QUANTA COMPUTER, INC., et al. v. LG ELECTRONICS, INC.

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617 OCTOBER TERM, 2007
Syllabus
QUANTA COMPUTER, INC., et al. v. LG
ELECTRONICS, INC.
certiorari to the united states court of appeals for
the federal circuit
No. 06–937. Argued January 16, 2008—Decided June 9, 2008
The longstanding doctrine of patent exhaustion limits the patent rights
that survive the initial authorized sale of a patented item. Respondent
(LGE) purchased, inter alia, the computer technology patents at issue
(LGE Patents): One discloses a system for ensuring that most current
data are retrieved from main memory, one relates to the coordination of
requests to read from and write to main memory, and one addresses the
problem of managing data traffic on a set of wires, or “bus,” connecting
two computer components. LGE licensed the patents to Intel Corpora
tion (Intel), in an agreement (License Agreement) that authorizes Intel
to manufacture and sell microprocessors and chipsets using the LGE
Patents (Intel Products) and that does not purport to alter patent ex
haustion rules. A separate agreement (Master Agreement) required
Intel to give its customers written notice that the license does not ex
tend to a product made by combining an Intel Product with a non-Intel
product, and provided that a breach of the agreement would not affect
the License Agreement. Petitioner computer manufacturers (Quanta)
purchased microprocessors and chipsets from Intel. Quanta then man
ufactured computers using Intel parts in combination with non-Intel
parts, but did not modify the Intel components. LGE sued, asserting
that this combination infringed the LGE Patents. The District Court
granted Quanta summary judgment, but on reconsideration, denied
summary judgment as to the LGE Patents because they contained
method claims. The Federal Circuit affirmed in part and reversed in
part, agreeing with the District Court that the patent exhaustion doc
trine does not apply to method patents, which describe operations to
make or use a product; and concluding, in the alternative, that exhaus
tion did not apply because LGE did not license Intel to sell the Intel
Products to Quanta to combine with non-Intel products.
Held: Because the doctrine of patent exhaustion applies to method pat
ents, and because the License Agreement authorizes the sale of com
ponents that substantially embody the patents in suit, the exhaustion
doctrine prevents LGE from further asserting its patent rights
with respect to the patents substantially embodied by those products.
Pp. 625–638.

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(a) The patent exhaustion doctrine provides that a patented item’s
initial authorized sale terminates all patent rights to that item. See,
e. g., Bloomer v. McQuewan, 14 How. 539. In the Court’s most recent
discussion of the doctrine, United States v. Univis Lens Co., 316 U. S.
241, patents for finished eyeglass lenses, held by the respondent (Un
ivis), did not survive the sale of lens blanks by the licensed manufacturer
to wholesalers and finishing retailers who ground the blanks into pat
ented finished lenses. The Court assumed that Univis’ patents were
practiced in part by the wholesalers and finishing retailers, concluding
that the traditional bar on patent restrictions following an item’s sale
applies when the item sufficiently embodies the patent—even if it does
not completely practice the patent—such that its only and intended use
is to be finished under the patent’s terms. The parties’ arguments
here are addressed with this patent exhaustion history in mind.
Pp. 625–628.
(b) Nothing in this Court’s approach to patent exhaustion supports
LGE’s argument that method claims, as a category, are never exhaust
ible. A patented method may not be sold in the same way as an article
or device, but methods nonetheless may be “embodied” in a product, the
sale of which exhausts patent rights. The Court has repeatedly found
method patents exhausted by the sale of an item embodying the method.
See Ethyl Gasoline Corp. v. United States, 309 U. S. 436, 446, 457;
Univis, supra, at 248–251. These cases rest on solid footing. Elimi
nating exhaustion for method patents would seriously undermine the
exhaustion doctrine, since patentees seeking to avoid exhaustion could
simply draft their claims to describe a method rather than an apparatus.
On LGE’s theory here, for example, although Intel is authorized to sell
a completed computer system that practices the LGE Patents, down
stream purchasers could be liable for patent infringement, which would
violate the longstanding principle that, when a patented item is “once
lawfully made and sold, there is no restriction on [its] use to be implied
for the [patentee’s] benefit,” Adams v. Burke, 17 Wall. 453, 457.
Pp. 628–630.
(c) The Intel Products embodied the patents here. Univis governs
this case. There, exhaustion was triggered by the sale of the lens
blanks because their only reasonable and intended use was to practice
the patent and because they “embodie[d] essential features of [the] pat
ented invention,” 316 U. S., at 249–251. Each of those attributes is
shared by the microprocessors and chipsets Intel sold to Quanta under
the License Agreement. First, LGE has suggested no reasonable use
for the Intel Products other than incorporating them into computer sys
tems that practice the LGE Patents: A microprocessor or chipset cannot

