorized to sell these components under

the system and method patents at issue in the case that

have been allegedly infringed.

And the second criteria is that the article

sold must be one that falls within the protection of the

patent that was allegedly infringed, here the system and

method patents. But as Univis holds, that test doesn't

3




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


apply simply to articles that would directly infringe

the patent, because the law with contributory

infringement standards provides that protection to the

patent owner also to articles that would contributorily

infringe. In other words --

JUSTICE STEVENS: Ms. Mahoney, can I just

get one thing straight in my mind. Which transaction

triggered the exhaustion doctrine in your judgment, the

general license to Intel or the sale by Intel to Quanta.

MS. MAHONEY: I think they work in

combination here, Your Honor, because once the sale

was -- once the license was entered into with Intel and

once unrestricted rights were given to make, use and

sell components that would infringe, otherwise infringe

these patents, there was really nothing else that could

happen --

JUSTICE STEVENS: Was the license

unrestricted? That's one of the reasons I asked the

question. Wasn't there a use restriction on the resale?

MS. MAHONEY: Well, there was -- what there

was, the sale was authorized. The sale was authorized.

What --

JUSTICE STEVENS: On the condition that it

be sold to someone who would not use it on non-Intel

products.

4




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


MS. MAHONEY: I don't think that's what the

lower courts found and I don't think that's what the

argument has ever been, Your Honor. I think this is

just like Bobbs-Merrill. There is a -- this Court has

recognized that there is a difference between actually

conditioning the seller's authority to sell to someone

who's going to use it for some prohibited purpose, and

that would be a case like General Talking Pictures,

where it says, you do not have authority to sell to

someone who's going to use it for the home market. But

Bobbs-Merrill says if what you do instead -- it was a

copyright case that was applied in Motion Picture

Patents. If what you do instead is you give them

authority to sell, you don't say you'll be in breach if

you sell it to somebody who's going to sell books at

below the retail price I've specified, if instead what

you do is say, you have to agree you'll give them notice

that the -- that the owner of the invention, or in that

case the copyright, is not agreeing to your use of these

books or sale of these books at below a certain price,

that doesn't count. There's still an authorized sale,

that when -- that you can't -- that the patent owner

can't try to retain part of the monopoly right to sell.

CHIEF JUSTICE ROBERTS: Well, if that's true

then this case really isn't a big deal at all. It just

5




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22 --

23

24

25


depends on exactly how you word the contract when the

patentee sells it to a purchaser. You can word it -- in

other words, you can word it in such a way that the

patentee's rights extend further downstream and you're

saying all this case turns on is whether the wording

here was correct or not.

MS. MAHONEY: Well, the wording hasn't been

in dispute, but a lot of important things turn on it,

because of course if Intel didn't have the authority to

make these sales, it would be liable for contributory

infringement. And undoubtedly when Intel decided how

much to pay for this license it cared deeply about

whether it was going to be exposed to that liability.

CHIEF JUSTICE ROBERTS: Well, I understand

your position to -- to acknowledge that they could have

structured the sale to Intel in such a way as to achieve

the same result that you're saying is so bad under the

patent laws.

MS. MAHONEY: I don't think so, Your Honor.

Once they have an authorized sale, then the results are

different, because if there has been an authorized sale

JUSTICE GINSBURG: May I give you a specific

example? I think the Chief has something on this order

in mind. Could the patentee say to the licensee, to the

6




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


Intel, that, I license you to sell only to buyers who

have a license from the patentee? Could -- could the

licensee be limited in that way?

MS. MAHONEY: They could do that, and let me

explain the consequences of doing that. If Intel then

under those circumstances sold to a buyer who did not

have a license, Intel would be liable for contributory

infringement because it wouldn't be an authorized sale,

and the buyer would be liable for infringement because

it didn't acquire the goods through an authorized sale.

If the buyer instead has the license, has obtained the

license from the patentowner, then there has been an

authorized sale and any remedies that the owner of the

patent would have against the buyer would be those found

in contract, because the triggering line under this

Court's cases is has there been an authorized sale? And

this makes perfect sense because --

JUSTICE GINSBURG: But explain to me --

perhaps I should ask Mr. Phillips this question -- but

why isn't it done that way? The way -- if the patentee

wants to maintain control further down the line, why

doesn't the patentee just limit the licensee to selling

to people who are licensed?

MS. MAHONEY: Presumably because in this

circumstance -- it's not in the record -- but presumably

7




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


Intel wouldn't agree to these terms unless it in fact

was given authority to sell, no matter how it was going

to be used, because otherwise it would still be on the

hook for liability. And -- and presumably they could

have done something that would have required an

agreement with -- you know, between -- only sell to

someone with an agreement. But for whatever reason the

parties didn't negotiate that term. Perhaps Intel

wasn't willing to do it that way.

CHIEF JUSTICE ROBERTS: So the parties are

unwilling to spell out exactly how this is going to work

out in their contract, and each side, it prefers to take

their chances on how the Federal Circuit's going to

rule. It's easier to sell these things if they're not

encumbered by these additional license requirements and

the manufacturer presumably gets a lot more, but there's

a lot of uncertainty, uncertainty that could have been

cured by how the contract was drafted, and people prefer

to live with that uncertainty and litigate rather than

clear it up in the contract.

MS. MAHONEY: Well, I think that this

Court's ruling would certainly make things clear, but I

think that the language of the contract recognizes that

the -- specifically says that, notwithstanding anything

to the contrary, the ordinary operation of patent

8




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


exhaustion is supposed to apply here. In other words, I

think Intel knew --

CHIEF JUSTICE ROBERTS: Fine, and the person

who wrote that provision knows that the question of how

the patent-exhaustion doctrine applies is the subject of

great confusion, so much confusion that the Supreme

Court's going to have to decide it, and yet they put

that in there rather than spelling out in the contract

exactly which they had in mind, whether or not you could

impose these further restrictions or couldn't.

MS. MAHONEY: But, Your Honor, I think that

under this Court's decision in Univis Lens, as the

district court recognized, the answer in this case is

actually quite clear what the patent-exhaustion doctrine

would require. And the reason it's clear --

CHIEF JUSTICE ROBERTS: Well, it wasn't

clear to the Federal Circuit, I guess.

MS. MAHONEY: It wasn't clear to the Federal

Circuit, but it was clear to the district court, showing

that the idea that somehow it was absolutely known to

everybody what the outcome of this issue would be is not

correct. The district court, I think correctly,

understood that Univis Lens was the controlling case.

Of course, the Federal Circuit didn't even cite it. But

the district court found that the Univis Lens standard

9




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


was satisfied because these components were necessarily

manufactured in a manner that satisfied, that included

the functionality of the system and method patents at

issue here. At 30a, the district court looks to LGE's

own claim charts and says that their own allegations

show that they were manufactured in a way that met many

of the limitations of the claims.

In addition, at 67 of the petition appendix,

she says that by attaching the components, the Intel

chips, to the -- the other generic wires and memory, it

necessarily caused these products to infringe. And, at

46, she says, "Failure to follow Intel's design

specifications would render the computers inoperable."

So, this is a case where there's just no

question that if LGE's allegations are correct these

products would have contributorily infringed. So Intel

knew that in order to avoid potential liability to -- to

LGE, that it had to get full authority to sell, and it

did. And there's never been any dispute about that.

Instead, there's simply the Federal Circuit's view that

even if you have an authorized sale, that the

patentowner is nevertheless allowed to say, okay, I

authorize the seller to sell it to anybody, but I want

to retain the right to control the use of the -- of the

buyer. And that's exactly what this Court's cases have

10




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


always said, with the exception of A.B. Dick, cannot be

done because the whole point of the exhaustion doctrine

is to demarcate the line between where the monopoly

power to control rights to use and sell end and where

any rights under contract must begin.

JUSTICE SOUTER: Well, there's one --

there's one more wrinkle that you don't expressly advert

to and that is the argument that what is in issue here

are the -- are the systems and methods patents, rather

than the -- the equipment component patents.

MS. MAHONEY: Yes.

JUSTICE SOUTER: And that with respect to

the equipment component patents nothing is being

retained, but with respect to the systems and method

patents nothing was being granted. What is your answer

to that answer to your argument?

MS. MAHONEY: It's completely inconsistent

with the way the case has been litigated from the outset

as well as the terms of the contract. At page 5 of the

petition appendix, the Federal Circuit acknowledges that

Intel had full authority to sell these components under

all of the patents, including the system and method

patents. If it didn't have authority to manufacture and

sell under the system and method patents, it would be

potentially liable for contributory infringement. And

11




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


in fact LGE has acknowledged in its brief in footnote 7

that Intel isn't potentially liable for contributory

infringement under the terms of this agreement.

JUSTICE SOUTER: So the answer simply is

that that the argument rests upon a mistake of fact

which has not been challenged in the record?

MS. MAHONEY: It absolutely has not.

JUSTICE SOUTER: Yes.

MS. MAHONEY: The component patents are not

at issue here at all. And the idea that you couldn't

have one patent on a component and another patent on a

system where the component would contributorily infringe

is nonsensical. These components had thousands of

patents on them. And certainly the argument isn't that

by authorizing the sale of the component all of the

owner's rights are released in that. If, instead, there

had been a sale of a component where a patent owner

says, I'll authorize you to sell my -- my -- that

component under my component patent, but if you sell it

under my system patent -- I'm not giving you authority

to sell it under my system patent, so if you sell it,

I'm going to sue you for infringement, that didn't

happen here, and it's never been litigated in that way.

Instead, that first criteria of the

authorized sale has plainly been satisfied, and the only

12




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


question in this case has been whether or not this

satisfied the contributory infringement standard that

Univis Lens uses to define what articles --

JUSTICE STEVENS: Ms. Mahoney, I understand

that's really the way it's been litigated, but I have to

confess I was puzzled by the court of appeals' statement

that the granting of the license constituted a sale for

exhaustion purposes, and they cited the Masonite case

for that proposition, but it doesn't seem to me to

support that proposition.

MS. MAHONEY: Your Honor, I think all that

that really is saying is that at a point when you enter

into -- a patentowner enters into an unrestricted

license to make, use, and sell with a manufacturer, then

at that point any articles that are manufactured under

that license, effectively the patent's been exhausted.

But I think it's easier to --

JUSTICE STEVENS: It's not exhausted by the

manufacturer, is it?

MS. MAHONEY: No. For contributorily

infringing --

JUSTICE STEVENS: It's exhausted under this

view by the licensee's sale of an article that it

manufactured pursuant to the license.

MS. MAHONEY: But -- right, manufactured

13




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


pursuant --

JUSTICE STEVENS: And it seems to think

there's no distinction between the sale itself and the

basic underlying license, whereas I had thought for

years that there was recognized a distinction between

those two transactions.

MS. MAHONEY: Well, I think that it just

means that once you have that transaction any sales that

occur for those articles under that license are going to

be exhausted by definition. But, you know, we have

certainly focused on the sale of the articles to Quanta

from Intel, and I think, you know, it makes sense to

look at it that way.

And, as indicated, there really is -- there

have been arguments that somehow this deprives the

patentowner of the right to collect its full royalty,

but that doesn't make any sense. Because if you -- if

you look at the rights that are afforded under

contributory infringement, what Congress has done in

Section 271(c) and what this Court had done before was

to say that if you are the owner of a system patent or a

method patent, you can go ahead and collect your royalty

when someone sells a product that will contributorily

infringe.

In other words, your -- your product is

14




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


sufficiently -- your patent is sufficiently embodied in

those contributorily infringing products that it's

appropriate for you to collect your royalty there.

That's exactly what happened in this case. LGE did get

its royalty from Intel, did give them authority to sell

products which would otherwise contributorily infringe,

and now what it's seeking to do is to say, despite the

authorized sale, despite the fact it would

contributorily infringe, we want to collect another

royalty from the buyer of the product that can't use it

for any other purpose. Why? Well, because we have --

we had them sent a notice that said we wanted to do

that.

Under this Court's cases, that is completely

impermissible. In two cases in particular, Motion

Picture Patents, they tried to do the exact same thing.

And in the Millinger case the patentowner said that it

had never gotten paid for the extension rights under its

patent. And this Court said: Nope; once you've sold

the article, that's the royalty you get.

