Helferich Patent Licensing, LLC v. New York Times Co. , 778 F.3d 1293 ( 2015 )

United States Court of Appeals
for the Federal Circuit
______________________
HELFERICH PATENT LICENSING, LLC,
an Illinois limited liability company,
Plaintiff-Appellant
v.
THE NEW YORK TIMES COMPANY,
a New York Corporation,
Defendant-Appellee
J.C. PENNEY CORPORATION, INC.
Defendant
G4 MEDIA, LLC, THE BON-TON STORES, INC.,
BRAVO MEDIA LLC, CBS CORPORATION,
Third Party Defendants
______________________
2014-1196
______________________
Appeals from the United States District Court for the
Northern District of Illinois in No. 1:10-cv-04387, Judge
John W. Darrah.
______________________
2 HELFERICH PATENT LICENSING v. THE NEW YORK TIMES
-----------------------------
HELFERICH PATENT LICENSING, LLC,
Plaintiff-Appellant
v.
G4 MEDIA, LLC,
Defendant-Appellee
______________________
2014-1197
______________________
Appeals from the United States District Court for the
Northern District of Illinois in Nos. 1:11-cv-07395, Judge
John W. Darrah.
______________________
-----------------------------
HELFERICH PATENT LICENSING, LLC,
Plaintiff-Appellant
v.
CBS CORPORATION,
Defendant-Appellee
______________________
2014-1198
______________________
Appeals from the United States District Court for the
Northern District of Illinois in Nos. 1:11-cv-07607, Judge
John W. Darrah.
HELFERICH PATENT LICENSING v. THE NEW YORK TIMES 3
______________________
-----------------------------
HELFERICH PATENT LICENSING, LLC,
Plaintiff-Appellant
v.
BRAVO MEDIA, LLC,
Defendant-Appellee
______________________
2014-1199
______________________
Appeals from the United States District Court for the
Northern District of Illinois in Nos. 1:11-cv-07647, Judge
John W. Darrah.
______________________
-----------------------------
HELFERICH PATENT LICENSING, LLC,
Plaintiff-Appellant
v.
J.C.PENNY CORPORATION, INC.
Defendant-Appellee
______________________
2014-1200
______________________
Appeals from the United States District Court for the
Northern District of Illinois in Nos. 1:11-cv-09143, Judge
John W. Darrah.
4 HELFERICH PATENT LICENSING v. THE NEW YORK TIMES
______________________
Decided: February 10, 2015
______________________
AARON M. PANNER, Kellogg, Huber, Hansen, Todd,
Evans & Figel, PLLC, Washington, DC, argued for plain-
tiff-appellant Helferich Patent Licensing, LLC. Also
represented by MICHAEL E. JOFFR, BRENDAN J. CRIMMINS;
VICTORIA GRUVER CURTIN, Victoria Gruver Curtin, PLC,
Scottsdale, AZ; STEVEN G. LISA, Law offices of Steven G.
Lisa, Scottsdale, AZ, JON E. KAPPES; GERALD D. HOSIER,
Law Offices of Gerald D. Hosier, Ltd., Aspen, CO.
BRIAN BUROKER, Gibson, Dunn & Crutcher LLP,
Washington, DC, argued for defendant-appellee The New
York Times Company. Also represented by BLAIR A.
SILVER; ALEXANDER N. HARRIS, San Francisco, CA.
DARYL JOSEFFER, King & Spalding LLP, of Washing-
ton, DC, argued for defendant-appellee J.C. Penney
Corporation, Inc. Also represented by ADAM CONRAD,
Charlotte, NC; R. DAVID DONOGHUE, Holland & Knight,
LLP, Chicago, IL, ANTHONY J. FUGA; BENJAMIN M. STERN,
Holland & Knight, LLP, Boston, MA.
EDWARD R. REINES, Weil, Gotshal & Manges LLP,
Redwood Shores, CA for third party defendants G4 Media,
LLC, Bravo Media LLC, CBS Coporation. Also represent-
ed by BYRON BEEBE.
______________________
Before TARANTO, BRYSON, and CHEN, Circuit Judges.
TARANTO, Circuit Judge.
Helferich Patent Licensing, LLC, brought this action
against defendants New York Times Co., G4 Media LLC,
HELFERICH PATENT LICENSING v. THE NEW YORK TIMES 5
CBS Corporation, Bravo Media LLC, and J.C. Penney
Corporation, Inc., alleging infringement of various claims
of seven patents—U.S. Patent Nos. 7,280,838; 7,499,716;
7,835,757; 8,107,601; 8,116,741; 8,134,450; and 7,155,241.
The asserted claims, generally speaking, address systems
and methods for handling information and providing it to
wireless devices, such as mobile-phone handsets. Other
claims in two of these (and other) Helferich patents,
claims not asserted here, address handsets and methods
of using them.
The United States District Court for the Northern
District of Illinois granted summary judgment of non-
infringement under the doctrine of patent exhaustion.
Helferich Patent Licensing, LLC v. New York Times Co.,
965 F. Supp. 2d 971 (N.D. Ill. 2013). It held that, by
granting handset manufacturers patent licenses confer-
ring broad authority to sell the handsets, Helferich had
exhausted its ability to enforce its patents not only
against acquirers of the handsets but also against the
defendant content providers who use presumptively
distinct inventions to manage content and deliver it to
handset users. We reverse, concluding that patent ex-
haustion has not reached that far and should not be newly
extended to do so in these cases.
BACKGROUND
Helferich owns more than thirty United States pa-
tents that cover a range of distinct, though related, wire-
less-communication technologies. All of the patents that
are relevant here derive from a common specification.
One subset of Helferich’s claims consists of apparatus and
method claims directed, generally speaking, to mobile
wireless-communication devices (handsets) and receiving
and/or requesting certain content. It is useful to call
those claims “handset claims.” Another subset of Helfer-
ich’s claims consists of claims directed, generally speak-
ing, to systems and methods for storing and updating
6 HELFERICH PATENT LICENSING v. THE NEW YORK TIMES
information of various types (content) and sending it to
handsets: for example, a mobile-device news service might
send a subscriber a message containing the headline of a
news article along with website-location information that
permits the subscriber, upon choosing to click a hyperlink,
to gain access to the complete article. It is useful to call
those claims “content claims,” reflecting the fact that it is
content providers, not possessors of handsets, that prac-
tice them.
Only content claims are asserted here. Two of the pa-
tents at issue (the ’838 and the ’716) contain both handset
claims and content claims. The other five patents contain
only content claims.
We must assume that all claims at issue are valid.
The Patent and Trademark Office issued all of the assert-
ed claims—some of them added or amended or confirmed
on reexamination (initiated by defendant New York
Times, J.A. 616)—thereby raising a presumption of validi-
ty. 35 U.S.C. § 282; Microsoft Corp. v. i4i Ltd. P’ship, 131
S. Ct. 2238, 2252 (2011). Moreover, the PTO required
none of the patents containing the asserted content claims
to be issued with terminal disclaimers (under 35 U.S.C.
§ 253 and 37 C.F.R. § 1.321) in light of other patents;
thus, it did not conclude that awarding distinct patents
would constitute double patenting. See In re Hubbell, 709
F.3d 1140, 1145–46 (Fed. Cir. 2013). Specifically, we
must assume that all of the asserted content claims are
“ ‘patentably distinct from the claims of’ ” other patents
containing handset claims, because neither the PTO nor
the district court has determined—and we are not asked
to determine—that the asserted content claims are “ ‘obvi-
ous over, or anticipated by,’ ” such handset claims. Id. at
1145; see generally PTO, Manual of Patent Examining
Procedure § 804 (elaborating on double-patenting doc-
trine). In fact, during prosecution, the PTO, exercising its
discretionary authority under 35 U.S.C. § 121, identified a
number of separate inventions and demanded that they
HELFERICH PATENT LICENSING v. THE NEW YORK TIMES 7
not be combined in a single application, leading to multi-
ple “divisional” applications that eventually issued as
separate patents.