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Syllabus
function until it is connected to buses and memory. And as in Univis,
the only apparent object of Intel’s sales was to permit Quanta to incor
porate the Intel Products into computers that would practice the pat
ents. Second, like the Univis lens blanks, the Intel Products constitute
a material part of the patented invention and all but completely practice
the patent. The only step necessary to practice the patent is the appli
cation of common processes or the addition of standard parts. Every
thing inventive about each patent is embodied in the Intel Products.
LGE’s attempts to distinguish Univis are unavailing. Pp. 630–635.
(d) Intel’s sale to Quanta exhausted LGE’s patent rights. Exhaus
tion is triggered only by a sale authorized by the patent holder.
Univis, supra, at 249. LGE argues that this sale was not authorized
because the License Agreement does not permit Intel to sell its products
for use in combination with non-Intel products to practice the LGE Pat
ents. But the License Agreement does not restrict Intel’s right to sell
its products to purchasers who intend to combine them with non-Intel
parts. Intel was required to give its customers notice that LGE had
not licensed those customers to practice its patents, but neither party
contends that Intel breached that agreement. In any event, the notice
provision is in the Master Agreement, and LGE does not suggest that a
breach of that agreement would constitute a License Agreement breach.
Contrary to LGE’s position, the question whether third parties may
have received implied licenses is irrelevant, because Quanta asserts its
right to practice the patents based not on implied license but on exhaus
tion, and exhaustion turns only on Intel’s own license to sell products
practicing the LGE Patents. LGE’s alternative argument, invoking the
principle that patent exhaustion does not apply to postsale restrictions
on “making” an article, is simply a rephrasing of its argument that com
bining the Intel Products with other components adds more than stand
ard finishing to complete a patented article. Pp. 635–637.
453 F. 3d 1364, reversed.
Thomas, J., delivered the opinion for a unanimous Court.
Maureen E. Mahoney argued the cause for petitioners.
With her on the briefs were J. Scott Ballenger, Barry J.
Blonien, Melissa B. Arbus, Vincent K. Yip, Peter Wied, and
Maxwell A. Fox.
Deputy Solicitor General Hungar argued the cause for
the United States as amicus curiae in support of petitioners.
With him on the brief were former Solicitor General Clem

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620 QUANTA COMPUTER, INC. v. LG ELECTRONICS, INC.
Counsel
ent, Assistant Attorneys General Keisler and Barnett,
Deanne E. Maynard, Catherine G. O’Sullivan, David Seid
man, Mark R. Freeman, James A. Toupin, Stephen Walsh,
Shannon M. Hansen, and Heather F. Auyang.
Carter G. Phillips argued the cause for respondent. With
him on the brief were Virginia A. Seitz, Jeffrey T. Green,
Jeffrey P. Kushan, Rachel H. Townsend, and Quin M.
Sorenson.*
*Briefs of amici curiae urging reversal were filed for the American
Antitrust Institute by Albert A. Foer and Richard M. Brunell; for the
Automotive Engine Rebuilders Association et al. by Seth D. Greenstein
and Stefan M. Meisner; for the Computer & Communications Industry
Association by Jonathan Band; for the Consumers Union et al. by Fred
von Lohmann, Jason Schultz, and Marc N. Bernstein; for Dell Inc. et al.
by Andrew J. Pincus and Carl J. Summers; for Gen-Probe Inc. by Beth S.
Brinkmann, Ketanji Brown Jackson, Brian R. Matsui, and David C.
Doyle; for International Business Machines Corp. by Traci L. Lovitt and
Michael A. Carvin; for Motorola, Inc., by Russell E. Levine; and for Nokia
Corp. et al. by Kathleen M. Sullivan and David L. Cohen.
Briefs of amici curiae urging affirmance were filed for Aerotel, Ltd.,
et al. by Michael J. Doyle; for AmberWave Systems Corp. by Song K.
Jung, Lawrence S. Ebner, Adrian P. Mollo, Megan B. Hoffman, and
Bryan P. Lord; for iBiquity Digital Corp. by Roderick R. McKelvie, Rob
ert A. Long, Jr., Richard L. Rainey, and Theodore P. Metzler, Jr.; for
InterDigital Communications, LLC, et al. by Kenneth C. Bass III and
Robert G. Sterne; for MPEG LA LLC by Garrard R. Beeney, Ann McLean
Jordan, and Kenneth Rubenstein; for Papst Licensing GmbH & Co. Kg
by Lawrence Rosenthal, Steven E. Feldman, and Leonard Friedman; for
Rembrandt IP Management, LLC, by Aaron M. Panner; for QUALCOMM
Inc. by Richard W. Clary; for Various Law Professors by F. Scott Kieff;
for Wi-LAN, Inc., by Robert E. Goodfriend, James N. Willi, and Joel L.
Thollander; and for Yahoo! Inc. by Christopher J. Wright, Timothy J. Si
meone, Joseph K. Siino, and Lisa G. McFall.
Briefs of amici curiae were filed for the American Intellectual Property
Law Association by Jeffrey I. D. Lewis; for the American Seed Trade As
sociation by Gary Jay Kushner and Lorane F. Hebert; for the Biotech
nology Industry Organization by Patricia A. Millett and Thomas C.
Goldstein; for CropLife International by Seth P. Waxman, Paul R. Q.
Wolfson, and Sambhav N. Sankar; for the Intellectual Property Owners
Association by Gary M. Hoffman and Kenneth W. Brothers; for the Licens