JUSTICE KENNEDY: I see your white light is

on. I have just one question. Are there cases where

some downstream restrictions on use might be necessary

to prevent the patent from becoming worthless, i.e., in

the biological area for replication of seeds in

15




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


agriculture and so forth?

MS. MAHONEY: Well, what we're -- exhaustion

is triggered when -- with respect to the rights to

control and use. Rights to make are treated

differently.

Univis, of course, though, holds that when

you're talking about the sale of a contributorily

infringing product, you're really talking about the

right to -- to make it, to use it, to complete the --

complete the article. But I think --

JUSTICE KENNEDY: I thought Univis was one

of your principal cases.

MS. MAHONEY: It is, absolutely. It holds

-- in other words, what Univis holds is that when you

have an article that is uncompleted -- it's not finished

-- as in this case, by the -- the sale will -- will

mean, by definition, that you can use it to complete the

article.

I'd like to reserve the remainder of my

time. Thank you.

CHIEF JUSTICE ROBERTS: Thank you,

Ms. Mahoney.

Mr. Hungar?

ORAL ARGUMENT OF THOMAS G. HUNGAR

ON BEHALF OF THE UNITED STATES,

16




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


AS AMICUS CURIAE,

SUPPORTING THE PETITIONERS

MR. HUNGAR: Thank you, Mr. Chief Justice,

and may it please the Court:

For 150 years this Court has held that an

authorized sale removes the particular item sold from

the protection of the patent laws. The court below

erroneously transformed that patent-exhaustion doctrine

from a definitional principle that delimits the scope of

the patent grant into an optional default assumption

that can be discarded at the whim of the patentee.

If the rationale of the court of appeals were correct,

this Court's decisions in cases like Univis, Motion

Picture Patents, Straus, Bauer and Boston Store would

have to have gone the other way, because in each of

those cases this Court held that the exhaustion

principle overrode express restrictions that the

patentee had attempted to impose on after-sale use or

resale by an authorized purchaser.

This Court should follow its precedents and

reaffirm the principle that the patent-exhaustion

doctrine precludes a patentee from employing the patent

law to enforce post-sale restrictions on use or resale

by authorized purchasers, that is --

JUSTICE GINSBURG: Mr. Hungar, is there a

17




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


reason why Congress codified this doctrine in the

Copyright Act, but not in the Patent Act?

MR. HUNGAR: We -- there's nothing in the

legislative record that would explain that, Your Honor.

Presumably it's because Congress wanted to specify

particular limits, which Section 109 of the Copyright

Act does. It wanted to specify particular limits to

define the scope of the doctrine in the copyright

context in a way that it has not sought -- found it

necessary to do in the patent area.

But there's no legislative history about

this. I mean, this Court has said that the 1952 act

codified, recodified, and readopted, reaffirmed, the

principles of the Court's cases on infringement

generally. Obviously --

JUSTICE GINSBURG: And the PTO didn't take

any position on whether it should be codified?

MR. HUNGAR: I'm not aware of anything in

the legislative history of the 1952 codification on the

subject of the patent exhaustion doctrine one way or the

other; but, obviously, Congress did not express any

dissatisfaction with it.

It did change certain aspects of patent law,

but it did not attempt in any way to override or change

the effect of the first-sale doctrine, which under this

18




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


Court's cases has been perfectly clear for well over a

century and has the effect we've suggested.

And we submit that, although the Respondent

essentially ignores or runs away from the rationale of

the court of appeals, we submit it's important for this

Court to explicitly address and explicitly reject the

Federal Circuit's misunderstanding of the

patent-exhaustion doctrine, its view that a patentee can

essentially override it simply by attaching a notice to

the article that has been sold in an authorized sale.

CHIEF JUSTICE ROBERTS: Although you think

it can be overridden simply by providing in the contract

that the same rights and remedies would be available?

MR. HUNGAR: No, Your Honor. I mean, it

depends a little bit on what contract we're talking

about and what it says. It is true, as Justice Stevens

indicated, it has always been true, that this Court has

deemed a license under a patent to be different from a

sale of a particular article under a patent. It is the

sale of the article that exhausts. The license does not

-- exhaustion doesn't -- isn't relevant at the mere

licensing stage.

CHIEF JUSTICE ROBERTS: A mere license can

prevent the application of the patent-exhaustion

doctrine?

19




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


MR. HUNGAR: Well, only at the -- only at

the level of the licensee. That is, if it is true, as

Ms. Mahoney said, if the -- if LG here had given a

restricted license that restricted the right to sell,

that said you can only sell in these instances, and if

Intel then sold outside those permitted instances, that

would be patent infringement.

CHIEF JUSTICE ROBERTS: And it would be

patent infringement by the use of the product by the

people that Intel sold to?

MR. HUNGAR: Yes, because it was an

unauthorized sale.

CHIEF JUSTICE ROBERTS: That would sound

like your friend on the other side, the Respondent, had

actually won in this case.

MR. HUNGAR: Well, that's right. If this

had been an authorized sale -- I mean an unauthorized

sale, they would win. But, of course, it's been

accepted throughout the case, and the court of appeals

explicitly said at page 5A, and it's been undisputed,

that Intel had the right to sell these items to these

Petitioners.

They had the right to sell. It was not

infringing. And if it's not "infringing," by

definition, it's an "authorized" sale. It's authorized

20




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


under the patent explicitly by the license agreement.

JUSTICE BREYER: But you couldn't put in --

you are authorized to sell the bicycle pedals that I

have patented only if you impose a restriction that will

tell the bicycle user that he must send me a check for

$15 in addition to whatever he pays you. That sounds

unlawful under contract law.

MR. HUNGAR: Well, it might be lawful. You

could certainly do what, in fact, I think some of the

seed companies --

JUSTICE BREYER: Or you are going to have --

I mean, there's a doctrine that you cannot impose

equitable servitude's upon chattel.

MR. HUNGAR: Yes.

JUSTICE BREYER: That's a contract law

doctrine.

MR. HUNGAR: It would not be enforceable as

a matter of patent law against the authorized purchaser.

If -- if the licensee does what the licensee is

obligated to do, it imposes the -- it attaches the

notice or it requires the --

JUSTICE BREYER: My thought is that the

reason that these things are important and you can't

just draft your way around them is because there are

antitrust doctrines, there are contract-law doctrines,

21




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


that also limit in significant ways what you can and

cannot write into a contract.

MR. HUNGAR: That's exactly right.

CHIEF JUSTICE ROBERTS: Well, I think that's

an important question. I understood the argument at

page 16 of your brief to say that the patent-exhaustion

doctrine doesn't apply in that situation and that you,

therefore, can't have the rights and remedies under

patent law.

You told me earlier that if the person to

whom Intel sells the product uses it contrary to the

license stipulation, they would be liable for patent

infringement.

Your answer to Justice Breyer suggests to me

that you're saying only that they're liable to -- for

contract infringement, and that's a very big difference.

MR. HUNGAR: Well -- but, Your Honor, it all

goes back to the question: Was there an authorized sale

of the article at issue? If the sale is authorized, if

what the licensee --

CHIEF JUSTICE ROBERTS: Sale from whom to

whom?

MR. HUNGAR: The sale from the licensee to

the purchaser. The license is not a sale -- is not a

sale for purposes of the patent exhaustion. I think

22




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


that the Federal Circuit was just wrong in saying that,

because what the patent-exhaustion doctrine talks about

is the sale of an article. All the cases say the sale

of the particular article removes that article from the

-- from the patent monopoly.

CHIEF JUSTICE ROBERTS: But what you --

well, but what you say in your brief is that in the

situation we're talking about the licensee stands in the

shoes of the patentee. Now, if that's right it seems to

me that you're telling me that the patent remedies are

available and not simply contractual remedies.

MR. HUNGAR: No. What we're saying is this.

If -- if the licensee has a restricted license, that is

its right to sell is restricted, it can only sell on

Mondays and not on Tuesdays --

CHIEF JUSTICE ROBERTS: Well --

MR. HUNGAR: -- and it sells on a Tuesday.

CHIEF JUSTICE ROBERTS: Well, or, more

pertinently, it can only sell if the person they sell to

agrees not to use the product in a certain way.

MR. HUNGAR: Fine. If they have that

restriction and they sell and they do not -- they do not

obtain the contractual promise of the party that they

are obligated to obtain, they're violating the terms of

their right to sell. It's patent infringement by the

23




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


seller, and if the buyer uses it it's patent

infringement by them as well.

CHIEF JUSTICE ROBERTS: Exactly. That's the

critical point. You're telling me that if the buyer, in

other words, the kind of third person in this chain,

uses the patented article in a way that is contrary to

the license that was given to the second person in the

chain, then he is liable for contributory infringement

under the patent laws and not, as I understood you to

answer to Justice Breyer, only under contract law.

MR. HUNGAR: Yes, because --

CHIEF JUSTICE ROBERTS: Do you sue under

patent law or just contract law?

MR. HUNGAR: If -- in your hypothetical, as

I understand it, it's an unauthorized sale. The

licensee does not have the right to sell under the

patent in those circumstances, and therefore the

exhaustion principle does not apply.

JUSTICE SOUTER: But not every infringement

of the license is necessarily an unauthorized sale.

MR. HUNGAR: That's correct.

JUSTICE SOUTER: So there could be a

restriction in the license which is not a restriction on

sale and that could be violated. And the exhaustion

doctrine would still apply, and you might have remedies

24




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


in some another theory, i.e., contract.

MR. HUNGAR: That's correct. That's

correct. Likewise, what happens in the real world is

the patentee, if the patentee wants to restrict what

people can do downstream, they say to the licensee, you

can only sell if you obtain a contractual promise from

the purchaser.

JUSTICE STEVENS: Are you saying that this

case would come out differently if instead of just

requiring a notice that the -- the item should only be

used on Intel products, that had been a condition of the

license. If the license itself said you may manufacture

and sell to only people who agree to use the product

exclusively with Intel products?

MR. HUNGAR: Yes. In if those

circumstances, if Quanta had -- if that -- if that

license condition --

JUSTICE STEVENS: So the key fact in this

case is it was just a requirement of giving notice

rather than a condition in the license?

MR. HUNGAR: But let me be clear. The key

distinction is between an authorized sale and an

unauthorized sale. So if there is an authorized sale,

that is, Intel --

JUSTICE STEVENS: I understand that.

25




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


MR. HUNGAR: Well, I think I haven't been

clear, because I want to make sure that that the

consequences are clear --

JUSTICE STEVENS: The big key is what is an

authorized sale? And I'm asking you if the -- if the

license agreement to the -- to Intel had said you may

only sell to people who agree to use the products on the

patentee's products, that then would -- and they did

otherwise, they didn't get -- then it would not have

been an authorized sale?

MR. HUNGAR: Correct, and it would be patent

infringement. But if they sold and the purchaser did

agree, they did enforce that requirement, they did

require the purchaser to sign a promise -- may I finish,

Your Honor -- to promise to limit the use and the

purchaser then violated that promise, the point is that

would be a breach of contract but it would not be patent

infringement because the sale was authorized, the patent

monopoly ends and only contract principles control

thereafter.


Mr. Hungar.

Mr. Phillips.

ORAL ARGUMENT OF CARTER G. PHILLIPS

ON BEHALF OF THE RESPONDENT

26




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


MR. PHILLIPS: Thank you, Mr. Chief Justice,

and may it please the Court:

Justice Souter, I want to go to your

question, because, frankly, I think it is the key to the

entirety of this case. And that is, what is the "it"

that we are talking about? And what's absolutely

critical here is, yes, there was -- you know, this is

the first sale doctrine. It's easy to call it

patent-exhaustion, but the truth is it's the first sale

doctrine.

And the question is, what was sold here?

And the only sale that was involved here was the

chipsets. And there is a completely separate patent

that deals with the rest of the system and that deals

with the method. And nothing -- and this is the key

point of this. The exhaustion doctrine only goes as far

as the sale.

CHIEF JUSTICE ROBERTS: Well, but there's

nothing to do with these chipsets other than use them in

the computers. I mean, you don't put them on your

shelf. They're not good for anything other than using

in the computer. So saying there's a separate patent

for how you use them with the other systems doesn't seem

to be very significant.