Claim 1 of the ’450 patent is an example of a content
claim, one particularly directed to sending content to
handsets from remote servers:
1. A method of providing content to a cell phone
comprising:
a content provider causing the content to
be stored in an internet accessible storage
unit;
the content provider initiating a page to a
content subscriber, the page including a
notification that: (i) identifies the content,
and (ii) includes an address of a system to
be contacted to trigger retrieval of the con-
tent, but does not include the content;
wherein the page indicates that the con-
tent is available for a specified time; and
the content provider causing the content
identified by the notification to become in-
accessible at the internet accessible stor-
age unit after the specified time identified
by the initiated page.
’450 Patent, col. 19, lines 22–35; J.A. 295 (certificate of
correction).
Claim 7 of the ’838 patent is an example of a handset
claim:
7. A method of operating a wireless communica-
tion device in a communication system that in-
cludes a plurality of information storage systems,
and a mobile radiotelephone network comprising:
8 HELFERICH PATENT LICENSING v. THE NEW YORK TIMES
receiving a notification message from the
mobile radiotelephone network, the notifi-
cation message including (a) a system
identifier identifying a particular one of
the plurality of information storage sys-
tems and (b) a message identifier identify-
ing information that is stored in at least
one of the plurality of information storage
systems and which information is intend-
ed for a user of the wireless communica-
tion device;
alerting the user that the notification
message has been received;
receiving input from the user specifying
an action to delete, forward, or reply to be
performed on the information correspond-
ing to the notification message; and
transmitting via a mobile radiotelephone
network, to the information storage sys-
tem identified by the system identifier, an
action identifier corresponding to the ac-
tion specified by the user;
alerting the user that the action specified
by the user has been completed.
’838 patent, col. 1, lines 28–51 (reexam. cert.).
Helferich licensed its portfolio to what, at least at one
time, constituted most—we may assume all—of the
manufacturers of mobile handsets for sale in the United
States. It is undisputed that, under the doctrine of patent
exhaustion, those licenses eliminate for the own-
ers/possessors of handsets acquired from the licensed
manufacturers—“authorized acquirers”—any legal re-
striction the patents would otherwise impose on them
HELFERICH PATENT LICENSING v. THE NEW YORK TIMES 9
through the patent statute, 35 U.S.C. §§ 154, 271, regard-
ing their sale or use of their handsets. 1
The licenses themselves generally reflect painstaking
efforts to distinguish the conduct of handset makers and
possessors from the conduct of others, such as content
providers, and to distinguish claims practiced by the
former from claims practiced by the latter. (The parties
have not clearly identified and explained any differences
among the licenses that would alter the analysis here.)
The licenses generally indicate that the Helferich portfolio
contains many claims that would not be infringed by a
handset manufacturer because those claims “expressly
recite material additional operations that are carried out
(or material additional structure that is added) by Third
Parties, including . . . Content Provider[s] . . . and/or are
not substantially embodied in the products, services, or
methods within the scope of the Licensed Fields,”
J.A. 2102 (emphasis removed)—such Licensed Fields
being defined as “Mobile Wireless Communications De-
vices” made, used, etc., by the manufacturer licensee, J.A.
2100. The licenses generally disclaim any grant of rights
to such content providers and reserve Helferich’s en-
forcement rights against them. J.A. 2102–03. In light of
those provisions, the content providers in these cases rely
for protection only on the legal doctrine of patent exhaus-
tion, not on a claim of a factually “implied license” to be
found in the licenses Helferich granted to manufacturers.
1 We use “authorized acquirers” to refer to those
who acquire title to the article at issue from the patentee
or from a licensee authorized to sell, see LifeScan Scot.,
Ltd. v. Shasta Techs., LLC, 734 F.3d 1361, 1374–77 (Fed.
Cir. 2013), and those who acquire possession and opera-
tional control, as by lease, from such a person, Motion
Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S.
502 (1917).
10 HELFERICH PATENT LICENSING v. THE NEW YORK TIMES
See Helferich, 965 F. Supp. 2d at 979 (“The right of De-
fendants and other third parties here to practice [Helfer-
ich’s] patents is based [on] exhaustion, not on an implied
license . . . .”).
Between July 2010 and March 2012, Helferich filed
complaints against the defendants individually for direct-
ly infringing a number of Helferich’s content claims.
Helferich alleged that all defendants infringe content
claims of the ’838, ’716, ’757, ’601, ’741, and ’450 patents
and that Bravo and CBS also infringe the ’241 patent. 2
Although Helferich alleged indirect infringement in the
alternative, it is undisputed—as Helferich asserted in this
court without contradiction by defendants, see Helferich
Opening Br. at 23, 33—that the cases before us involve no
allegation by Helferich of indirect infringement based on
handset acquirers’ direct infringement.
The allegations of infringement focus on defendants’
conduct in storing content and delivering it to customers
via mobile-device applications, text-messaging subscrip-
tion services, and third-party networking programs like
Facebook and Twitter. For example, Helferich contends
that Bravo infringes when it (a) sends a multimedia
message service (MMS) text message to a handset user
that includes a brief description of video content and a
plain-text uniform resource locator (URL) for the video
stored on a remote server and (b) delivers that content to
the user upon request, as when the user’s handset has
2 The asserted claims are these: ’838 patent—
claims 9, 10, 12, 13, 15, 16, 18–20, 98–101, 106, 107, 109,
and 110; ’716 patent—claims 89–91, 94, 103, 104, and
106; ’757 patent—claims 1, 2, 6, 11, 18, 20, 37, 44, and 46;
’601 patent—claims 1, 3, 4, 9–11, 16, and 17; ’741 pa-
tent—claims 1–27; and ’450 patent—claims 1, 3–8, 10,
13–15, 19–23, 27, and 28. Some of the claims were added
or modified during reexamination.
HELFERICH PATENT LICENSING v. THE NEW YORK TIMES 11
recognized the plain-text URL and converted it into a
hypertext-markup-language (HTML) hyperlink and the
user clicks the hyperlink. Similarly, Helferich alleges
that CBS infringes by sending to its Twitter subscribers
text messages containing links to CBS’s content.
In March 2013, defendants jointly moved for sum-
mary judgment of non-infringement, asserting the affirm-
ative defense of patent exhaustion. Helferich cross-moved
for summary judgment, arguing that exhaustion was
inapplicable as a matter of law. The district court ruled
in defendants’ favor and denied Helferich’s motion. It
concluded that, because Helferich had authorized “every”
mobile-phone manufacturer to sell handsets under its
license agreements, its ability to assert its claims had
been exhausted—not only against handset acquirers, but
also against the content providers as third parties inter-
acting with handsets. Helferich, 965 F. Supp. 2d at 978.
The court did not focus on the particulars of any of
Helferich’s claims, whether handset or content claims.