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Opinion of the Court
Justice Thomas delivered the opinion of the Court.
For over 150 years this Court has applied the doctrine of
patent exhaustion to limit the patent rights that survive the
initial authorized sale of a patented item. In this case, we
decide whether patent exhaustion applies to the sale of com
ponents of a patented system that must be combined with
additional components in order to practice the patented
methods. The Court of Appeals for the Federal Circuit held
that the doctrine does not apply to method patents at all and,
in the alternative, that it does not apply here because the
sales were not authorized by the license agreement. We
disagree on both scores. Because the exhaustion doctrine
applies to method patents, and because the license authorizes
the sale of components that substantially embody the patents
in suit, the sale exhausted the patents.
I
Respondent LG Electronics, Inc. (LGE), purchased a port
folio of computer technology patents in 1999, including the
three patents at issue here: U. S. Patent Nos. 4,939,641 (’641);
5,379,379 (’379); and 5,077,733 (’733) (collectively LGE Pat
ents). The main functions of a computer system are carried
out on a microprocessor, or central processing unit, which
interprets program instructions, processes data, and controls
other devices in the system. A set of wires, or bus, connects
the microprocessor to a chipset, which transfers data be
tween the microprocessor and other devices, including the
keyboard, mouse, monitor, hard drive, memory, and disk
drives.
The data processed by the computer are stored principally
in random access memory, also called main memory. Web
ster’s New World Dictionary of Computer Terms 334, 451
ing Executives Society (U. S. A. & Canada), Inc., by Joel E. Lutzker; for
NCR Corp. by Morgan Chu and Laura W. Brill; and for Technology Prop
erties Limited by Roger L. Cook.

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(8th ed. 2000). Frequently accessed data are generally
stored in cache memory, which permits faster access than
main memory and is often located on the microprocessor it
self. Id., at 84. When copies of data are stored in both the
cache and main memory, problems may arise when one copy
is changed but the other still contains the original “stale”
version of the data. J. Handy, Cache Memory Book 124 (2d
ed. 1993). The ’641 patent addresses this problem. It dis
closes a system for ensuring that the most current data are
retrieved from main memory by monitoring data requests
and updating main memory from the cache when stale data
are requested. LG Electronics, Inc. v. Bizcom Electronics,
Inc., 453 F. 3d 1364, 1377 (CA Fed. 2006).
The ’379 patent relates to the coordination of requests to
read from, and write to, main memory. Id., at 1378. Proc
essing these requests in chronological order can slow down
a system because read requests are faster to execute than
write requests. Processing all read requests first ensures
speedy access, but may result in the retrieval of outdated
data if a read request for a certain piece of data is processed
before an outstanding write request for the same data. The
’379 patent discloses an efficient method of organizing read
and write requests while maintaining accuracy by allowing
the computer to execute only read requests until it needs
data for which there is an outstanding write request. LG
Electronics, Inc. v. Asustek Computer, Inc., No. C 01–02187
CW etc., Order Construing Disputed Terms and Phrases,
p. 42 (ND Cal., Aug. 20, 2002). Upon receiving such a read
request, the computer executes pending write requests first
and only then returns to the read requests so that the most
up-to-date data are retrieved. Ibid.
The ’733 patent addresses the problem of managing the
data traffic on a bus connecting two computer components, so
that no one device monopolizes the bus. It allows multiple
devices to share the bus, giving heavy users greater access.
This patent describes methods that establish a rotating pri