MR. PHILLIPS: It would be -- and that's why

27




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


you would ordinarily -- you don't deal with this as an

exhaustion issue. That's why you would deal with this

as an implied licensing issue.

The assumption would be, in the absence of

clear evidence to the contrary, that if I'm selling you

something that only has a single use and that's in a

separate patent, that you in fact are being licensed to

go and use it that way. But what's absolutely critical

in this case is that both the district court and the

court of appeals specifically rejected the notion that

there was any implied license. And it's important to

realize this.

Even as we approach this case, we didn't sue

for any of the activities that predated when the other

side received its notice. We sued only for the

activities post notice. Why? Because at that stage it

was absolutely clear that there was no implied license

any longer and there's no basis for expanding the

exhaustion doctrine to try to fill that void.

The exhaustion doctrine ought to be retained

as a very narrow first sale doctrine, because it doesn't

have any congressional support or approval at this

point. It is a logical way of proceeding. It protects

people against being surprised when they purchase a

particular product. But to go beyond that and to say

28




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


that simply because that sale, that particular product

is, quote, an "essential feature" of a separate patent

and therefore you have now exhausted the rights to that

second patent seems to me a stretch that --

JUSTICE BREYER: Well, there's a reason, I

guess, that would be so. Imagine that I want to buy

some bicycle pedals, so I go to the bicycle shop. These

are fabulous pedals. The inventor has licensed somebody

to make them, and he sold them to the shop, make and

sell them. He sold them to the shop. I go buy the

pedals. I put it in my bicycle. I start pedaling down

the road.

Now, we don't want 19 patent inspectors

chasing me or all of the other companies and there are

many doctrines in the law designed to stop that. One is

the equitable servitudes on chattel. Another is the

exhaustion of a patent. And now you talk about implied

license.

I would say, why does it make that much

difference? What we're talking about here is whether

after those pedals are sold to me under an agreement

that the patent -- you know, you have a right to sell

them to me -- why can't I look at this as saying that

patent is exhausted, the patent on the pedals and the

patent for those bicycles insofar as that patent for the

29




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


bicycles says I have a patent on inserting the pedal

into a bicycle.

Call it exhaustion, call it implied license.

Who cares?

MR. PHILLIPS: I don't have any problem with

your hypothetical because it's not this case. Your

hypothetical deals with the situation of what would have

happened if you had bought the chip. Would we be in a

position to say, even though you bought the chip, we

nevertheless want to retain some right to come out -- to

come after you claiming we still have a patent in that

chip? And the answer is no. We exhausted -- that was

exhausted by the sale of the chip.

The question is if you buy a pedal, can you

then take that pedal that was designed for a bicycle,

put it into a Stair Master --

JUSTICE BREYER: Ah, but I thought --

MR. PHILLIPS: -- patent in the Stair

Master --

JUSTICE BREYER: Yes. Of course, I think

the answer to that is no, probably no, but, but, but,

but. Now you can clarify this because I may be off on a

wrong track. I thought we're talking about using the

sold item in those mechanisms which account for

virtually almost the only logical use of the sold item.

30




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


Thus, if you took the bicycle blanks -- not the bicycle

blanks; they are eyeglass blanks. I'm mixed up between

bicycles and eyeglasses, there we are.

But if you took the eyeglass blanks and you

use them for the purpose of growing plants instead of

inserting them into eyeglasses, I guess we'd have had a

different case.

MR. PHILLIPS: Right.

JUSTICE BREYER: And I take it here they are

using those chips in those mechanisms that the chips are

almost exclusively designed for and there isn't much

else to use them for. Am I right or wrong?

MR. PHILLIPS: That is true. But the -- but

the point here is that that's not the relevant

distinction. It's not whether or not this is in some

sense an essential use. What this Court said in Univis

is that this would be a very -- that would have been a

very different case if there had been a separate patent

on the grinding and finishing of those lenses. And that

is precisely our case. There is a separate patent when

you take those components and you then put them into our

separate system.

And from my perspective, Your Honor, the

better way to analyze this is not as a question of

exhaustion. Let's keep the exhaustion doctrine where it

31




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


fits. It's a first sale component. You buy it, you

exhaust. Let's use the implied licensing as the

mechanism for dealing with related patents.

But the beauty of that in this case,

obviously, is that -- is that the implied license in

this case the courts below have flatly said doesn't

exist. And it goes to the point that you made, Justice

Breyer, as well when you said, you know, I buy this and

I sort of assume that I'm going to be able to use it in

a particular way. These -- this is a $10 billion

company that at the time they bought these components,

these chips, received explicit and specific notice that

the one thing they could not do was use these chips to

build new systems and then sell those systems,

obviously, beyond -- you know, under a completely

separate patent.

CHIEF JUSTICE ROBERTS: Mr. Phillips.

MR. PHILLIPS: So it's not as though they

didn't know what they were getting when they bought it.

They bought cheap chips and turned them into $2,000

laptops because they didn't --

CHIEF JUSTICE ROBERTS: Mr. Phillips?

MR. PHILLIPS: Yes, Your Honor.

CHIEF JUSTICE ROBERTS: What in the world

does clause 3.8 of the license mean? It says,

32




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


"notwithstanding anything to the contrary in this

agreement, the parties agree that nothing herein shall

in any way limit or alter the effect of patent

exhaustion that would otherwise apply when a party

hereto sells any of its licensed products."

In other words, the patent exhaustion

doctrine may not apply for all the reasons that we've

been talking about, but it applies in the way it would

apply if we just sold these licensed products. That

seems to me to give away everything you're talking

about.

MR. PHILLIPS: No. Because that -- that

depends on the scope of the patent exhaustion doctrine.

If the patent exhaustion doctrine is limited to the sale

of the specific product -- let's for instance assume for

a moment that what in fact happened was that Intel sold

the system, rather than the chips. Then that would --

that would exhaust the patent doctrine.

Now, you know, the question is -- and here

there is a disconnect in some respects between the

Mallinckrodt decision in the Federal Circuit and some of

this Court's previous decisions on to the extent to

which you can condition a sale, and I think in some ways

that language may have been given up what rights we

might have been able to assert under Mallinckrodt on a

33




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


somewhat broader basis. But I don't think it can be

read any further than that, and it certainly -- and the

key to this is it certainly doesn't in any way waive our

rights, you know, as an implied license matter, because

that's -- specifically what both the district court and

the court of appeals held is there is no implied license

in this particular context, and so therefore for them to

prevail they have to expand the patent exhaustion

doctrine or the first sale doctrine beyond the first

sale; and that I submit to you is something that's

simply not appropriate.

JUSTICE STEVENS: Am I correct in

understanding that you do not defend the Mallinckrodt

decision?

MR. PHILLIPS: I do not defend the

Mallinckrodt decision, Justice Stevens, and clearly I

don't believe I have to. All I need to do is have this

Court recognize that the central limiting feature of

Univis was the fact that it was all one patent and that

all you were doing was fulfilling the rights that had

been provided for you in that single patent, and that

that that's fundamentally -- and that the Court

recognized that if there were a separate patent involved

and you were trying to enforce those rights, that would

be a completely different matter.

34




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


JUSTICE STEVENS: I understand you also do

not challenge the proposition that the sale by the

licensee in this case should be treated as a first sale.

MR. PHILLIPS: Right, the chip.

JUSTICE STEVENS: Yes.

MR. PHILLIPS: Absolutely. There's no

question about that. We have never challenged that, and

I think the point I made earlier is also valid. We

didn't challenge their use, their otherwise infringement

of our system until we gave them notice; and at that

point we said there is no implied license, because I do

think, Mr. Chief Justice, it's a fair point, and it's

the same point Justice Breyer made, which is, look, if

you buy something and you think this is your normal

assumption that you're going to use it in a particular

way, that ought to be protected. I think that's

ordinary kind of contract expectation rules. But the

point here is that the language of this notice could not

have been plainer to anyone --

JUSTICE BREYER: All right, now if it should

be protected -- and here I'm not sure I'm understanding

it, so correct me. Let's suppose we have this contract.

So everything is identical except we've got my bicycle

example in here because I'm more comfortable with that.

I know how to ride a bicycle and I don't know how to

35




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


work the chips. So what I do --

MR. PHILLIPS: Me too.

JUSTICE BREYER: But you see the analogy I'm

making.


JUSTICE BREYER: So what I do I go to the

shop and I buy this, this mechanism with the pedals on

it, and then I insert it in my bicycle. Now, actually I

need help in doing that, but I do it. Okay. Now I

start pedaling off, and now what is it for all these

things here that would stop that original inventor from

catching me and hauling me into court, and say, what

you've done, Breyer, is you've put my -- my mechanism

here in this bicycle and I happen to have a patent on

the system. And now you start talking to me about,

well, the patent was exhausted on the bicycle --

MR. PHILLIPS: Pedal.

JUSTICE BREYER: -- pedals, but not on the

system.


JUSTICE BREYER: And you agree that

shouldn't happen.


JUSTICE BREYER: But if I follow you and I

write an opinion just for you, what stops it from

36




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24 --

25


happening?

MR. PHILLIPS: Well, in that -- in that

particular context, in the absence of relatively clear

notice, I think it would be quite reasonable to

potentially find that there was an implied license to

use it under those circumstances.

JUSTICE SOUTER: What --

JUSTICE BREYER: Then why isn't it in your

case?

JUSTICE SOUTER: I'm sorry. No. I didn't

mean to interrupt you. It's your --

JUSTICE BREYER: Why doesn't it mean that?

Why isn't it in your case equally?

MR. PHILLIPS: Because the courts below

specifically analyzed whether there was -- -

JUSTICE BREYER: You mean that they just got

it all wrong? You mean it should be that they got it

wrong?

MR. PHILLIPS: No, no. They got it right

because there was very specific and explicit notice

provided to the purchaser at the time of the purchase

that, while this clearly gives you the right to use this

particular product, what it doesn't give you the right

JUSTICE BREYER: Oh, so if I go in the

37




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


bicycle shop, I go in the bicycle shop and I buy the

pedals and then they give me, you know, one of these

pieces of paper that has all of the 42,000 words on it

and there in these 42,000 words it says, and now you are

put on notice that once you put it in your bicycle and

you pedal away, they're going to get you and you're

going to be hauled into Patent Court, then -- then

that's okay?

MR. PHILLIPS: Well, Justice Breyer, we can

quarrel about sort of the nature of the notice and what

notice is adequate to do that, but the basic point here,

which I think is indisputable, is that, one, the notice

here is quite clear. It's one page. It's very

specific. These are very sophisticated parties and they

understood that they were not obtaining an implied

license by purchasing the chips rather than going out

and purchasing the systems.

JUSTICE SOUTER: Okay. But assuming a

simple notice, the answer to his bicycle hypo is yes,

they can chase me down the road.

MR. PHILLIPS: Oh, to be sure. If I have

separate patent on the bicycle, I'm entitled to stop

people from using that particular bicycle. Now,

generally speaking, to be sure, you don't go after the

consumers because most people who are in the business of

38




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


manufacturing don't develop a really good following by

suing their ultimate consumers. So what you do is you

find the people who are in the middle, the middle spot,

who are actually doing the manufacturing and who are in

fact violating the patent, and that's who you go after.

And in this context --

JUSTICE STEVENS: That's other --

MR. PHILLIPS: Precisely -- I'm sorry.

JUSTICE STEVENS: Is the reason that there's

no implied license here, one, because you got the

notice, or two, because the component has uses in other

kinds of methods than the patented method?

MR. PHILLIPS: I think the better answer is

one, because they had clear notice.

JUSTICE STEVENS: You think the notice on

that to defeat the implied --

MR. PHILLIPS: Right. I think there is an

argument as to whether there might be non-infringing

uses. We disagree about that. But I think the better

argument is one.

JUSTICE STEVENS: The court below did not

rely on the fact that there might be non-infringing

uses, did it?

MR. PHILLIPS: No. The court below did not

rely on that.

39




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


JUSTICE STEVENS: It relied on the notice.

MR. PHILLIPS: Right, right. Well, I mean,

the court of appeals had a much -- it was a much easier

case, frankly --

JUSTICE STEVENS: It seems to be kind of an

unusual answer to the implied license argument, because

normally it doesn't depend on what the patentee decides

to say somewhere down - down the line. That's kind of

an unusual reason for not finding an implied license, I

think.