Rather, the court relied on the simply stated premise that
“[a]ll of the patents-at-issue require the use of a handset
device.” Id. The court did not state that the defendants
were using handsets. Nor did it state that handset pos-
sessors practiced any of the asserted claims. Thus, it did
not state that handset possessors performed all or even
any of the steps of the claimed methods or, as to the
system claims, that they put the claimed systems into
service and thereby “used” them. See Centillion Data
Sys., LLC v. Qwest Commc’ns Int’l, Inc., 631 F.3d 1279,
1284 (Fed. Cir. 2011) (“[T]o ‘use’ a system for purposes of
infringement, a party must put the invention into service,
i.e., control the system as a whole and obtain benefit from
it.”). The court also did not state that the asserted con-
tent claims, to the extent they contemplate someone’s use
of a handset, require that handset to have the inventive
features claimed in particular handset claims. Rather,
citing one patent’s Abstract, and without reference to
12 HELFERICH PATENT LICENSING v. THE NEW YORK TIMES
particular claims, the court relied on the conclusion that
“[t]he handset devices have the capability to receive
content from content providers, and the patents all re-
quire devices capable of receiving content or messages.”
Helferich, 965 F. Supp. 2d at 978.
The court reasoned that, because “every handset de-
vice has been licensed to practice [Helferich’s] patents,”
“no handset device can infringe [Helferich’s] patents.” Id.
Moreover, the court held that the handsets, with the
content-and-message-receiving capability, “sufficiently
embody the patents in suit.” Id. As a policy matter, the
court added: “There would be little value to the handset
manufacturers (or their end users) to have purchased
licenses to [Helferich’s] patents to receive content from a
third-party content provider if the content provider, like
Defendants, could not send the message to the licensed
handset device without infringing the patent.” Id. at 978–
79. The court held: “Once the handset manufacturers sell
the handsets which embody [Helferich’s] patents, [Helfer-
ich’s] patents are exhausted as to all third parties, includ-
ing Defendants.” Id. at 979.
On reconsideration, the district court left its decision
unaltered except for correcting the omission of a reference
to the ’241 patent. Helferich Patent Licensing, LLC v.
New York Times Co., No. 10-CV-4387, 2013 WL 6354209,
at *1 (N.D. Ill. Dec. 4, 2013). Helferich timely appealed.
We have jurisdiction under 28 U.S.C. § 1295(a)(1).
DISCUSSION
We review the district court’s grant of summary
judgment de novo. See Charles Mach. Works, Inc. v.
Vermeer Mfg. Co., 723 F.3d 1376, 1378 (Fed. Cir. 2013);
Mullin v. Temco Mach., Inc., 732 F.3d 772, 776 (7th Cir.
2013). We read the record in the light most favorable to
Helferich (the non-moving party), drawing all reasonable
inferences from the evidence in its favor. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Naficy v.
HELFERICH PATENT LICENSING v. THE NEW YORK TIMES 13
Illinois Dep’t of Human Servs., 697 F.3d 504, 509 (7th Cir.
2012). Summary judgment requires that there be no
reasonably disputed facts capable of altering the outcome.
Fed. R. Civ. P. 56(a); Naficy, 697 F.3d at 509. Patent
exhaustion may be decided by summary judgment when
there are no such genuine disputes of material fact.
Keurig, Inc. v. Sturm Foods, Inc., 732 F.3d 1370, 1373
(Fed. Cir. 2013).
A
In defining the issue presented for decision, we begin
with the broad premise on which defendants rest their
exhaustion defense in this court—a modified version of
the broad premise of the district court’s holding. In an
effort to affirm the one-fell-swoop judgment as to all of the
asserted claims, without differentiation among those
claims, defendants rely on the simple premise that all of
the asserted claims contemplate a use of a handset by a
Helferich-authorized handset acquirer (not by the alleged-
ly infringing defendants). Thus, defendants’ Statement of
the Issue is: “Whether the district court correctly held
that [Helferich’s] infringement claims are barred due to
patent exhaustion because they necessarily involve the
use of already-licensed handsets.” Defendants’ Br. at 3.
Defendants identify the “involve[d]” handset use
broadly, though inconsistently. In their Summary of
Argument, they say that “[e]very claim of every asserted
[Helferich] patent requires some use of a licensed hand-
set: to receive a message or to initiate a request for con-
tent based on an identifier in the message.” Id. at 17
(emphasis added). In their Argument, they assert, more
restrictively, that “[e]ach asserted claim requires a ‘re-
quest’ or a ‘reply’ to come from a licensed handset,” id. at
29, and, still more restrictively, that “[e]very asserted
patent claim requires a wireless handset that can render
a hyperlink and send a content request,” id.; see id. at 29–
31.
14 HELFERICH PATENT LICENSING v. THE NEW YORK TIMES
In certain respects, defendants’ assertions overreach.
For one thing, the term “require” works against clear
understanding here, because it inaccurately tends to
suggest something the accused infringer must do. The
district court did not find, and defendants have not ar-
gued, that accused infringers of the asserted claims
generally, or defendants themselves, “use” the handsets. 3
We will therefore use “contemplate” or “involve” as short-
hands when speaking generally, see Defendants’ Br. at 3,
16, because those words, by their facial imprecision,
signal the need to elaborate more precisely. And we will
proceed on the premise, accepted by defendants, that only
handset owners/possessors, not those who practice the
asserted content claims, “use” the handset. 4
3 In their brief, defendants never assert that they
use the handsets or are alleged in the complaints to do so;
nor do they assert, more generally, that persons “using”
the methods or systems of the asserted content claims,
under 35 U.S.C. § 271, are using the handsets. Instead,
from its first pages, the brief (a) pervasively uses passive-
voice and other formulations to say that “a handset is
used” or “the use of a handset” is required, without desig-
nating the subject engaging in that use, e.g., Defendants’
Br. at 1–2, 16, 29–31, while (b) sometimes referring
specifically to the handset owner/possessor (never the
content provider) as the one “using” the handset, e.g., id.at 5–7, 13, 24 (“the handset user”).
4 In a related context, where a defendant’s practice
of a claimed invention presupposes that other persons
engage in additional conduct, we have said that the
additional conduct is part of “the environment” in which
the claim is practiced, and not something the defendant
need engage in for infringement to be found. Uniloc USA,
Inc. v. Microsoft Corp., 632 F.3d 1292, 1309 (Fed. Cir.
HELFERICH PATENT LICENSING v. THE NEW YORK TIMES 15
In addition, as to what use of a handset is contem-
plated by the asserted claims, defendants’ position goes
beyond what the district court found and what their
citations support. The district court—referring not to
particular claims but to the patents as a whole—relied
only on the receiving capability of handsets, not on actual
receipt of information by handsets or handset-generated
requests for information. Helferich, 965 F. Supp. 2d at
978–79. Moreover, defendants’ few pages of general,
selective discussion are not adequate to demonstrate—
what was disputed on summary judgment—that all
asserted claims contemplate that a handset user will use
the handset to initiate a request for content or, even more
specifically, that the handset renders text into a user-
clickable hyperlink for initiating such a request. 5 Nor
have defendants shown that all asserted claims contem-
plate that, for infringement to occur, a handset user must
2011); see also Advanced Software Design Corp. v. Fiserv,
Inc., 641 F.3d 1368, 1374 (Fed. Cir. 2011).
5 As to text-to-hyperlink rendering generally, de-
fendants cite a Helferich filing during reexamination of
the ’241 patent (a content-claim-only patent) as saying
that the inventive aspect of the handset was the trans-
formation of text strings into clickable links. Defendants’
Br. at 5, 30 (citing J.A. 1982). The cited filing does not
say that. It distinguishes prior art as containing an alert
about emails on the ground that the alert sent to a recipi-
ent “does not contain any information identifiers or mes-
sage identifiers,” requiring an interested recipient to
“separately pull information from the email list service,”
which waits to be contacted. J.A. 1982.
Defendants describe only one handset claim in their
brief—method claim 7 of the ’838 patent, as modified on
reexamination. Defendants’ Br. at 6–7. That claim does
not speak of text-to-hyperlink rendering. See supra pp. 7–
8.