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ority system under which each device alternately has prior
ity access to the bus for a preset number of cycles and heav
ier users can maintain priority for more cycles without
“hogging” the device indefinitely. Id., at 37–38.
LGE licensed a patent portfolio, including the LGE Pat
ents, to Intel Corporation (Intel). The cross-licensing
agreement (License Agreement) permits Intel to manufac
ture and sell microprocessors and chipsets that use the LGE
Patents (Intel Products). The License Agreement author
izes Intel to “ ‘make, use, sell (directly or indirectly), offer
to sell, import or otherwise dispose of ’ ” its own products
practicing the LGE Patents. Brief for Petitioners 8 (quot
ing App. 154).1 Notwithstanding this broad language, the
License Agreement contains some limitations. Relevant
here, it stipulates that no license
“ ‘is granted by either party hereto . . . to any third party
for the combination by a third party of Licensed Prod
ucts of either party with items, components, or the like
acquired . . . from sources other than a party hereto, or
for the use, import, offer for sale or sale of such combina
tion.’ ” Brief for Petitioners 8 (quoting App. 164).
The License Agreement purports not to alter the usual rules
of patent exhaustion, however, providing that, “ ‘[n]otwith
standing anything to the contrary contained in this Agree
ment, the parties agree that nothing herein shall in any way
limit or alter the effect of patent exhaustion that would oth
erwise apply when a party hereto sells any of its Licensed
Products.’ ” Brief for Petitioners 8 (quoting App. 164).
In a separate agreement (Master Agreement), Intel agreed
to give written notice to its own customers informing them
that, while it had obtained a broad license “ ‘ensur[ing] that
any Intel product that you purchase is licensed by LGE and
thus does not infringe any patent held by LGE,’ ” the license
1 App. 145–198 is sealed; where material contained therein also appears
in the parties’ unsealed briefs, citations are to the latter.

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“ ‘does not extend, expressly or by implication, to any prod
uct that you make by combining an Intel product with any
non-Intel product.’ ” Brief for Respondent 9 (quoting App.
198; emphasis deleted). The Master Agreement also pro
vides that “ ‘a breach of this Agreement shall have no effect
on and shall not be grounds for termination of the Patent
License.’ ” Brief for Petitioners 9 (quoting App. 176).
Petitioners, including Quanta Computer (collectively
Quanta), are a group of computer manufacturers. Quanta
purchased microprocessors and chipsets from Intel and re
ceived the notice required by the Master Agreement.
Nonetheless, Quanta manufactured computers using Intel
parts in combination with non-Intel memory and buses in
ways that practice the LGE Patents. Quanta does not mod
ify the Intel components and follows Intel’s specifications to
incorporate the parts into its own systems.
LGE filed a complaint against Quanta, asserting that the
combination of the Intel Products with non-Intel memory
and buses infringed the LGE Patents. The District Court
granted summary judgment to Quanta, holding that, for pur
poses of the patent exhaustion doctrine, the license LGE
granted to Intel resulted in forfeiture of any potential in
fringement actions against legitimate purchasers of the Intel
Products. LG Electronics, Inc. v. Asustek Computer Inc.,
65 USPQ 2d 1589, 1593, 1600 (ND Cal. 2002). The court
found that, although the Intel Products do not fully practice
any of the patents at issue, they have no reasonable nonin
fringing use and therefore their authorized sale exhausted
patent rights in the completed computers under United
States v. Univis Lens Co., 316 U. S. 241 (1942). Asustek,
supra, at 1598–1600. In a subsequent order limiting its
summary judgment ruling, the court held that patent ex
haustion applies only to apparatus or composition-of-matter
claims that describe a physical object, and does not apply to
process, or method, claims that describe operations to make
or use a product. LG Electronics, Inc. v. Asustek Com