MR. PHILLIPS: Well, I mean I think the

district court just said, look, that -- you know,

ordinarily you would say, if you're buying something

with the understanding that you're going to -- that its

primary or maybe exclusive use will be in a particular

way, that that would be a reasonable implied -- you

could imply a license by those facts alone. Then the

question is whether or not that implication has in some

sense been clearly overridden by the conduct of the

parties under the circumstances.

JUSTICE SCALIA: But it's subsequent

conduct. If the implied license occurred, it didn't

occur at the time of the sale; and it couldn't be -- it

couldn't be negated at the time of the sale. If it

occurred, it occurred at the time of the license, right,

40




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19 --

20

21

22

23

24

25


from the patentee of the patent at stake.

MR. PHILLIPS: Right. And once he received

-- and once the --

JUSTICE SCALIA: And there was no such

notice there. There was no such statement there that

this does not -- you don't have the right to sell this

for its normal uses?

MR. PHILLIPS: No, but every -- every sale

after --

JUSTICE SCALIA: Yeah, but the horse is out

of the barn.

MR. PHILLIPS: No, no, but that just means

that the patent --

JUSTICE SCALIA: That -- I mean if both

parties -- if both parties agree to that notice, I guess

that would be something else. Did both parties agree to

that notice?

MR. PHILLIPS: Well, you mean both Intel and

JUSTICE SCALIA: Yes.

MR. PHILLIPS: Oh, yes. Both Intel and --

and Quanta clearly agreed -- I mean, both Intel and and

LG clearly agreed to that, if that's what you're asking

about. But the -- but the point here is that the notice

was prior to the sale.

41




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


JUSTICE SCALIA: Yes, but that -- that

doesn't matter to me. What matters to me is whether it

was prior to the license. If there was an implied

license here, it occurred at the time that the --

MR. PHILLIPS: Of the sale.

JUSTICE SCALIA: No. No.

MR. PHILLIPS: Well, when else -- an implied

license clearly can't extend to the ultimate purchaser

until the ultimate purchaser gives something.

JUSTICE SCALIA: You give the licensee --

you implicitly give the licensee the right to permit the

people to whom he sells the product to use the license.


JUSTICE SCALIA: But it's given to the

licensee surely.

MR. PHILLIPS: But we clearly didn't do

that. That -- I mean that -- the two court rulings

clearly resolved that.

JUSTICE SCALIA: Unless it's implicit,

unless it's implicit when you sell a -- a bicycle pedal

that can only be used in bicycles.

MR. PHILLIPS: Right. But if I say at the

time, but you cannot use it in a bicycle because it has

a separate patent, and therefore" --

JUSTICE SCALIA: Did you say that?

42




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25 --


MR. PHILLIPS: Yes, that's exactly what the

notice says.

CHIEF JUSTICE ROBERTS: That's what the

notice says.

JUSTICE SCALIA: That's the notice. That's

later. That's downstream. That's after the license.

That's at the time of the sale.

MR. PHILLIPS: But that goes to clear -- I

mean, but that goes to the clear understanding -- I mean

the question is -- if the question is did Intel have the

right to sell the system as a system, the answer is yes.

It was licensed to do that. But it didn't sell the

system as a system. It sold the components of the

system. And then the question is, does it have as a

consequence of that some kind of an implied license to

do this? And the courts below both specifically held

no.

And I think the other thing about this,

Justice Scalia, is that this was not an issue in this

case. Both courts below held that that's not the

question presented. In order for the Petitioner in this

case to prevail, they have to demonstrate that this is

an exhaustion concept.

JUSTICE SOUTER: Yes, because they're saying

43




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


MR. PHILLIPS: That's the question presented

in the petition.

JUSTICE SOUTER: They're saying the reason

they have done so is that the following distinction is

significant. There's a distinction between a license

that says you can't sell this unless certain conditions

are satisfied and, on the other hand, a license that

says you can sell this, but if you sell it to a buyer

who is described by conditions A and B, you've got to

tell the buyer that we're going to make a claim against

A and B. And the ones -- in the first example, there is

a limit to the right to sell. In the second example,

there is no limit on the right to sell, but there's a

warning about what we're going to do if you do sell

under certain conditions. And I think they're saying

that unless you have a contract of the former sort which

limits your right to sell, then when you do sell,

exhaustion applies and whatever you may do against the

ultimate buyer is -- is a contract problem or what-not,

but it's not -- it's not a matter of patent.

MR. PHILLIPS: Right, and the problem --

JUSTICE SOUTER: Number one, do you think I

am being correct in characterizing, describing the

distinction they make?

MR. PHILLIPS: I think so.

44




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


JUSTICE SOUTER: And B, if I am, why isn't

that distinction an answer to your argument?

MR. PHILLIPS: Because, because it ignores

the fact that there are separate patents involved in

this case. There is no question that -- there is an

issue. I mean I don't think there's a question that --

you know, as to how far you can go down the road in

trying to condition a particular sale. I thought this

Court may have resolved this already. Mallinckrodt

leaves that issue open, but that's not -- that's not the

question.

The issue here is if I sell to you, Justice

Souter, a particular chip, whether I condition it or

not, I think that's -- to me that's unenforceable. But

the question is, can you then take that chip and use it

to violate a separate patent? And the reason you know

that it's not exhaustion --

JUSTICE SOUTER: No. I understand where

you're going. So then what you're saying, I guess, is

that the real issue does not involve this distinction

between a --


JUSTICE SOUTER: -- a limited right and a

right --

MR. PHILLIPS: Exactly.

45




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


later.

JUSTICE SOUTER: -- to go after people

MR. PHILLIPS: That's not the issue in this

case.

JUSTICE SOUTER: What it -- what it involves

is the statement that they make that if you license the

manufacture, use, and sale of a particular component and

that particular component has only one reasonable use --


JUSTICE SOUTER: -- then you have

necessarily licensed them to sell with that ultimate use

in mind, and when you do -- when you license them to

sell, the patent-exhaustion doctrine attaches to any

patent right that you may have, whether you call it

system --


JUSTICE SOUTER: -- or whether you call it

component.


JUSTICE SOUTER: And you are saying that

argument is no good because that, in fact, is an implied

license argument, and there were findings that there was

no implied license.

MR. PHILLIPS: That's --

JUSTICE SOUTER: So I understand your

46




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


position.

MR. PHILLIPS: That is correct, Justice

Souter.

JUSTICE SOUTER: Okay.

MR. PHILLIPS: And let me further --

JUSTICE BREYER: Then explain -- now this

you might know because it's just following up on what

Justice Souter said better than I did. I think from

these briefs I've gotten the impression that at least

some people think that where you invent a component,

say, like the bicycle pedals, and it really has only one

use, which is to go into a bicycle, it's the easiest

thing in the world to get a patent not just on that

component but to also get a patent on the system, which

is called handlebars, body, and pedals.

And since that's just a drafting question,

all that we would do by finding in your favor is to

destroy the exhaustion doctrine, because all that would

happen, if it hasn't happened already, is these

brilliant patent lawyers, and they don't even -- they

can be great patent lawyers, not just fine lawyers, and

just draft it the way I said and that's the end of the

exhaustion doctrine. And that's why it is preferable to

say it is exhausted. What is exhausted? One, the

patent on this component and, two, the patent on any

47




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20 --

21

22

23

24

25


system involving this component where that system is the

only reasonable use of the component, rather than using

the terminology "implied license."

Now, I think that's an argument that's being

made in some of these briefs, and if so I'd like to you

reply.

MR. PHILLIPS: Well, I think that clearly

understates the role of the PTO in granting a separate

patent. I mean, this is not -- these are not things you

pick up at the corner drugstore. You have to justify

them. And if you look at Section 282, "a patent shall

be presumed valid," each claim shall be presumed valid

independently of the validity of other claims. And

there's an independence that's embedded in this entire

scheme. If it's true that the PTO has in fact granted

patent rights on something that's fundamentally not

different from the other -- from some other patent, the

solution to that is a validity challenge. And candidly,

I think that's exactly what all of those arguments are

CHIEF JUSTICE ROBERTS: Well, then --

MR. PHILLIPS: -- is patent validity

challenges.

CHIEF JUSTICE ROBERTS: That argument didn't

prevail last year in the KSR case, right? I mean, we're

48




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


-- we've had experience with the Patent Office where it

tends to grant patents a lot more liberally than we

would enforce under the patent law.

MR. PHILLIPS: Right, but all -- I'm not --

I'm not particularly criticizing the PTO. What I'm

saying is that the statutory scheme presumes that there

is a separateness when a patent is issued and, therefore

-- and which is why -- again, the first -- there's no

reason to go to an expansion of the first-sale doctrine

in order to deal with the kinds of problems you have

here because in general -- in general you can deal with

it as a matter of implied license, but that issue has

been resolved adverse to the other side in this case,

and there's no reason to sort of fill in that void.

JUSTICE SCALIA: Mr. Phillips, when you say

that was resolved adversely, you say there was a finding

of no implied license.

MR. PHILLIPS: That's correct.

JUSTICE SCALIA: Was that a finding of no

implied license from LGE to Intel or no implied license

from Intel to the buyers?

MR. PHILLIPS: From Intel to the buyers.

CHIEF JUSTICE ROBERTS: Mr. Phillips --

JUSTICE SCALIA: Is that the crucial -- is

that the crucial step?

49




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


MR. PHILLIPS: Yes. That's -- that's the

critical component of this case.

JUSTICE SCALIA: If that --

MR. PHILLIPS: The buyer would have to

assert exhaustion.

JUSTICE SCALIA: If that was an implied

license from LGE to Intel, then Intel would have

authority to sell -- to sell these things for their --

for their use.

MR. PHILLIPS: To be sure, Intel has the

authority to sell these things, and it has the authority

to sell -- it depends on what the things are. It has

the authority to sell the chips. It has the authority

to sell the systems, but what it doesn't have the

authority to do is to allow somebody downstream to take

the chips and put them into the separately patented

systems, and the -- and the people downstream know that

they don't have that entitlement.

Justice Souter, to me the patent-exhaustion

doctrine is --

JUSTICE SCALIA: I think the exhaustion, if

Intel got -- if Intel got -- I'm sorry. Yes, if Intel

got an implied license to the system from LGE when it

sold those products, it seems to me the exhaustion

doctrine would take hold and would -- would apply to

50




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


that implied license just as it applied to the -- to the

license of the chips.

MR. PHILLIPS: I think the answer to that is

it shouldn't, that the exhaustion doctrine should be

retained as a first-sale doctrine alone. That's the way

it's always been understood for 150 years. And to

expand it this way is to undermine the rights of -- in

the separate patents.

And now I'll try to make the point I wanted

to make to Justice Souter. Read the reply brief: A

sale authorized by one patentee does not exhaust patents

held by a different patentee. So we wouldn't even be in

this case if it turned out that we didn't just -- we

didn't happen to have all of these rights in the first

place. I mean, if they bought the chips and if Wang had

held on to some portion of the system patent in this

case, there is no question that Wang would have the full

opportunity -- that sale didn't exhaust their rights in

that patent.

CHIEF JUSTICE ROBERTS: And the way you

achieve that result is to condition the sale. What

you're trying to do is expand what you get under a

condition to what you get under a notice. And the

reason that troubles me is because if you had imposed a

condition on the sale, Intel wouldn't have paid you as

51




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


much for it. But you say, all right, we'll take the

money because -- additional money because there's no

condition, but we want to achieve the same result

because of the notice.

MR. PHILLIPS: I mean there can't -- there's

no serious basis for doubting what Intel knew precisely

what it was getting in this. It was getting peace on

both sides of the aisle in terms of litigation, and it

knew that there were separate patents here and that when

it sold the chips it would certainly be entitled to

assume that there would be exhaustion. That's the

provision you read. But when it sells the chips, it

didn't know and it specifically gave notice that it

recognized that that doesn't remotely say what the right

answer is with respect to the systems and with respect

to the methods. And that to me, Mr. Chief Justice, is

the fundamental distinction.