16 HELFERICH PATENT LICENSING v. THE NEW YORK TIMES
actually receive information from the accused infringer.
For example, method claim 1 of the ’450 patent, quoted
above, on its face may be read to recite a process that is
complete without any handset receipt of information,
either a “page” or “content,” let alone a handset-generated
information request. The content provider’s initiation of a
page and accessibility of content seem to be enough under
the claim language, which has not been construed.
Two limits defining the issue before us are independ-
ent of the foregoing problems and are revealed by noting
what defendants do not argue. First, like the district
court, defendants do not contend that handset possessors
practice any of the asserted claims—that such handset
users perform the steps of the claimed methods (even any
of the steps) or put into service and thereby use the
claimed systems. Second, defendants do not argue that
the content claims’ contemplated handset use must in-
volve a handset that has the inventive features claimed in
Helferich’s handset claims. Although both parties have
made suggestions that (some or maybe all) handsets in
the market do have features that bring them within some
handset claims, see J.A. 1023, 2056, 2058; Defendants’ Br.
at 55, defendants do not argue that infringement of the
asserted content claims logically entails a handset user’s
practice of handset claims or any other claims. 6 The
6 The only handset claim that defendants discuss—
claim 7 of the ’838 patent, as modified on reexamination—
requires, among other things, that the handset receive
from the user an input “specifying an action to delete,
forward, or reply to be performed on the information
corresponding to the notification message.” See supra pp.
7–8. Defendants’ discussion of the claim does not address
that limitation or suggest that it must be met for a hand-
set to do what is contemplated by all asserted content
claims. Defendants’ Br. at 6–7.
HELFERICH PATENT LICENSING v. THE NEW YORK TIMES 17
district court did not conclude otherwise. As defendants
present these cases to us, then, handset acquirers’ prac-
tice of handset claims or any other claims is not necessari-
ly implied by content providers’ alleged infringement of
the content claims.
In short, the premise of defendants’ exhaustion de-
fense is that all handsets in the United States are li-
censed and that the asserted claims contemplate a use of
handsets by handset owners/possessors, one that does not
necessarily practice any of Helferich’s claims. Standing
on that simple ground enables defendants to urge across-
the-board exhaustion, without differentiation among
asserted content claims. We judge the exhaustion defense
on the basis presented to us.
B
We conclude that the exhaustion defense, as framed
by defendants here, does not bar Helferich’s claims.
Based on the record and arguments presented to us, these
cases raise an exhaustion question in the context of
multiple related and separately patentable inventions.
The situation, to simplify, involves a single inventor’s
coming up with two inventions presumed to be separately
patentable, one invention to be practiced by one group of
users, the other invention by another group, where each
invention tends to make the other more useful when thus
separately practiced. Defendants here rely on the recip-
rocal enhancement of utility to argue that the patentee’s
licensing of the first group terminates the patentee’s
rights against the second group for practicing the second
invention, when practicing the second invention in some
way contemplates the first group’s use of a product made
under the license (even if not actually embodying the first
invention). But the exhaustion doctrine’s lifting of patent-
law restrictions on a licensed product has never been
applied to terminate patent rights in such complementary
activities or goods in these circumstances. And we do not
18 HELFERICH PATENT LICENSING v. THE NEW YORK TIMES
think that this judicially fashioned doctrine should be
extended to do so in the present cases.
1
Exhaustion protects an authorized acquirer’s freedom
from the legal restrictions imposed by the patent statute.
The statute grants a patentee the right to exclude others
from, e.g., making or using or selling a patented inven-
tion, 35 U.S.C. § 154(a)(1), and it then imposes concomi-
tant legal restrictions on acts that violate the exclusivity
right by defining, in closely related terms, what it means
for a person to “infringe” the right, § 271. Patent exhaus-
tion removes those legal restrictions on certain persons in
certain circumstances: it eliminates the legal restrictions
on what authorized acquirers “can do with an article
embodying or containing an invention” whose initial sale
(or comparable transfer) the patentee authorized. Bow-
man v. Monsanto Co., 133 S. Ct. 1761, 1766 & n.2 (2013).
Specifically, once there has been an authorized sale of a
patented item, that sale “ ‘confers on the purchaser, or
any subsequent owner, ‘the right to use [or] sell’ the thing
as he sees fit.” Id. at 1766 (quoting United States v.
Univis Lens Co., 316 U.S. 241, 249–50 (1942)).
In applying and refining the doctrine for a century
and a half, the Supreme Court has considered various
issues about the doctrine’s scope, including issues con-
cerning the character of the article authorized to be sold
and its relation to the asserted claims. See Quanta Com-
puter, Inc. v. LG Elecs., Inc., 553 U.S. 617 (2008). But the
doctrine’s protection against infringement allegations has,
apparently, always remained within a limit that reflects
the core notion that exhaustion lifts legal restrictions on
an authorized acquirer. The doctrine has never applied
unless, at a minimum, the patentee’s allegations of in-
fringement, whether direct or indirect, entail infringe-
ment of the asserted claims by authorized acquirers—
either because they are parties accused of infringement or
HELFERICH PATENT LICENSING v. THE NEW YORK TIMES 19
because they are the ones allegedly committing the direct
infringement required by the indirect infringement
charged against other parties. Here, as noted, that is not
so, because infringement of the content claims has not
been asserted or shown to require that handset acquirers
are practicing those claims.
Thus, in Quanta, patent owner LGE alleged direct in-
fringement by Quanta, an authorized acquirer of chips
that LGE had authorized Intel to sell. See id. at 624. In
Univis, 316 U.S. at 243–48, an antitrust case, the conduct
at issue was patentee Univis’s assertion of patent claims
against downstream lens wholesalers and retailers after
authorizing their acquisition of blanks embodying the
claimed invention. Ethyl Gasoline Corp. v. United States,
309 U.S. 436, 455–57 (1940), also an antitrust case,
similarly involved a patentee’s assertion of patent claims
against jobbers’ sale of lead-treated fuel that it had au-
thorized refiners to make and to sell to them. In Motion
Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S.
502, 505–08 (1917), patentee Motion Picture Patents had
authorized Precision Machine to make and sell film
projectors that practiced Motion Picture’s patent on film-
feeding mechanics, then charged (a) direct infringement
by a “playhouse” operator that properly acquired one of
the Precision projectors by purchase followed by lease and
(b) indirect infringement by a supplier of film to the
operator based on the operator’s direct infringement by
use of the film. See also Keeler v. Standard Folding Bed
Co., 157 U.S. 659, 666 (1895) (suit against authorized
acquirer; “one who buys patented articles of manufacture
from one authorized to sell them becomes possessed of an
absolute property in such articles, unrestricted in time or
place”); Morgan Envelope Co. v. Albany Perforated Wrap-
ping Paper Co., 152 U.S. 425 (1894) (described infra);
Hobbie v. Jennison, 149 U.S. 355 (1893) (suit against
authorized acquirer); Adams v. Burke, 84 U.S. 453 (1873)
20 HELFERICH PATENT LICENSING v. THE NEW YORK TIMES
(suit against authorized acquirer); Bloomer v. Millinger,
68 U.S. 340, 350 (1863) (suit against authorized mak-
er/owner of machine; exhaustion protects “owner of the
machine”); Bloomer v. McQuewan, 55 U.S. 539 (1852)
(suit against authorized makers/owners of machines).