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Opinion of the Court
puter, Inc., 248 F. Supp. 2d 912, 918 (ND Cal. 2003). Be
cause each of the LGE Patents includes method claims, ex
haustion did not apply.
The Court of Appeals for the Federal Circuit affirmed in
part and reversed in part. It agreed that the doctrine of
patent exhaustion does not apply to method claims. In the
alternative, it concluded that exhaustion did not apply be
cause LGE did not license Intel to sell the Intel Products to
Quanta for use in combination with non-Intel products. 453
F. 3d, at 1370.
We granted certiorari, 551 U. S. 1187 (2007).
II
The longstanding doctrine of patent exhaustion provides
that the initial authorized sale of a patented item terminates
all patent rights to that item. This Court first applied the
doctrine in 19th-century cases addressing patent extensions
on the Woodworth planing machine. Purchasers of licenses
to sell and use the machine for the duration of the original
patent term sought to continue using the licenses through
the extended term. The Court held that the extension of
the patent term did not affect the rights already secured
by purchasers who bought the item for use “in the ordinary
pursuits of life.” Bloomer v. McQuewan, 14 How. 539, 549
(1853); see also ibid. (“[W]hen the machine passes to the
hands of the purchaser, it is no longer within the limits of
the monopoly”); Bloomer v. Millinger, 1 Wall. 340, 351 (1864).
In Adams v. Burke, 17 Wall. 453 (1873), the Court affirmed
the dismissal of a patent holder’s suit alleging that a licensee
had violated postsale restrictions on where patented coffin
lids could be used. “[W]here a person ha[s] purchased a pat
ented machine of the patentee or his assignee,” the Court
held, “this purchase carrie[s] with it the right to the use of
that machine so long as it [is] capable of use.” Id., at 455.
Although the Court permitted postsale restrictions on the
use of a patented article in Henry v. A. B. Dick Co., 224 U. S.

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1 (1912),2 that decision was short lived. In 1913, the Court
refused to apply A. B. Dick to uphold price-fixing provisions
in a patent license. See Bauer & Cie v. O’Donnell, 229 U. S.
1, 14–17 (1913). Shortly thereafter, in Motion Picture Pat
ents Co. v. Universal Film Mfg. Co., 243 U. S. 502, 518 (1917),
the Court explicitly overruled A. B. Dick. In that case, a
patent holder attempted to limit purchasers’ use of its film
projectors to show only film made under a patent held by the
same company. The Court noted the “increasing frequency”
with which patent holders were using A. B. Dick-style li
censes to limit the use of their products and thereby using
the patents to secure market control of related, unpatented
items. 243 U. S., at 509, 516–517. Observing that “the pri
mary purpose of our patent laws is not the creation of private
fortunes for the owners of patents but is ‘to promote the
progress of science and useful arts,’ ” id., at 511 (quoting
U. S. Const., Art. I, § 8, cl. 8), the Court held that “the scope
of the grant which may be made to an inventor in a patent,
pursuant to the [patent] statute, must be limited to the in
vention described in the claims of his patent,” 243 U. S., at
511. Accordingly, it reiterated the rule that “the right to
vend is exhausted by a single, unconditional sale, the article
sold being thereby carried outside the monopoly of the pat
ent law and rendered free of every restriction which the ven
dor may attempt to put upon it.” Id., at 516.
2 The A. B. Dick Company sold mimeograph machines with an attached
license stipulating that the machine could be used only with ink, paper,
and other supplies made by the A. B. Dick Company. The Court rejected
the notion that a patent holder “can only keep the article within the control
of the patent by retaining the title,” A. B. Dick, 224 U. S., at 18, and
held that “any . . . reasonable stipulation, not inherently violative of some
substantive law,” was “valid and enforceable,” id., at 31. The only re
quirement, the Court held, was that “the purchaser must have notice that
he buys with only a qualified right of use,” so that a sale made without
conditions resulted in “an unconditional title to the machine, with no limi
tations upon the use.” Id., at 26.