CHIEF JUSTICE ROBERTS: Well, they're happy

with that because the notice says you can't -- you can

only use this with Intel products. So they're happy

with that solution as well.

MR. PHILLIPS: Well, that's part of the

reason why it was negotiated in that way. But I mean

that is -- so far as I know, there is no particular

issue by reference to that particular limitation.

52




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


The reality is if we entered into the same

agreement with AMD, which is one of the other

chipmakers, I am sure they would ask for the same

restriction on it: That you could only do it with AMD

products, as well. I mean that doesn't have anything to

do with the nature of the underlying problem that we are

confronting in this particular context.

It seems to me the fundamental issue here is

they have a limited right when they purchase that

product. They didn't get the right to make other

products. They didn't get the right to breach or

infringe a completely separate patent. And that is the

basis on which the judgment of the Court of Appeals,

which is all that is before the Court, should be

affirmed.

JUSTICE STEVENS: Before you sit down, to

what extent do you think the Court of Appeals has

already adopted your theory of the case?

MR. PHILLIPS: Well, I mean they recognized

specifically that these are completely separate. That

the claims that are at issue here are different from the

amounts that were -- from the products that were, in

fact, purchased. So the elements, the constituent

elements, they have clearly embraced. The conclusion,

they have clearly not embraced.

53




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


JUSTICE STEVENS: They did not get your

theory of the case out of my reading of their opinion.

MR. PHILLIPS: Well, my --

JUSTICE SOUTER: Isn't the difference

between "conditional sale" and "limited sale" -- you are

saying they used the word "conditional." You are saying

it was a "limited sale" that only -- a "limited

license." It only licensed Patents A and B and not

Patents C and D.

MR. PHILLIPS: Well, what I was actually

saying is that if you read the language in 4a and 5a

where it says: The patents asserted by LGE do not cover

the products licensed to, or sold by, Intel. They have

to be combined with additional components. And then in

5a they say: Notably, the sale involved a component of

the inserted, patented invention, not the entire

patented system.

So they recognize, to my mind, what are the

predicate factual bases from which I say the "exhaustion

doctrine" shouldn't have been -- shouldn't have been

triggered. But, to be sure, they -- they -- it was a

much easier task for them because they -- as far as they

are concerned, all kinds of conditions are permissible.

And we don't need that in order to win this case. I'm

not asking the Court to embrace that particular

54




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


approach.

If there are no other questions, I would ask

you to affirm the decision.


Mr. Phillips. Ms. Mahoney, you have four minutes

remaining.

REBUTTAL ARGUMENT OF MAUREEN E. MAHONEY

ON BEHALF OF THE PETITIONERS

MS. MAHONEY: I'd like to start by

emphasizing what counsel did not say. He never said

that Intel lacked the authority under the system and

method patents to sell these components. He never said

that. In fact, he said that Intel was released. Why

were they released? This would have been contributory

infringement, otherwise.

The reason they were released was because

they had the authority under this license to sell these

components under the system patent. And that's what the

Federal Circuit acknowledged, and that's what the

district court recognized, and it's never been in

dispute.

Their position is simply that, despite that,

despite express authority to sell these under that

patent -- not just under some other patent, under the

patents at issue here -- that they can enforce

55




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


conditions on post-sale use. And that's what this Court

has never allowed.

Univis is on all fours. They say, well,

that just involved a single patent. Well, as far as

this case is concerned, it just involves a single

patent, too. The whole issue here is whether or not

Quanta's taking of the components and combining them

with some generic things like wires and memory

necessarily infringed under LGE's allegations.

And the district court found that they

would, and that's not in dispute. And what that means

is that, just as in Univis where you had -- the court

finds there were really two products there. It finds

there were two different commodities, the lens blank and

the finished lens.

It says under Miller, the Miller/Tydings

Act, these are two different commodities, and the patent

was only on the finished lens. But, in order to make

that finished lens, you had to -- you had to make a lens

blank that would embody many of the limitations of the

claim. That's exactly what the district court found

happened here.

For this, when Intel manufactured these

chips, the microprocessors and the chipsets, it

manufactured them in a way that embodied many of the

56




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


limitations of the system and method patents that are at

issue here. So, as in the language of Univis, there

they said, well, we are dealing with a product that is

being manufactured in multiple stages.

And during that first stage, while it's true

it wasn't -- it didn't directly infringe because the

lens blank wasn't the patented product, they,

nevertheless, practiced the patent in part. Why?

Because they -- they -- some of the -- while

manufacturing it, they have met some of the limitations

of the claim.

And they said when that lens blank was sold,

that it exhausted the rights of the patent owner to

enforce any conditions, any type of conditions on use or

resale after that sale. And it didn't have to rely on

implied license because of the exhaustion doctrine.

Once there is an authorized sale of a product that is

protected by the patent that covered that final finished

product, exhaustion is triggered.

That's exactly what we have here. And they

said, oh, but you could disclaim that with an agreement.

Well, in Univis there was an agreement. The

purchaser of that lens blank specifically agreed by

contract that it would only use it in certain ways and

only charge certain prices. So they expressly

57




1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25


disclaimed, you know, the idea that they were -- that

they couldn't use it in those ways. And, nevertheless,

this Court found exhaustion.

When the district court found no "implied

license," all the court was saying was, well, under the

Federal Circuit precedent "implied license" is an

"equitable doctrine."

I see my time is finished. Thank you.

CHIEF JUSTICE ROBERTS: Thank you, Ms.

Mahoney. The case is submitted.

(Whereupon, at 11:16 a.m., the case in the

above-entitled matter was submitted.)

58





A able 32:9 33:25above-entitled

1:12 58:12absence 28:4

37:3absolutely 9:20

12:7 16:1327:6 28:8,1735:6

accepted 20:19account 30:24achieve 6:16

51:21 52:3acknowledge

6:15

acknowledged 12:1 55:19

acknowledges 11:20

acquire 7:10act 18:2,2,7,12

56:17activities 28:14

28:16addition 10:8

21:6

additional 8:1552:2 54:14address 19:6adequate 38:11adopted 53:18adverse 49:13adversely 49:16advert 11:7affirm 55:3affirmed 53:15afforded 14:18after-sale 17:18agree 5:17 8:1

25:13 26:7,1333:2 36:2141:15,16

agreed 41:22,2357:23

agreeing 5:19agreement 8:6,7

12:3 21:1 26:629:21 33:253:2 57:21,22

agrees 23:20agriculture 16:1Ah 30:17ahead 14:22aisle 52:8AL 1:4allegations 10:5

10:15 56:9allegedly 3:17

3:21,24allow 50:15allowed 10:22

56:2

alter 33:3AMD 53:2,4amicus 1:20

17:1amounts 53:22analogy 36:3analyze 31:24analyzed 37:15answer 9:13

11:15,16 12:422:14 24:1030:12,21 38:1939:13 40:643:11 45:251:3 52:15

antitrust 21:25anybody 10:23appeals 13:6

17:12 19:520:19 28:1034:6 40:353:13,17

APPEARAN... 1:15

appendix 10:811:20

application 19:24

applied 5:1251:1

applies 9:5 33:8

44:18apply 4:1 9:1

22:7 24:18,2533:4,7,9 50:25

approach 28:1355:1

appropriate 15:3 34:11

approval 28:22area 15:25 18:10argument 1:13

2:2,10 3:3,75:3 11:8,1612:5,14 16:2422:5 26:2439:18,20 40:6

45:2 46:21,2248:4,24 55:7arguments

14:15 48:19article 3:22

13:23 15:2016:10,15,1819:10,19,2022:19 23:3,4,424:6

articles 4:1,413:3,15 14:914:11

asked 4:18asking 26:5

41:23 54:25aspects 18:23assert 33:25

50:5asserted 54:12assume 32:9

33:15 52:11assuming 38:18assumption

17:10 28:435:15

attaches 21:2046:13

attaching 10:919:9

attempt 18:24

attempted 17:18authority 5:6,9

5:14 6:9 8:210:18 11:21,2312:20 15:550:8,11,11,1350:13,15 55:1155:17,23

authorize 10:2312:18

authorized 3:163:19 4:21,215:21 6:20,217:8,10,13,1610:21 12:2515:8 17:6,19

17:24 19:1020:17,25,2521:3,18 22:1822:19 25:22,2326:5,10,1851:11 57:17

authorizing 12:15

available 19:1323:11

avoid 10:17aware 18:18A.B 11:1a.m 1:14 3:2

58:11

B B 44:9,11 45:1

54:8back 22:18bad 6:17barn 41:11bases 54:19

basic 14:4 38:11basis 28:18 34:1

52:6 53:13Bauer 17:14beauty 32:4becoming 15:24behalf 1:16,19

1:22 2:4,6,9,12

3:8 16:2526:25 55:8

believe 34:17better 31:24

39:13,19 47:8beyond 28:25

32:15 34:9bicycle 21:3,5

29:7,7,11 30:230:15 31:1,135:23,25 36:836:14,16 38:138:1,5,19,2238:23 42:20,2347:11,12

bicycles 29:25

30:1 31:342:21big 5:25 22:16

26:4billion 32:10biological 15:25bit 19:15blank 56:14,20

57:7,12,23blanks 31:1,2,2

31:4Bobbs-Merrill

5:4,11body 47:15books 5:15,20

5:20Boston 17:14bought 30:8,9

32:11,19,2051:15

breach 5:1426:17 53:11

Breyer 21:2,1121:15,22 22:1424:10 29:530:17,20 31:932:8 35:13,2036:3,6,13,1836:21,24 37:837:12,16,2538:9 47:6





brief 12:1 22:623:7 51:10

briefs 47:9 48:5brilliant 47:20broader 34:1build 32:14business 38:25buy 29:6,10

30:14 32:1,835:14 36:738:1

buyer 7:6,9,117:14 10:2515:10 24:1,444:8,10,1950:4

buyers 7:1 49:2149:22buying 40:13

C C 2:1 3:1 54:9call 27:8 30:3,3

46:14,17called 47:15candidly 48:18cared 6:12cares 30:4CARTER 1:22

2:8 26:24case 3:4,18,20

5:8,12,19,256:5 9:13,2310:14 11:1813:1,8 15:4,1716:16 20:15,1925:9,19 27:528:9,13 30:631:7,18,20

32:4,6 35:337:9,13 40:443:20,22 45:546:4 48:2549:13 50:251:13,17 53:1854:2,24 56:558:10,11

cases 3:11 7:1610:25 15:14,1515:22 16:1217:13,16 18:1419:1 23:3

catching 36:12caused 10:11central 34:18century 19:2certain 5:20

18:23 23:2044:6,15 57:2457:25

certainly 8:2212:14 14:1121:9 34:2,3

52:10chain 24:5,8challenge 35:2,9

48:18challenged 12:6

35:7challenges 48:23chances 8:13change 18:23,24characterizing

44:23charge 57:25charts 10:5chase 38:20chasing 29:14chattel 21:13

29:16cheap 32:20check 21:5Chief 3:3,9 5:24

6:14,24 8:109:3,16 16:2117:3 19:11,2320:8,13 22:422:21 23:6,1623:18 24:3,1226:21 27:1,1832:17,22,2435:12 43:348:21,24 49:2351:20 52:16,18