In short, the decisions finding exhaustion (or relying
on exhaustion to reject an antitrust defense) have done so
only when the patentee’s assertion of infringement was,
or depended on, an assertion that an authorized acquirer
was using the same invention by infringing the asserted
claims. Neither the parties nor we have identified any
case from the Supreme Court that has found exhaustion
without this common feature.
This court’s decisions appear to be in accord. Recent-
ly, for example, in LifeScan, 734 F.3d at 1365, the patent-
ee rested its allegation of indirect infringement by a
manufacturer of disposable test strips used in patented
blood-glucose meters on the assertion that use of such
strips with such meters would cause direct infringement
by the authorized acquirers of the meters. Similarly, in
Keurig, 732 F.3d at 1374, the patentee rested its allega-
tion of indirect infringement by the seller of coffee pods
for use with a patented coffee brewer on the assertion that
the use would cause direct infringement by the authorized
acquirers of the brewers. See also TransCore, LP v.
Electronic Transaction Consultants Corp., 563 F.3d 1271(Fed. Cir. 2009) (infringement suit against installation
firm given patented articles by purchaser); Tessera, Inc. v.
Int’l Trade Comm’n, 646 F.3d 1357, 1369–71 (Fed. Cir.
2011) (infringement charge, by ITC, against purchaser of
patented articles); Intel Corp. v. ULSI Sys. Tech., Inc., 995
F.2d 1566 (Fed. Cir. 1993) (infringement suit against
purchaser of patented articles); Hewlett-Packard Co. v.
Repeat-O-Type Stencil Mfg. Corp., 123 F.3d 1445 (Fed.
Cir. 1997) (infringement suit against purchaser of patent-
ed articles).
HELFERICH PATENT LICENSING v. THE NEW YORK TIMES 21
Because defendants rely heavily on Keurig, it is worth
stressing that Keurig does not depart from this pattern.
The allegation by the patentee in Keurig was that the
defendant was inducing a brewer owner to infringe the
asserted method claim. 732 F.3d at 1374. In that famil-
iar context, the court held that exhaustion covered the
method claim because it appeared in a patent that also
contained an apparatus claim reading on the acquired
brewer. Id. at 1374–75. That rationale is inapplicable to
five of the asserted seven patents here, even aside from
whether the rationale’s premise is present. And in fact
the premise is missing here: in contrast to Keurig, the
present cases involve no assertion that the defendants are
inducing or contributing to authorized acquirers’ in-
fringement of the claims asserted against defendants.
2
Finding exhaustion in the present cases would run
counter to the pronouncement of the Supreme Court—
dictum in Morgan, 152 U.S. 425—that is most on point for
the issue presented here. The Court in Morgan, address-
ing exhaustion, indicated the doctrine would not apply in
circumstances where the alleged infringement involved
distinct, though related, validly patented inventions. Id.
at 435. This court, among others, has noted Morgan’s
significance for such circumstances.
In Morgan, the plaintiff, Morgan Envelope Co., owned
(by assignment) patents on (1) a toilet paper dispenser, (2)
an “oval roll” of toilet paper designed to be used with the
dispenser, and (3) a combination including the dispenser
and the roll. 152 U.S. at 429–31. The defendant, Albany
Perforated Wrapping Paper Co., resold dispensers it had
acquired from Morgan (i.e., it was an authorized acquir-
er), and it also sold its own version of oval rolls; but
Morgan “refused to sell [dispensers] except to persons also
ordering [Morgan’s] paper.” Id. at 431–32. Morgan sued
22 HELFERICH PATENT LICENSING v. THE NEW YORK TIMES
Albany for infringing both the oval-roll and the dispenser-
roll-combination patents by selling new rolls.
The Supreme Court first invalidated Morgan’s patent
on its “oval roll” technology, id. at 427–30, then addressed
Morgan’s allegation that Albany infringed its combination
patents by selling the oval rolls with knowledge that its
customers would combine them with dispensers, id. at
431–32. The Court concluded that, where an unpatented
article (like the oval roll, post-invalidation) “is an article
of manufacture perishable in its nature . . . which must be
renewed periodically,” the patentee could not restrict its
sale. Id. at 433. Individuals who had lawfully purchased
the dispenser-and-roll combination did not infringe the
combination patents by refilling the dispensers with the
unpatentable rolls, and consequently Albany was free to
manufacture and sell paper rolls for a willing consumer’s
use without risking infringement liability. Id. at 435.
In reaching its conclusion, the Court carefully distin-
guished a circumstance in which the patent owner sold to
purchasers two distinct, separately patentable inventions,
even when they are designed to be used together. Specifi-
cally, the Court approved the treatment of that situation
by the Circuit Court for the District of New Hampshire in
Aiken v. Manchester Print Works, 1 F. Cas. 245, No. 113
(C.C.D.N.H. 1865), speaking through Circuit Justice
Clifford. See Morgan, 152 U.S. at 435.
In Aiken, Walter Aiken owned patents on—and sold
as a pair—both a knitting machine and needles specifical-
ly designed for use in the machine. Aiken, 1 F. Cas. at
245; see Morgan, 152 U.S. at 435 (describing Aiken). The
needles wore out after about four weeks of use, Aiken, 1 F.
Cas. at 245, and the machine would not work without the
patented needles, id. at 246. Declaring that the machine
and its needles had “become private, individual property,”
insulated from infringement liability by virtue of an
authorized sale, the court held that while owners may
HELFERICH PATENT LICENSING v. THE NEW YORK TIMES 23
“repair the needles they purchased, . . . they cannot
manufacture new ones, without license,” because “the
needle is subject to a patent.” Id. at 247. The Morgan
Court expressly embraced the Aiken court’s analysis,
understanding it to mean that the sale of the machine
along with its separately patented needles “did not confer
upon the purchaser any right, after the needles were worn
out and became useless, to manufacture other needles,
and use the same in the knitting machine so sold and
purchased.” Morgan, 152 U.S. at 435.
The Morgan Court thus indicated that, even though
an authorized buyer of product X was free of the patent
owner’s patent on that product, the buyer could not, by
virtue of his purchase, prevent the patent owner from
enforcing his patent as to product Y, even though Y was
specifically designed to be used with X and, at a mini-
mum, made X more useful than it otherwise would be
and, indeed, was essential to X’s utility. In LifeScan,
supra, this court underscored the significance of Morgan’s
distinction between situations where related, complemen-
tary products are both patented and situations where only
one is patented. Specifically, LifeScan relied on the
absence of a patent on product Y (test strips used in a
glucose test meter) in concluding that the authorized sale
of product X (the glucose meters) exhausted the patent
owner’s method patent on the two products used together.
LifeScan, 734 F.3d at 1371 (“To be sure, if a patent had
actually issued on the strips, the patentability of the
strips could be relevant to exhaustion. That principle was
announced in Morgan . . . .”).
The Seventh Circuit’s holding in Hunt v. Armour &
Co., 185 F.2d 722, 729 (7th Cir. 1950), is to a similar
effect. The patentee had separate (valid) claims on (a) a
machine for plucking chicken feathers and (b) components
(fingers) for use in the machine. When the patentee sued
the defendant for infringement based on use of licensed
fingers in machines it had bought from an unlicensed
24 HELFERICH PATENT LICENSING v. THE NEW YORK TIMES
manufacturer, the defendant urged exhaustion as a
defense, on the ground that it had bought, in a sale au-
thorized by the patentee, the components it was using
with the machine. Id. The Seventh Circuit rejected the
defense because of the distinctness of the claimed ma-
chine and component inventions. Id.; see also C. & R.
Research Corp. v. Write, Inc., 19 F.2d 380, 381 (D. Del.
