The U.S. Supreme Court issued a major intellectual property decision yesterday, essentially affirming the patent exhaustion rule, which is akin to the "first sale" doctrine in copyright law.

In other words, the patent or copyright monopoly doesn't extend past the first sale of the item. The rights owner can't perpetually control--or require royalties--from subsequent owners.

Here's a snippet from Legal Times via Law.com about the decision in Quanta Computer v. LG Electronics:

Supreme Court Limits Companies' Ability to Collect Multiple Royalties on Their Patents
Legal Times

The Supreme Court on Monday breathed new life into the doctrine of patent exhaustion -- thereby limiting the power of patent-holders over "downstream" transactions. In a unanimous ruling authored by Justice Clarence Thomas, the Court stood firm behind the 150-year-old doctrine, under which "the sale of a patented item terminates all patent rights to that item." In other words, the patent holder has little or no power to restrict what the purchaser does with the patented items after the first sale.

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