55:4 58:9chip 30:8,9,12

30:13 35:445:13,15

chipmakers 53:3

chips 10:1031:10,10 32:1232:13,20 33:1736:1 38:1650:13,16 51:251:15 52:10,1256:24

chipsets 27:1327:19 56:24

Circuit 3:18

9:17,19,2411:20 23:133:21 55:1958:6

Circuit's 8:1310:20 19:7

circumstance 7:25

circumstances 7:6 24:1725:16 37:640:20

cite 9:24cited 13:8claim 10:5 44:10

48:12 56:2157:11

claiming 30:11claims 3:14 10:7

48:13 53:21clarify 30:22clause 32:25clear 8:20,22

9:14,15,17,189:19 19:125:21 26:2,328:5,17 37:338:13 39:1443:8,9

clearly 34:1637:22 40:19

41:22,23 42:842:16,18 48:753:24,25

codification 18:19

codified 18:1,1318:17

collect 14:16,2215:3,9

combination 4:11

combined 54:14combining 56:7come 25:9 30:10

30:11comfortable

35:24commodities 56:14,17

companies 21:10 29:14

company 32:11complete 16:9

16:10,17completely

11:17 15:1427:13 32:1534:25 53:12,20

component 11:10,13 12:912:11,12,15,1712:19,19 32:139:11 46:7,846:18 47:10,1447:25 48:1,250:2 54:15

components 3:19 4:14 10:110:9 11:2112:13 31:2132:11 43:1354:14 55:12,1856:7

computer 1:33:4 27:22

computers 10:13 27:20

concept 43:23concerned 54:23

56:5conclusion

53:24condition 4:23

25:11,17,2033:23 45:8,1351:21,23,2552:3

conditional 54:554:6

conditioning 5:6conditions 44:6

44:9,15 54:2356:1 57:14,14

conduct 40:1940:22confess 13:6confronting

53:7confusion 9:6,6Congress 14:19

18:1,5,21congressional

28:22consequence

43:15consequences

7:5 26:3constituent

53:23constituted 13:7consumers

38:25 39:2context 18:9

34:7 37:3 39:653:7

contract 6:17:15 8:12,188:20,23 9:811:5,19 19:1219:15 21:7,1522:2,16 24:1024:13 25:126:17,19 35:1735:22 44:16,19





57:24contractual

23:11,23 25:6contract-law

21:25contrary 8:25

22:11 24:628:5 33:1

contributorily 4:4 10:1612:12 13:2014:23 15:2,6,916:7

contributory 4:2 6:10 7:711:25 12:2

13:2 14:1924:8 55:14control 7:21

10:24 11:416:4 26:19

controlling 9:23copyright 5:12

5:19 18:2,6,8corner 48:10correct 6:6 9:22

10:15 17:1224:21 25:2,326:11 34:1235:22 44:2347:2 49:18

correctly 9:22counsel 55:10count 5:21course 6:9 9:24

16:6 20:1830:20

court 1:1,133:10,13 5:49:13,19,22,2510:4 13:614:20 15:1917:4,5,7,12,1617:20 18:1219:5,6,1720:19 27:228:9,10 31:16

34:5,6,18,2236:12 38:739:21,24 40:340:12 42:1745:9 53:13,1453:17 54:2555:20 56:1,1056:12,21 58:358:4,5

courts 5:2 32:637:14 43:16,20

Court's 3:117:16 8:22 9:79:12 10:2515:14 17:1318:14 19:1

33:22cover 54:12covered 57:18criteria 3:12,22

12:24critical 24:4

27:7 28:8 50:2criticizing 49:5crucial 49:24,25cured 8:18curiae 1:20 17:1

D D 3:1 54:9deal 5:25 28:1,2

49:10,11dealing 32:3

57:3deals 27:14,14

30:7decide 9:7decided 6:11decides 40:7

decision 9:1233:21 34:14,1655:3

decisions 17:1333:22

deemed 19:18deeply 6:12default 17:10

defeat 39:16defend 34:13,15define 13:3 18:8definition 14:10

16:17 20:25definitional 17:9delimits 17:9demarcate 11:3demonstrate

43:22Department

1:19depend 40:7depends 6:1

19:15 33:1350:12

deprives 14:15Deputy 1:18described 44:9describing

44:23design 10:12designed 29:15

30:15 31:11despite 15:7,8

55:22,23destroy 47:18develop 39:1Dick 11:1difference 5:5

22:16 29:2054:4

different 6:2119:18 31:7,1834:25 48:1751:12 53:2156:14,17

differently 16:525:9

directly 4:1 57:6disagree 39:19discarded 17:11disclaim 57:21disclaimed 58:1disconnect

33:20dismissed 3:14

dispute 3:18 6:810:19 55:2156:11

dissatisfaction 18:22

distinction 14:314:5 25:2231:15 44:4,544:24 45:2,2052:17

district 3:139:13,19,22,2510:4 28:9 34:540:12 55:2056:10,21 58:4

doctrine 4:8 9:5

9:14 11:2 17:817:22 18:1,818:20,25 19:819:25 21:12,1622:7 23:224:25 27:8,1027:16 28:19,2028:21 31:2533:7,13,14,1834:9,9 46:1347:18,23 49:950:20,25 51:451:5 54:2057:16 58:7

doctrines 21:2521:25 29:15

doing 7:5 34:2036:9 39:4

doubting 52:6downstream 6:4

15:23 25:543:6 50:15,17

draft 21:2447:22

drafted 8:18drafting 47:16drugstore 48:10D.C 1:9,16,19

1:22

E

E 1:16 2:1,3,113:1,1,7 55:7

earlier 22:1035:8

easier 8:1413:17 40:354:22

easiest 47:12easy 27:8effect 18:25 19:2

33:3effectively 13:16Electronics 1:7

3:5elements 53:23

53:24

embedded 48:14embodied 15:156:25

embody 56:20embrace 54:25embraced 53:24

53:25emphasizing

55:10employing

17:22encumbered

8:15ends 26:19enforce 17:23

26:13 34:2449:3 55:2557:14

enforceable 21:17

enter 13:12entered 4:12

53:1enters 13:13entire 48:14

54:16entirety 27:5entitled 38:22

52:10entitlement

50:18





equally 37:13equipment

11:10,13equitable 21:13

29:16 58:7erroneously

17:8ESQ 1:16,18,22

2:3,5,8,11essential 29:2

31:16essentially 19:4

19:9ET 1:4everybody 9:21evidence 28:5

exact 15:16exactly 6:1 8:119:9 10:25 15:422:3 24:3 43:145:25 48:1956:21 57:20

example 6:2435:24 44:11,12

exception 11:1exclusive 40:15exclusively

25:14 31:11exhaust 32:2

33:18 51:11,18exhausted 13:16

13:18,22 14:1029:3,24 30:1230:13 36:1647:24,24 57:13

exhaustion 3:113:12 4:8 9:111:2 13:8 16:217:16 18:2019:21 22:2524:18,24 27:1628:2,19,2029:17 30:331:25,25 33:433:6,13,1434:8 43:2344:18 45:17

47:18,23 50:550:21,24 51:452:11 54:1957:16,19 58:3

exhausts 19:20exist 32:7expand 34:8

51:7,22expanding

28:18expansion 49:9expectation

35:17experience 49:1explain 7:5,18

18:4 47:6

explicit 32:1237:20explicitly 19:6,6

20:20 21:1exposed 6:13express 17:17

18:21 55:23expressly 11:7

57:25extend 6:4 42:8extension 15:18extent 33:22

53:17eyeglass 31:2,4eyeglasses 31:3

31:6

F fabulous 29:8fact 8:1 12:1,5

15:8 21:925:18 28:733:16 34:19

39:5,22 45:446:21 48:1553:23 55:13

facts 3:15 40:17factual 54:19Failure 10:12fair 35:12falls 3:23

far 27:16 45:752:24 54:2256:4

favor 47:17feature 29:2

34:18Federal 3:18

8:13 9:17,189:24 10:2011:20 19:723:1 33:2155:19 58:6

fill 28:19 49:14final 57:18find 37:5 39:3finding 40:9

47:17 49:16,19findings 46:22finds 56:13,13fine 9:3 23:21

47:21finish 26:14finished 16:15

56:15,18,1957:18 58:8

finishing 31:19first 3:4,15

12:24 27:8,928:21 32:134:9,9 35:344:11 49:851:14 57:5

first-sale 18:2549:9 51:5

fits 32:1flatly 32:6focused 14:11follow 10:12

17:20 36:24following 39:1

44:4 47:7footnote 12:1former 44:16forth 16:1found 3:14 5:2

7:14 9:25 18:956:10,21 58:3

58:4four 55:5fours 56:3frankly 27:4

40:4friend 20:14fulfilling 34:20full 10:18 11:21

14:16 51:17functionality

10:3fundamental

52:17 53:8fundamentally

34:22 48:16further 6:4 7:21

9:10 34:2 47:5G

G 1:18,22 2:5,83:1 16:2426:24

general 1:18 4:95:8 49:11,11

generally 18:1538:24

generic 10:1056:8

getting 32:1952:7,7

GINSBURG 6:23 7:1817:25 18:16

give 5:13,176:23 15:533:10 37:2338:2 42:10,11

given 4:13 8:220:3 24:7

33:24 42:14gives 37:22 42:9giving 12:20

25:19go 14:22 27:3

28:8,25 29:729:10 36:637:25 38:1,24

39:5 45:7 46:147:12 49:9

goes 22:18 27:1632:7 43:8,9

going 5:7,10,156:13 8:2,11,139:7 12:22 14:921:11 32:935:15 38:6,738:16 40:1444:10,14 45:19

good 27:21 39:146:21

goods 7:10gotten 15:18

47:9

grant 17:10 49:2granted 11:1548:15

granting 13:748:8

great 9:6 47:21grinding 31:19growing 31:5guess 9:17 29:6

31:6 41:1545:19

H hand 44:7handlebars

47:15happen 4:16

12:23 36:14,2247:19 51:14

happened 15:430:8 33:1647:19 56:22

happening 37:1

happens 25:3happy 52:18,20hauled 38:7hauling 36:12hear 3:3held 17:5,16

34:6 43:16,2051:12,16





help 36:9hereto 33:5history 18:11,19hold 50:25holds 3:25 16:6

16:13,14home 5:10Honor 4:11 5:3

6:19 9:1113:11 18:419:14 22:1726:15 31:2332:23

hook 8:4horse 41:10Hungar 1:18 2:5

16:23,24 17:317:25 18:3,1819:14 20:1,1120:16 21:8,1421:17 22:3,1722:23 23:12,1723:21 24:11,1424:21 25:2,1525:21 26:1,1126:22

hypo 38:19hypothetical

24:14 30:6,7

I idea 9:20 12:10

58:1identical 35:23ignores 19:4

45:3Imagine 29:6impermissible

15:15

implication 40:18

implicit 42:1942:20

implicitly 42:11implied 28:3,11

28:17 29:1730:3 32:2,5

34:4,6 35:1137:5 38:1539:10,16 40:640:9,16,2242:3,7 43:1546:21,23 48:349:12,17,20,2050:6,23 51:157:16 58:4,6

imply 40:17important 6:8

19:5 21:2322:5 28:11

impose 9:1017:18 21:4,12

imposed 51:24

imposes 21:20impression 47:9included 10:2including 11:22inconsistent

11:17independence

48:14independently

48:13indicated 14:14

19:17indisputable

38:12infringe 4:1,5,14

4:14 10:1112:12 14:2415:6,9 53:1257:6

infringed 3:173:21,24 10:1656:9

infringement 4:3 6:11 7:8,911:25 12:3,2213:2 14:1918:14 20:7,922:13,16 23:2524:2,8,1926:12,18 35:955:15

infringing 13:2115:2 16:820:24,24

inoperable 10:13

insert 36:8inserted 54:16inserting 30:1

31:6insofar 29:25inspectors 29:13instance 33:15instances 20:5,6Intel 3:19 4:9,9

4:12 6:9,11,167:1,5,7 8:1,8

9:2 10:9,1611:21 12:214:12 15:520:6,10,2122:11 25:11,1425:24 26:633:16 41:18,2141:22 43:1049:20,21,2250:7,7,10,2250:22,22 51:2552:6,20 54:1355:11,13 56:23

Intel's 10:12interrupt 37:11invent 47:10invention 5:18

54:16inventor 29:8

36:11involve 45:20involved 27:12

34:23 45:454:15 56:4

involves 46:556:5

involving 48:1issue 3:20 9:21

10:4 11:812:10 22:1928:2,3 43:19

45:6,10,12,2046:3 49:1252:25 53:8,2155:25 56:657:2

issued 49:7item 17:6 25:10

30:24,25items 20:21i.e 15:24 25:1

J January 1:10 judgment 4:8

53:13Justice 1:19 3:3

3:9 4:6,17,235:24 6:14,237:18 8:10 9:39:16 11:6,1212:4,8 13:4,1813:22 14:215:21 16:11,2117:3,25 18:1619:11,16,2320:8,13 21:221:11,15,2222:4,14,2123:6,16,1824:3,10,12,1924:22 25:8,1825:25 26:4,2127:1,3,18 29:530:17,20 31:932:7,17,22,2434:12,16 35:135:5,12,13,2036:3,6,18,2136:24 37:7,8