1927) (“[I]n order to sustain the main contention of the
defendant, it is essential that there be found in the mere
sale of the machine by the patentee an implied license,
running to the purchaser and subsequent owners of the
machine, to make the separately patented parts to repair
the machine as a whole. I think such license cannot be
inferred from a mere sale.”).
The Morgan Court’s approval of Aiken is contrary to
the theory advanced by defendants here—that exhaustion
as to product X ends the patentee’s rights even as to a
validly patented product Y, simply because the intended
utility of X would be diminished by permitting the patent-
ee to preserve his patent rights over Y. Under the Mor-
gan/Aiken principle, exhaustion is inapplicable even when
it is the owner of product X that would also be using
product Y. The present cases seem a fortiori ones: here, it
is not even the owner of X but someone else who is using
Y, to the indirect benefit of X’s owner.
3
Patent exhaustion is a judicially fashioned doctrine
without a specific source in congressionally enacted text
stating the terms of this limitation on patent rights. See
Bloomer v. McQuewan, 55 U.S. at 549–50. We presume,
from Congress’s refusal to disturb the existing decisional
law of this doctrine (which predated the 1952 Act by
nearly a century), an implicit authorization to continue
applying the doctrine within its familiar boundaries. See
also 35 U.S.C. § 273(d) (without defining “exhaust[ion],”
giving sale or disposition by person having prior-use
HELFERICH PATENT LICENSING v. THE NEW YORK TIMES 25
defense same exhaustion effect as sale or disposition by
patent owner); 35 U.S.C. § 273(b)(2) (2006). But we do not
think that Congress has granted the courts a license to
erase those boundaries and expand the doctrine into
difficult new territory unmapped by lines drawn, or even
sketched, by Congress. That would be the result of what
defendants stressed at oral argument as their core posi-
tion—that exhaustion bars patent enforcement based on a
practical inquiry into whether enforcement would con-
strain authorized acquirers’ use of the articles they ac-
quired.
The authorities we have described do not support that
position in holdings and run counter to it in pronounce-
ments. Moreover, even outside this setting, there is a
familiar, common-sense distinction between legal re-
strictions applicable to one person and indirect (positive
or negative) effects on that person of legal constraints
imposed on another person. It is reflected, for example, in
traditional non-constitutional third-party standing doc-
trine, whose very existence presupposes that one person
may be adversely affected by (suffer injury in fact from)
legal constraints on another and yet not have a legal right
to seek elimination of those constraints. See, e.g., Kow-
alski v. Tesmer, 543 U.S. 125, 129–31 (2004); Allen v.
Wright, 468 U.S. 737, 751 (1984).
The role that the exhaustion doctrine has played to
date—avoiding re-imposition of section 271 constraints on
an authorized acquirer—reflects the doctrine’s origin in
common-law rules limiting servitudes, and specifically
alienability restrictions, on personal property. In
Kirtsaeng v. John Wiley & Sons, Inc., the Supreme Court
explained the “impeccable historic pedigree” of the Copy-
right Act’s express “first sale” doctrine, codified at 17
U.S.C. § 109(a), which authorizes a lawful owner of a copy
to sell or dispose of it without permission from the copy-
right owner. 133 S. Ct. 1351, 1363 (2013) (describing the
doctrine as rooted in the common law’s refusal to allow
26 HELFERICH PATENT LICENSING v. THE NEW YORK TIMES
the seller of property to “control the resale or other dispo-
sition of a chattel once sold”). The common-law back-
ground, coupled with the fact that exhaustion is triggered
by “authorized transfers of title in [the] property” at issue,
LifeScan, 734 F.3d at 1377, fits the doctrine’s limited role
to date: ensuring the continued absence of certain legal
restrictions on the rights of the transferee (and successors)
in the acquired item.
Defendants’ focus on practical enhanced utility for the
authorized acquirer as a basis for limiting a patentee’s
rights against other persons proves too much. As defend-
ants acknowledged at oral argument, that rationale would
sometimes apply to allow invocation of exhaustion to bar
the patentee from enforcing a patent claim against the
making, selling, and using of new, patentee-unauthorized
copies of an article covered by the claim. For example,
suppose that buyer A’s enjoyment of a walkie-talkie
bought with the patentee’s authorization would be im-
paired unless other people (B, C, and D) also had their
own copies of the same patented walkie-talkie required
for communication with A. Under defendants’ rationale,
exhaustion could be invoked to bar the patentee’s en-
forcement of the patent to prevent the unauthorized
making of copies for, or their sale to or use by, B, C, and
D. The inquiry, under defendants’ rationale, would be
how much A would benefit from being able to communi-
cate with B, C, and D. Oral Argument at 35:30–38:40,
Helferich Patent Licensing, LLC v. The New York Times
Co., No. 2014-1196; id. at 52:45–53:30 (Counsel for de-
fendants: “[I]f the two walkie-talkies . . . required com-
munication with another walkie-talkie, then I think that
you would, could have exhaustion as to the individual
transactions at issue, because [person A] paid for his
walkie-talkie, he should be able to communicate with
another person, and at least as to his communications
there should be exhaustion.”).
HELFERICH PATENT LICENSING v. THE NEW YORK TIMES 27
That approach would extend exhaustion far beyond
the doctrine’s traditional scope, and it does not lie within
a sensible range of judicial elaboration pursuant to im-
plied congressional authority. The economic implication
would be dramatic. As the Supreme Court said in Bow-
man about the suggestion that “simple copying [is] a
protected use,” if defendants’ rationale were accepted as a
substitute for a focus on the authorized acquirer’s own
legal rights, “a patent would plummet in value after the
first sale of the first item containing the invention” in a
broad range of market circumstances. 133 S. Ct. at 1768.
In the walkie-talkie example, the patentee would have to
demand an exorbitant, likely unachievable, price for the
first item if selling it terminated patent rights as to other
potential users. Subjecting patentees to such impractica-
ble limits could be expected to have a depressing effect on
investments in innovation in many areas.
It is commonplace that a product in one person’s
hands can vastly increase in value if many others possess
the same product. Telephones, software, and social-
networking platforms are just a few of the many products
whose value to each individual purchaser increases as
more people buy or use the product. See, e.g., Memoran-
dum of the United States of America In Support of Motion
To Enter Final Judgment and In Opposition To The
Positions of I.D.E. Corporation and Amici, Exh. 1 at 6
(Decl. of Kenneth J. Arrow), United States v. Microsoft
Corp., No. C.A. 94–1564 (D.D.C., Jan. 18, 1995); Mark A.
Lemley and David McGowan, Legal Implications of Net-
work Economic Effects, 86 Cal. L. Rev. 479 (1998). Even
more generally, “complementary goods” are pervasive: a
television’s value to a consumer depends on others’ de-
ploying transmission technology and others’ creating and
transmitting programs; a computer operating system’s
value depends on the programs written to run on that
system. See Arrow Decl. at 6; Joseph Farrell & Garth
Saloner, Standardization, Compatibility, and Innovation,
28 HELFERICH PATENT LICENSING v. THE NEW YORK TIMES
16 RAND J. Econ. 70, 70–71 (1985). Such phenomena are
ubiquitous.
Because complements may be important to a product’s
success, it is economically sensible to expect a single
entity to engage in innovation in complementary goods to
jump-start the launch of products and enhance their
value. 7 Such economically productive complementary
innovation is reasonably likely to generate complemen-
tary patents in the hands of a single patentee. Defend-
ants’ practical-effects approach would therefore open
substantial new fields of inquiry for exhaustion doctrine.
And it would do so, as far as we have been shown, with no
reliable basis for judicial fashioning of standards that
would guarantee an appropriate balance of innovation
and efficiency results and set stable, predictable bounda-
ries on what amounts to a rule defining property rights.