37:10,12,16,2538:9,18 39:7,939:15,21 40:140:5,21 41:441:10,14,2042:1,6,10,1442:19,25 43:343:5,19,24

44:3,22 45:145:12,18,2346:1,5,10,1746:20,25 47:247:4,6,8 48:2148:24 49:15,1949:23,24 50:350:6,19,2151:10,20 52:1652:18 53:1654:1,4 55:458:9

justify 48:10

K keep 31:25

KENNEDY

15:21 16:11key 25:18,21

26:4 27:4,1534:3

kind 24:5 35:1740:5,8 43:15

kinds 39:1249:10 54:23

knew 9:2 10:1752:6,9

know 8:6 14:1014:12 27:729:22 32:8,1532:19 33:1934:4 35:25,2538:2 40:1245:7,16 47:750:17 52:13,2458:1

known 9:20knows 9:4KSR 48:25

L lacked 55:11language 8:23

33:24 35:1854:11 57:2

laptops 32:21law 4:2 17:23

18:23 21:7,15





21:18 22:924:10,13,1329:15 49:3

lawful 21:8laws 6:18 17:7

24:9lawyers 47:20

47:21,21leaves 45:10legislative 18:4

18:11,19lens 9:12,23,25

13:3 56:14,1556:18,19,1957:7,12,23

lenses 31:19

let's 31:25 32:233:15 35:22level 20:2LG 1:7 3:4 20:3

41:23LGE 10:18 12:1

15:4 49:2050:7,23 54:12

LGE's 10:4,1556:9

liability 6:13 8:410:17

liable 6:10 7:7,911:25 12:222:12,15 24:8

liberally 49:2license 4:9,12,17

6:12 7:1,2,7,117:12 8:15 13:713:14,16,2414:4,9 19:1819:20,23 20:421:1 22:12,2423:13 24:7,2024:23 25:12,1225:17,20 26:628:11,17 29:1830:3 32:5,2534:4,6 35:1137:5 38:1639:10 40:6,9

40:17,22,2542:3,4,8,1243:6,15 44:5,746:6,12,22,2348:3 49:12,1749:20,20 50:750:23 51:1,254:8 55:1757:16 58:5,6

licensed 7:2328:7 29:8 33:533:9 43:1246:11 54:8,13

licensee 6:25 7:37:22 20:221:19,19 22:20

22:23 23:8,1324:16 25:535:3 42:10,1142:15

licensee's 13:23licensing 19:22

28:3 32:2light 15:21Likewise 25:3limit 7:22 22:1

26:15 33:344:12,13

limitation 52:25limitations 10:7

56:20 57:1,10limited 7:3

33:14 45:2353:9 54:5,7,7

limiting 34:18limits 18:6,7

44:17line 7:15,21 11:3

40:8litigate 8:19litigated 11:18

12:23 13:5litigation 52:8little 19:15live 8:19logical 28:23

30:25

longer 28:18look 14:13,18

29:23 35:1340:12 48:11

looks 10:4lot 6:8 8:16,17

49:2lower 5:2

M Mahoney 1:16

2:3,11 3:6,7,94:6,10,20 5:16:7,19 7:4,248:21 9:11,1811:11,17 12:7

12:9 13:4,1113:20,25 14:716:2,13,2220:3 55:5,7,958:10

maintain 7:21making 36:4Mallinckrodt

33:21,25 34:1334:16 45:9

manner 10:2manufacture

11:23 25:1246:7

manufactured 10:2,6 13:1513:24,25 56:2356:25 57:4

manufacturer 8:16 13:14,19

manufacturing 39:1,4 57:10

market 5:10

Masonite 13:8Master 30:16,19matter 1:12 8:2

21:18 34:4,2542:2 44:2049:12 58:12

matters 42:2MAUREEN

1:16 2:3,11 3:755:7

mean 16:1718:12 19:1420:17 21:1227:20 32:2537:11,12,16,1740:2,11 41:1441:18,22 42:1743:9,9 45:648:9,25 51:1552:5,23 53:553:19

means 14:841:12 56:11

mechanism 32:3

36:7,13mechanisms 30:24 31:10

memory 10:1056:8

mere 19:21,23met 10:6 57:10method 3:20,25

10:3 11:14,2211:24 14:2227:15 39:1255:12 57:1

methods 11:939:12 52:16

microprocess... 56:24

middle 39:3,3Miller 56:16Miller/Tydings

56:16Millinger 15:17mind 4:7 6:25

9:9 46:1254:18

minutes 55:5mistake 12:5misunderstan...

19:7mixed 31:2moment 33:16Mondays 23:15

money 52:2,2monopoly 5:23

11:3 23:526:19

Motion 5:1215:15 17:13

multiple 57:4

N N 2:1,1 3:1narrow 28:21nature 38:10

53:6necessarily 10:1

10:11 24:2046:11 56:9

necessary 15:2318:10

need 34:17 36:954:24

negated 40:24negotiate 8:8negotiated

52:23never 3:17 10:19

12:23 15:1835:7 55:10,1255:20 56:2

nevertheless 10:22 30:1057:8 58:2

new 32:14nonsensical

12:13non-infringing

39:18,22non-Intel 4:24Nope 15:19normal 35:14

41:7normally 40:7Notably 54:15notice 5:17

15:12 19:921:21 25:10,1928:15,16 32:1235:10,18 37:4





37:20 38:5,1038:11,12,1939:11,14,1540:1 41:5,1541:17,24 43:243:4,5 51:2352:4,13,19

notion 28:10notwithstandi...

8:24 33:1Number 44:22

O O 2:1 3:1obligated 21:20

23:24

obtain 23:23,2425:6

obtained 7:11obtaining 38:15obviously 18:15

18:21 32:5,15occur 14:9 40:23occurred 40:22

40:25,25 42:4Office 49:1oh 37:25 38:21

41:21 57:21okay 10:22 36:9

38:8,18 47:4once 4:11,12,13

6:20 14:815:19 38:541:2,3 57:17

ones 44:11open 45:10operation 8:25opinion 36:25

54:2

opportunity 51:18

optional 17:10oral 1:12 2:2 3:7

16:24 26:24order 6:24 10:17

43:21 49:1054:24 56:18

ordinarily 28:140:13

ordinary 8:2535:17

original 36:11ought 28:20

35:16outcome 9:21outset 11:18outside 20:6overridden

19:12 40:19override 18:24

19:9overrode 17:17owner 4:4 5:18

5:22 7:1312:17 14:2157:13

owner's 12:16

P P 3:1page 2:2 11:19

20:20 22:638:13

paid 15:18 51:25paper 38:3part 5:23 52:22

57:8particular 15:15

17:6 18:6,719:19 23:428:25 29:132:10 34:735:15 37:3,2338:23 40:1545:8,13 46:7,852:24,25 53:7

54:25particularly

49:5parties 8:8,10

33:2 38:1440:20 41:15,1541:16

party 23:23 33:4

patent 3:16,244:2,4 5:22 6:187:14 8:2512:11,11,17,1912:20,21 14:2114:22 15:1,1915:24 17:7,1017:22 18:2,1018:20,23 19:1819:19 20:7,921:1,18 22:922:12,25 23:523:10,25 24:124:9,13,1726:11,17,1827:13,22 28:7

29:2,4,13,1729:22,24,24,2529:25 30:1,1130:18 31:18,2032:16 33:3,633:13,14,1834:8,19,21,2336:14,16 38:738:22 39:541:1,13 42:2444:20 45:1646:14 47:13,1447:20,21,25,2548:9,11,16,1748:22 49:1,3,751:16,19 53:1255:18,24,2456:4,6,17 57:857:13,18

patented 21:424:6 39:1250:16 54:16,1757:7

patentee 6:2,257:2,20,2217:11,18,2219:8 23:9 25:425:4 40:7 41:151:11,12

patentee's 6:426:8

patentowner 7:12 10:2213:13 14:1615:17

patents 3:20,254:15 5:13 10:311:9,10,13,1511:22,23,2412:9,14 15:1617:14 32:345:4 49:2 51:851:11 52:954:8,9,1255:12,25 57:1

patent's 13:16patent-exhaus...

9:5,14 17:8,2119:8,24 22:623:2 27:946:13 50:19

pay 6:12pays 21:6peace 52:7pedal 30:1,14,15

36:17 38:642:20

pedaling 29:1136:10

pedals 21:3 29:729:8,11,21,2436:7,18 38:247:11,15

people 7:23 8:1820:10 25:5,1326:7 28:2438:23,25 39:342:12 46:147:10 50:17

perfect 7:17perfectly 19:1permissible

54:23permit 42:11permitted 20:6person 9:3 22:10

23:19 24:5,7perspective

31:23pertinently

23:19petition 10:8

11:20 44:2Petitioner 43:21Petitioners 1:5

1:17,21 2:4,72:12 3:8 17:220:22 55:8

Phillips 1:22 2:87:19 26:23,2427:1,25 30:530:18 31:8,1332:17,18,22,2333:12 34:15

35:4,6 36:2,536:17,20,2337:2,14,1938:9,21 39:839:13,17,2440:2,11 41:2,841:12,18,2142:5,7,13,1642:22 43:1,844:1,21,2545:3,22,2546:3,9,16,1946:24 47:2,548:7,22 49:449:15,18,22,2350:1,4,10 51:352:5,22 53:1954:3,10 55:5

pick 48:10Picture 5:12

15:16 17:14Pictures 5:8pieces 38:3place 51:15plainer 35:19plainly 12:25plants 31:5please 3:10 17:4

27:2point 11:2 13:12

13:15 24:4





26:16 27:1628:23 31:1432:7 35:8,1135:12,13,1838:11 41:2451:9

portion 51:16position 6:15

18:17 30:947:1 55:22

post 28:16post-sale 17:23

56:1potential 10:17potentially

11:25 12:2

37:5power 11:4practiced 57:8precedent 58:6precedents

17:20precisely 31:20

39:8 52:6precludes 17:22predated 28:14predicate 54:19prefer 8:18preferable

47:23prefers 8:12presented 43:21

44:1presumably

7:24,25 8:4,1618:5

presumed 48:1248:12

presumes 49:6prevail 34:8

43:22 48:25prevent 15:24

19:24previous 33:22price 5:16,20prices 57:25primary 40:15

principal 16:12principle 17:9

17:17,21 24:18principles 18:14

26:19prior 41:25 42:3probably 30:21problem 30:5

44:19,21 53:6problems 49:10proceeding

28:23product 14:23

14:25 15:1016:8 20:922:11 23:20

25:13 28:2529:1 33:1537:23 42:1253:10 57:3,757:17,19

products 4:2510:11,16 15:215:6 25:11,1426:7,8 33:5,950:24 52:2053:5,11,2254:13 56:13