Indeed, an expansion of exhaustion doctrine could do
harm to existing patterns of licensing. Within the bound-
aries of the current doctrine of exhaustion, a patentee
owning multiple patents covering complementary goods
produced by different producers has the freedom to nego-
tiate different licenses, subject to all the complexities and
variations of market forces and existing institutional
structures. We have no reason to conclude that inefficien-
7 See, e.g., Cablevision Sys. Corp. v. FCC, 649 F.3d
695, 721 (D.C. Cir. 2011) (recognizing innovation benefits
of some vertical integration, e.g., cable-television opera-
tors created much new video programming); Stanley M.
Besen & Joseph Farrell, Choosing How to Compete: Strat-
egies and Tactics in Standardization, 8 J. Econ. Persp.
117, 123 (Spring 1994); see generally David S. Evans, The
Antitrust Economics of Multi-Sided Platform Markets, 20
Yale J. on Reg. 325 (2003); Daniel F. Spulber, Solving the
Circular Conundrum: Communication and Coordination
in Internet Markets, 104 Nw. U.L. Rev. 537 (2010).
HELFERICH PATENT LICENSING v. THE NEW YORK TIMES 29
cies result from this freedom—or, more precisely, that this
freedom yields greater inefficiencies than would result
from an expansion of exhaustion doctrine, or that disrupt-
ing arrangements negotiated through this freedom would
produce net benefits. In the recognition of what we do not
know we find a strong reason to avoid expanding the
judicial doctrine as defendants suggest.
Our reluctance to adopt defendants’ proposed expan-
sion is in accord with what two scholars have described as
our legal tradition’s general disfavoring of judicial, flexi-
bility-introducing changes in the “forms” or “dimensions”
of property rights. Thomas W. Merrill & Henry E. Smith,
Optimal Standardization in the Law of Property: The
Numerus Clausus Principle, 110 Yale L.J. 1 (2000).
Exhaustion doctrine, following the common-law limitation
on servitudes on chattels, creates an implied-in-law
property right based on an authorized acquisition, beyond
what an implied-in-fact analysis would support under
“implied license” principles. Caution about expanding the
reach of exhaustion is of a piece with the broader judicial
practice of generally maintaining the contours of property
rights in the absence of legislative prescriptions.
4
Neither statutory provisions nor elements found with-
in existing exhaustion doctrine supply good grounds for
extending the doctrine to cover these cases as presented
to us. Most generally, Congress has not provided perti-
nent guidance on exhaustion in the patent setting. In
contrast, Congress included an express provision in the
Copyright Act stating the terms of a general exhaustion
(“first sale”) limitation on the copyright law’s general
grant of exclusivity rights. See 17 U.S.C. § 109(a). After
extensive industry-wide consultations, Congress also
enacted additional protections for lawful acquirers of
computer-program copies, limiting copyright owners’
rights against third parties in specified circumstances
30 HELFERICH PATENT LICENSING v. THE NEW YORK TIMES
where authorized acquirers’ enjoyment of their copies
requires the involvement of the third parties in otherwise-
infringing activities. 17 U.S.C. § 117(a)(1). 8 In the patent
statute, Congress has not codified the exhaustion doctrine
itself. Nor has it enacted a counterpart to the copyright
law’s carefully crafted extension of owner protection—an
extension whose existence, however, tends to reinforce the
premise that the general “first sale” rule offers limited
protection to third parties. Cf. eBay Inc. v. Mer-
cExchange, LLC, 547 U.S. 388, 392–93 (2006) (analogizing
the Court’s treatment of injunctions between owners of
copyrights and patents); LifeScan, 734 F.3d at 1375–76
(looking to copyright law to determine whether “author-
ized sale[s]” include items transferred by gift).
Turning from what can be found in the statutes to ex-
haustion doctrine itself, defendants rely on the often-
8 Section 117(a) says that “it is not an infringement
for the owner of a copy of a computer program to make or
authorize the making of another copy or adaptation of that
computer program provided: (1) that such a new copy or
adaptation is created as an essential step in the utiliza-
tion of the computer program.” 17 U.S.C. § 117(a)(1)
(emphasis added); see Krause v. Titleserv, Inc., 402 F.3d
119, 125 (2d Cir. 2005); Softech Worldwide, LLC v. Inter-
net Tech. Broad. Corp., 761 F. Supp. 2d 367, 373–74 (E.D.
Va. 2011). Section 117 resulted from the work of the
National Commission on New Technological Uses of
Copyrighted Works (CONTU), established by Congress in
1974. Pub. L. No. 93-573, § 201, 88 Stat. 1873, 1873–74
(1984); see Robert P. Merges, One Hundred Years of
Solicitude: Intellectual Property Law, 1900-2000, 88 Cal.
L. Rev. 2187, 2198–200 (2000) (“CONTU . . . might well
serve as a paradigm for intellectual property policymak-
ing.”).
HELFERICH PATENT LICENSING v. THE NEW YORK TIMES 31
articulated principle that exhaustion doctrine seeks to
prevent “double recoveries.” Defendants’ Br. at 28 (citing
Keeler, 157 U.S. at 663 (patentees “are never entitled to
but one royalty for a patented machine”) (internal quota-
tions omitted)). But that principle has never served as an
independent test for determining whether exhaustion
applies. It is hard to see how it could do so unless courts
first established the dollar value of the proper reward to
determine when the patentee had received it and there-
fore had to stop seeking additional recoveries. Exhaus-
tion doctrine has never required such an inquiry, which
would present difficulties akin to those recognized in
other areas where the judicial determination of a proper
price has been avoided. 9 Instead, the principle of limiting
a patentee to one royalty for an embodiment of an inven-
tion expresses an underlying goal that is achieved, indi-
rectly, by reliance on other standards that define when
exhaustion applies based on the sale of certain items.
Once such an item is sold, the conclusion follows that
further exaction of royalties from an owner’s use of that
item would be deemed a “double recovery.” Something
other than “double recovery,” however, must supply the
tests to justify ultimately using that language as a con-
clusion.
In Quanta, the Court, following Univis, considered
whether the authorized sale of an article triggered ex-
haustion of method claims by asking if the article “sub-
9 See, e.g., Verizon Commc’ns Inc. v. Law Offices of
Curtis V. Trinko, LLP, 540 U.S. 398, 408 (2004) (in the
antitrust context, courts are “ill suited” “to act as central
planners, identifying the proper price, quantity, and other
terms of dealing”); Town of Concord v. Boston Edison Co.,
915 F.2d 17, 25 (1st Cir. 1990) (Breyer, C.J.) (“[A]ntitrust
courts normally avoid direct price administration, relying
on rules and remedies . . . that are easier to administer.”).
32 HELFERICH PATENT LICENSING v. THE NEW YORK TIMES
stantially embodied” the claimed method. Quanta, 553
U.S. at 637, 638; Univis, 316 U.S. at 250–51. The Court
summarized the inquiry as asking whether the sold
article “had no reasonable noninfringing use and included
all the inventive aspects of the patented methods.” Quan-
ta, 553 U.S. at 638. If the two questions were to be trans-
posed into this context, they would not help defendants’
case for exhaustion.
As to the “inventive aspects” portion: This court in
LifeScan indicated that the question is “whether the
additional steps needed to complete the invention from
the product are themselves ‘inventive’ or ‘noninventive.’ ”
734 F.3d at 1368. Here, if the inquiry compares handset
claims and content claims, we cannot find that either set
wholly contains the invention found in the other. Each
has its own inventiveness, as the cases come to us.
As we have noted, defendants have not contended or
shown that all of the asserted content claims contemplate
handset users’ use of handset features that bring them
within the handset claims. Even aside from the fact that
some of the handset claims claim features such as selec-
tive enablement and disablement of acknowledgement
signals (what has been called “airplane mode”), see J.A.
2260–69, we cannot rule out inventiveness in the handset
claims apart from the content claims. Conversely, assert-
ed content claims claim operations performed or systems
run by content providers, such as updating content,
making it inaccessible after a time, and sending provider-
crafted content identifications. Handsets, and in particu-
lar handsets meeting the limitations of handset claims, do
not perform those functions. And defendants have identi-
fied no basis in the specification or prosecution history for
concluding that, for the asserted content claims, the
patented advance over prior art lay in the handsets. See
supra p. 15 n.5 (noting prosecution history); J.A. 2238–39,
2242–43, 2245–46, 2249 (Helferich’s expert discussing
HELFERICH PATENT LICENSING v. THE NEW YORK TIMES 33
novel features of the content claims not contained in
handset claims).
As to the “reasonable noninfringing use” portion of the
Quanta approach: For reasons related to those just noted,
this inquiry, which echoes language in 35 U.S.C. § 271(c)
defining contributory infringement, cannot help defend-
ants any more than does the “inventive aspects” inquiry.
We so conclude applying this inquiry in accordance with
this court’s clarification in LifeScan that “alternative uses
are relevant to the exhaustion inquiry under Quanta only
if they are both ‘reasonable and intended’ by the patent-
ee.” 734 F.3d at 1369 (quoting Quanta, 553 U.S. at 631)
(emphasis in original).
Thus, we cannot say that the inventions of the assert-
ed content claims have no reasonable use other than one
involving someone’s practicing of the handset claims,
because we cannot say that the asserted content claims
call on use of the inventive features of the handset claims:
at most an ordinary handset is required. And in the
opposite direction, defendants have not persuasively
demonstrated what functions the handset claims require;
but even if we accept defendants’ focus on text-to-
hyperlink rendering, Helferich submitted evidence, in
opposition to the defendants’ summary-judgment motion,
that there is a substantial, reasonable, intended use other
than one that plays a role in content providers’ infringe-
ment of the asserted content claims. Specifically, the
evidence is that text-to-hyperlink rendering has such a
use in receiving, and acting on, a notification from person
A about information available from person B (not under
A’s control), e.g., a URL for B’s website. J.A. 2253–55
(noting that “peer-to-peer” sharing of links to a third
party’s content does not perform all claims of the content
patents and nor does a content provider’s sharing with
subscribers a link to content controlled and hosted by a
different content provider).
34 HELFERICH PATENT LICENSING v. THE NEW YORK TIMES
For those reasons, it is not true that preserving
Helferich’s rights in the asserted content claims would
“render the licenses to the handset industry essentially
worthless.” Defendants’ Br. at 2; cf. Helferich, 965 F.
Supp. 2d at 978–79 (making the more limited point that
licenses from Helferich would provide “little value” to
handset makers and users if “the content provid-
er . . . could not send the message to the licensed handset
device without infringing the patents”). According to
Helferich’s evidence, handset users can take advantage of
the distinct handset inventions without content providers’
practicing the asserted content claims, including by using
features like airplane mode and by receiving from one
person information for obtaining content at the website of
another (not under the former’s control). Even more
fundamentally, as a practical matter, there is evident
value in obtaining a product (and permission to use it)—
for example, a network product like the walkie-talkie
mentioned above—whose value depends on other people
obtaining complementary products, even when the latter
must themselves obtain a patent license. This is a com-
monplace phenomenon, and what the initial product
licensees obtain is not just immediate value, which might
be limited, but the potential for increasing value as the
rights owner acts on its incentive to license the comple-
mentary sales. Thus, to the extent that the handset
inventions increase in value with the prevalence of con-
tent providers’ practicing the asserted content claims,
handset makers and users, in paying to make and acquire
the handsets, obtain benefits that increase over time as
Helferich licenses ever more content providers.
If the foregoing aspects of exhaustion doctrine do not
aid defendants here, neither do certain aspects of the
patent statute that speak to distinctiveness of inventions.
As we have already noted, see supra pp. 6–7, these cases
come to us without any finding or contention that any of
the asserted claims flunks the tests of “double patent-
HELFERICH PATENT LICENSING v. THE NEW YORK TIMES 35
ing”—either the “statutory” or “non-statutory” variety. In
particular, none of the asserted claims in the five patents
that contain only content claims have been determined (or
argued) to lack patentable distinctiveness over patents
that contain handset claims.
Finally, we do not see how defendants are aided, in
their effort to treat the handset and content claims as
effectively unified, by the history of Helferich’s patents at
issue. All of the relevant claims in the Helferich portfolio
evidently grew out of a common specification, but it is
common for a single specification to describe quite distinct
inventions. Section 121 recognizes that fact by granting
the PTO authority to restrict particular applications so as
to separate “independent and distinct inventions” into
separate applications. 35 U.S.C. § 121.
Here, the PTO imposed a number of restriction re-
quirements. That fact tends to confirm the independence
or distinctiveness of the separated claims, see MPEP
§§ 802.01, 803 (either suffices for restriction), as does the
absence of double-patenting impediments to issuance of
the final claims. On the other hand, two of the patents at
issue retain both handset and content claims—but even
for them, an inference of lack of distinctiveness is not
warranted. See 35 U.S.C. § 121 (“the Director may re-
quire the application to be restricted” if there are “two or
more independent and distinct inventions” (emphasis
added)); id. (“The validity of a patent shall not be ques-
tioned for failure of the Director to require the application
to be restricted to one invention.”); MPEP § 803.01 (“re-
quirements for restriction under 35 U.S.C. § 121 are
discretionary with the Director”). In these circumstances,
which provide some fuel for each side’s argument (though
perhaps not the same amount), all we need to say is that,
in the end, we do not draw from the patent history any
conclusion helpful to defendants’ exhaustion defense.
36 HELFERICH PATENT LICENSING v. THE NEW YORK TIMES
In short, we have scrutinized defendants’ argument
that the content and handset claims at issue are distin-
guished only by “semantics,” Defendants’ Br. at 34, or
“artful drafting,” id. at 39, by which they must mean that
different words are used for what amount to the same
substance. We have examined all suggested statutorily
and doctrinally grounded approaches to defining legal
identity of substance. We do not find that the two groups
of claims here can be collapsed into one. We see no sound
basis for expanding exhaustion doctrine to hold that
authorized sales to persons practicing the handset claims
exhaust the patentee’s rights to enforce the asserted
content claims against different persons.
C
The only issue before us is patent exhaustion. We
have decided the issue as it has been framed by the record
and arguments in these cases. We reject the defense for
the combination of reasons set forth. We need not rule
more broadly to indicate which reasons would be suffi-
cient, without others, for rejection of an exhaustion de-
fense framed more narrowly. In particular, we do not
foreclose an exhaustion defense that is tied to particular
handset claims and targets particular content claims; that
establishes premises for such particular claims not as-
serted or established in the broad-brush defense before
us—such as the presence of essentially the same inventive
features in paired handset-content claims, as determined
under a standard grounded in the statute, and the neces-
sity that someone practice a handset claim for an asserted
content claim to be practiced; and that tries to address the
other issues we have identified in rejecting the defense
presented to us. We express no view on the merits of any
such narrower defenses, which are not before us.
HELFERICH PATENT LICENSING v. THE NEW YORK TIMES 37
CONCLUSION
For the foregoing reasons, we reverse the judgment of
the district court.
REVERSED