prohibited 5:7promise 23:23

25:6 26:14,1526:16

properly 3:13proposition 13:9

13:10 35:2protected 35:16

35:21 57:18protection 3:23

4:3 17:7protects 28:23provided 34:21

37:21provides 4:3providing 19:12provision 9:4

52:12PTO 18:16 48:8

48:15 49:5purchase 28:24

37:21 53:9purchased

53:23purchaser 6:2

17:19 21:1822:24 25:726:12,14,1637:21 42:8,957:23

purchasers 17:24

purchasing 38:16,17

purpose 5:7

15:11 31:5purposes 13:822:25

pursuant 13:2414:1

put 9:7 21:227:20 29:1130:16 31:2136:13 38:5,550:16

puzzled 13:6

Q Quanta 1:3 3:4

4:9 14:1125:16 41:22

Quanta's 56:7quarrel 38:10question 4:19

7:19 9:4 10:1513:1 15:2222:5,18 27:427:11 30:14

31:24 33:1935:7 40:1843:10,10,14,2144:1 45:5,6,1145:15 47:1651:17

questions 55:2quite 9:14 37:4

38:13quote 29:2

R R 3:1

rationale 17:1219:4

read 34:2 51:1052:12 54:11

reading 54:2readopted 18:13reaffirm 17:21reaffirmed

18:13real 25:3 45:20reality 53:1

realize 28:12really 4:15 5:25

13:5,12 14:1416:8 39:147:11 56:13

reason 8:7 9:1518:1 21:2329:5 39:9 40:944:3 45:1649:9,14 51:2452:23 55:16

reasonable 37:440:16 46:848:2

reasons 4:1833:7

REBUTTAL 2:10 55:7

received 28:1532:12 41:2

recodified 18:13recognize 34:18

54:18

recognized 3:185:5 9:13 14:534:23 52:1453:19 55:20

recognizes 8:23record 7:25 12:6

18:4reference 52:25

reject 19:6rejected 28:10related 32:3relatively 37:3released 12:16

55:13,14,16relevant 19:21

31:14relied 40:1rely 39:22,25

57:15remainder

16:19remaining 55:6remedies 7:13

19:13 22:8

23:10,11 24:25remotely 52:14removes 17:6

23:4render 10:13replication

15:25reply 48:6 51:10require 9:15

26:14required 8:5requirement

25:19 26:13requirements

8:15requires 21:21requiring 25:10resale 4:19

17:19,23 57:15reserve 16:19resolved 42:18

45:9 49:13,16respect 11:12,14

16:3 52:15,15respects 33:20Respondent

1:23 2:9 19:320:14 26:25

rest 27:14restrict 25:4restricted 20:4,4





23:13,14restriction 4:19

21:4 23:2224:23,23 53:4

restrictions 9:1015:23 17:17,23

rests 12:5result 6:17

51:21 52:3results 6:20retail 5:16retain 5:23

10:24 30:10retained 11:14

28:20 51:5ride 35:25

right 5:23 10:2413:25 14:1616:9 20:4,1620:21,23 22:323:9,14,2524:16 29:2230:10 31:8,1235:4,20 36:536:20,23 37:1937:22,23 39:1740:2,2,25 41:241:6 42:11,1342:22 43:1144:12,13,17,2145:22,23,2446:9,14,16,1948:25 49:452:1,14 53:953:10,11

rights 4:13 6:411:4,5 12:1614:18 15:1816:3,4 19:1322:8 29:333:24 34:4,2034:24 48:1651:7,14,1857:13

road 29:1238:20 45:7

ROBERTS 3:3

5:24 6:14 8:109:3,16 16:2119:11,23 20:820:13 22:4,2123:6,16,1824:3,12 26:2127:18 32:17,2232:24 43:348:21,24 49:2351:20 52:1855:4 58:9

role 48:8royalty 14:16,22

15:3,5,10,20rule 8:14rules 35:17

ruling 8:22rulings 42:17runs 19:4

S S 2:1 3:1sale 3:16 4:9,11

4:21,21 5:205:21 6:16,206:21 7:8,10,137:16 10:2112:15,17,2513:7,23 14:314:11 15:816:7,16 17:619:10,19,2020:12,17,18,2522:18,19,21,2322:24,25 23:323:3 24:15,2024:24 25:22,2325:23 26:5,1026:18 27:8,9

27:12,17 28:2129:1 30:1332:1 33:14,2334:9,10 35:2,340:23,24 41:841:25 42:543:7 45:8 46:751:11,18,21,25

54:5,5,7,1557:15,17

sales 6:10 14:8satisfied 3:13,15

10:1,2 12:2513:2 44:7

saying 6:5,1713:12 22:1523:1,12 25:827:22 29:2343:24 44:3,1545:19 46:2049:6 54:6,6,1158:5

says 5:9,11 8:2410:5,9,12

12:18 19:1630:1 32:2538:4 43:2,444:6,8 52:1954:12 56:16

Scalia 40:2141:4,10,14,2042:1,6,10,1442:19,25 43:543:19 49:15,1949:24 50:3,650:21

scheme 48:1549:6

scope 17:9 18:833:13

second 3:22 24:729:4 44:12

Section 14:2018:6 48:11

see 15:21 36:358:8

seed 21:10seeds 15:25seeking 15:7sell 3:19 4:14

5:6,9,14,15,155:23 7:1 8:2,68:14 10:18,2311:4,21,2412:18,19,21,21

13:14 15:520:4,5,21,2321:3 23:14,1423:19,19,22,2524:16 25:6,1326:7 29:10,2232:14 41:642:20 43:11,1244:6,8,8,12,1344:14,17,1745:12 46:11,1350:8,8,11,1250:13,14 55:1255:17,23

seller 10:23 24:1seller's 5:6

selling 7:22 28:5sells 6:2 14:2322:11 23:1733:5 42:1252:12

send 21:5sense 7:17 14:12

14:17 31:1640:19

sent 15:12separate 27:13

27:22 28:729:2 31:18,2031:22 32:1634:23 38:2242:24 45:4,1648:8 51:8 52:953:12,20

separately 50:16separateness

49:7serious 52:6servitudes 29:16servitude's

21:13shelf 27:21shoes 23:9shop 29:7,9,10

36:7 38:1,1show 10:6showing 9:19

side 8:12 20:1428:15 49:13

sides 52:8sign 26:14significant 22:1

27:24 44:5simple 38:19simply 4:1 10:20

12:4 19:9,1223:11 29:134:11 55:22

single 28:634:21 56:4,5

sit 53:16situation 22:7

23:8 30:7

sold 3:23 4:247:6 15:19 17:619:10 20:6,1026:12 27:1129:9,10,2130:24,25 33:933:16 43:1350:24 52:1054:13 57:12

Solicitor 1:18solution 48:18

52:21somebody 5:15

29:8 50:15somewhat 34:1sophisticated

38:14sorry 37:10 39:8

50:22sort 32:9 38:10

44:16 49:14sought 18:9sound 20:13sounds 21:6Souter 11:6,12

12:4,8 24:1924:22 27:337:7,10 38:1843:24 44:3,2245:1,13,18,2346:1,5,10,17





46:20,25 47:347:4,8 50:1951:10 54:4

speaking 38:24specific 6:23

32:12 33:1537:20 38:14

specifically 8:2428:10 34:537:15 43:1652:13 53:2057:23

specifications 10:13

specified 5:16specify 18:5,7

spell 8:11spelling 9:8spot 39:3stage 19:22

28:16 57:5stages 57:4Stair 30:16,18stake 41:1standard 9:25

13:2standards 4:3stands 23:8start 29:11

36:10,15 55:9statement 13:6

41:5 46:6States 1:1,13,20

2:6 16:25statutory 49:6step 49:25Stevens 4:6,17

4:23 13:4,1813:22 14:219:16 25:8,1825:25 26:434:12,16 35:135:5 39:7,9,1539:21 40:1,553:16 54:1

stipulation 22:12

stop 29:15 36:1138:22

stops 36:25Store 17:14straight 4:7Straus 17:14stretch 29:4structured 6:16subject 9:5

18:20submit 19:3,5

34:10submitted 58:10

58:12subsequent

40:21

sue 12:22 24:1228:13sued 28:15sufficiently 15:1

15:1suggested 19:2suggests 22:14suing 39:2support 13:10

28:22supporting 1:20

2:7 17:2suppose 35:22supposed 9:1Supreme 1:1,13

9:6sure 26:2 35:21

38:21,24 50:1053:3 54:21

surely 42:15surprised 28:24system 3:20,24

10:3 11:22,2412:12,20,2114:21 27:1431:22 33:1735:10 36:15,1943:11,11,13,1343:14 46:1547:14 48:1,150:23 51:16

54:17 55:11,1857:1

systems 11:9,1427:23 32:14,1438:17 50:14,1752:15

T T 2:1,1take 8:12 18:16

30:15 31:9,2145:15 50:15,2552:1

talk 29:17talking 5:8 16:7

16:8 19:15

23:8 27:629:20 30:2333:8,10 36:15

talks 23:2task 54:22tell 21:5 44:10telling 23:10

24:4tends 49:2term 8:8terminology

48:3terms 8:1 11:19

12:3 23:2452:8

test 3:25Thank 16:20,21

17:3 26:2127:1 55:4 58:858:9

theory 25:153:18 54:2

thing 4:7 15:16

32:13 43:1847:13

things 6:8 8:148:22 21:2336:11 48:950:8,11,1256:8

think 4:10 5:1,2

5:3 6:19,248:21,23 9:2,119:22 13:11,1714:2,7,1216:10 19:1121:9 22:4,2526:1 27:430:20 33:2334:1 35:8,1235:14,16 37:438:12 39:13,1539:17,19 40:1040:11 43:1844:15,22,2545:6,14 47:847:10 48:4,7

48:19 50:2151:3 53:17third 24:5THOMAS 1:18

2:5 16:24thought 14:4

16:11 21:2230:17,23 45:8

thousands 12:13time 16:20 32:11

37:21 40:23,2440:25 42:4,2343:7 58:8

today 3:4told 22:10track 30:23transaction 4:7

14:8transactions

14:6transformed

17:8treated 16:4

35:3tried 15:16triggered 3:12

4:8 16:3 54:2157:19

triggering 7:15troubles 51:24true 5:24 19:16

19:17 20:231:13 48:1557:5

truth 27:9try 5:23 28:19

51:9trying 34:24

45:8 51:22Tuesday 23:17Tuesdays 23:15turn 6:8turned 32:20

51:13turns 6:5two 3:12 14:6

15:15 39:11

42:17 47:2556:13,14,17type 57:14

U ultimate 39:2

42:8,9 44:1946:11

unauthorized 20:12,17 24:1524:20 25:23

uncertainty 8:17,17,19

uncompleted 16:15

underlying 14:453:6

undermine 51:7understand 6:14

13:4 24:1525:25 35:145:18 46:25

understanding

34:13 35:2140:14 43:9

understates 48:8

understood 9:2322:5 24:938:15 51:6

undisputed 3:15





20:20undoubtedly

6:11unenforceable

45:14United 1:1,13,20

2:6 16:25Univis 3:25 9:12

9:23,25 13:316:6,11,1417:13 31:1634:19 56:3,1257:2,22

unlawful 21:7unrestricted

4:13,18 13:13

unusual 40:6,9unwilling 8:11use 4:13,19,24

5:7,10,1910:24 11:413:14 15:10,2316:4,9,1717:18,23 20:923:20 25:1326:7,15 27:1927:23 28:6,830:25 31:5,1231:16 32:2,932:13 35:9,1537:6,22 40:1542:12,23 45:1546:7,8,1147:12 48:250:9 52:2056:1 57:14,2458:2

user 21:5uses 13:3 22:11

24:1,6 39:1139 19 23 41 7

48:18,22view 10:20

13:23 19:8violate 45:16violated 24:24

26:16violating 23:24

39:5virtually 30:25void 28:19 49:14

W waive 34:3Wang 51:15,17want 10:23 15:9

26:2 27:3 29:6

29:13 30:1052:3wanted 15:12

18:5,7 51:9wants 7:21 25:4warning 44:14Washington 1:9

1:16,19,22wasn't 4:19 8:9

9:16,18 57:6,7way 6:3,16 7:3

7:20,20 8:910:6 11:1812:23 13:514:13 17:1518:9,20,2421:24 23:2024:6 28:8,2331:24 32:1033:3,8 34:335:16 40:1647:22 51:5,751:20 52:23

56:25ways 22:1 33:23

30:23 44:10,1448:25

we've 19:2 33:735:23 49:1

what-not 44:19whim 17:11white 15:21willing 8:9win 20:18 54:24wires 10:10 56:8won 20:15word 6:1,2,3

54:6wording 6:5,7words 4:5 6:3

9:1 14:25

16:14 24:533:6 38:3,4work 4:10 8:11

36:1world 25:3

32:24 47:13worthless 15:24wouldn't 7:8 8:1

51:12,25wrinkle 11:7write 22:2 36:25wrong 23:1

30:23 31:1237:17,18

wrote 9:4

X x 1:2,8

Y Yeah 41:10year 48:25years 14:5 17:5

51:6

1 10:16 1:14 3:2109 18:611:16 58:11150 17:5 51:616 1:10 2:7 22:619 29:131952 18:12,19

2 2008 1:1026 2:9271(c) 14:20282 48:11

3

3 2:43.8 32:25

30a 10:4

4 4a 54:1142,000 38:3,446 10:12

5 5 11:195a 20:20 54:11

54:1555 2:12

6 67 10:8

7 7 12:1

US Supreme Court: 06-937

Documents

Transcript of US Supreme Court: 06-937