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This Court most recently discussed patent exhaustion in
Univis, 316 U. S. 241, on which the District Court relied.
Univis Lens Company, the holder of patents on eyeglass
lenses, licensed a purchaser to manufacture lens blanks 3 by
fusing together different lens segments to create bi- and tri
focal lenses and to sell them to other Univis licensees at
agreed-upon rates. Wholesalers were licensed to grind the
blanks into the patented finished lenses, which they would
then sell to Univis-licensed prescription retailers for resale
at a fixed rate. Finishing retailers, after grinding the
blanks into patented lenses, would sell the finished lenses to
consumers at the same fixed rate. The United States sued
Univis under the Sherman Act, 15 U. S. C. §§ 1, 3, 15, alleging
unlawful restraints on trade. Univis asserted its patent mo
nopoly rights as a defense to the antitrust suit. The Court
granted certiorari to determine whether Univis’ patent mo
nopoly survived the sale of the lens blanks by the licensed
manufacturer and therefore shielded Univis’ pricing scheme
from the Sherman Act.
The Court assumed that the Univis patents containing
claims for finished lenses were practiced in part by the
wholesalers and finishing retailers who ground the blanks
into lenses, and held that the sale of the lens blanks ex
hausted the patents on the finished lenses. Univis, 316
U. S., at 248–249. The Court explained that the lens blanks
“embodi[ed] essential features of the patented device and
[were] without utility until . . . ground and polished as the
finished lens of the patent.” Id., at 249. The Court noted
that
“where one has sold an uncompleted article which, be
cause it embodies essential features of his patented in
vention, is within the protection of his patent, and has
3 Lens blanks are “rough opaque pieces of glass of suitable size, design
and composition for use, when ground and polished, as multifocal lenses in
eyeglasses.” Univis, 316 U. S., at 244.

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destined the article to be finished by the purchaser in
conformity to the patent, he has sold his invention so far
as it is or may be embodied in that particular article.”
Id., at 250–251.
In sum, the Court concluded that the traditional bar on pat
ent restrictions following the sale of an item applies when
the item sufficiently embodies the patent—even if it does not
completely practice the patent—such that its only and in
tended use is to be finished under the terms of the patent.
With this history of the patent exhaustion doctrine in
mind, we turn to the parties’ arguments.
III
A
LGE argues that the exhaustion doctrine is inapplicable
here because it does not apply to method claims, which are
contained in each of the LGE Patents. LGE reasons that,
because method patents are linked not to a tangible article
but to a process, they can never be exhausted through a sale.
Rather, practicing the patent—which occurs upon each use
of an article embodying a method patent—is permissible only
to the extent rights are transferred in an assignment con
tract. Quanta, in turn, argues that there is no reason to
preclude exhaustion of method claims, and points out that
both this Court and the Federal Circuit have applied exhaus
tion to method claims. It argues that any other rule would
allow patent holders to avoid exhaustion entirely by insert
ing method claims in their patent specifications.
Quanta has the better of this argument. Nothing in this
Court’s approach to patent exhaustion supports LGE’s argu
ment that method patents cannot be exhausted. It is true
that a patented method may not be sold in the same way as
an article or device, but methods nonetheless may be “em
bodied” in a product, the sale of which exhausts patent
rights. Our precedents do not differentiate transactions in
volving embodiments of patented methods or processes from

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those involving patented apparatuses or materials. To the
contrary, this Court has repeatedly held that method patents
were exhausted by the sale of an item that embodied the
method. In Ethyl Gasoline Corp. v. United States, 309 U. S.
436, 446, 457 (1940), for example, the Court held that the sale
of a motor fuel produced under one patent also exhausted the
patent for a method of using the fuel in combustion motors.4
Similarly, as previously described, Univis held that the sale
of optical lens blanks that partially practiced a patent ex
hausted the method patents that were not completely prac
ticed until the blanks were ground into lenses. 316 U. S.,
at 248–251.
These cases rest on solid footing. Eliminating exhaustion
for method patents would seriously undermine the exhaus
tion doctrine. Patentees seeking to avoid patent exhaustion
could simply draft their patent claims to describe a method
rather than an apparatus.5 Apparatus and method claims
“may approach each other so nearly that it will be difficult to
distinguish the process from the function of the apparatus.”
United States ex rel. Steinmetz v. Allen, 192 U. S. 543, 559
(1904). By characterizing their claims as method instead of
apparatus claims, or including a method claim for the ma
4 The patentee held patents for (1) a fluid additive increasing gasoline
efficiency, (2) motor fuel produced by mixing gasoline with the patented
fluid, and (3) a method of using fuel containing the patented fluid in com
bustion motors. Ethyl Gasoline Corp., 309 U. S., at 446. The patentee
sold only the fluid, but attempted to control sales of the treated fuel. Id.,
at 459. The Court held that the sale of the fluid to refiners relinquished
the patentee’s exclusive rights to sell the treated fuel. Id., at 457.
5 One commentator recommends this strategy as a way to draft patent
claims that “will survive numerous transactions regarding the patented
good, allowing the force of the patent to intrude deeply into the stream of
commerce.” Thomas, Of Text, Technique, and the Tangible: Drafting Pat
ent Claims Around Patent Rules, 17 J. Marshall J. Computer & Info. L.
219, 252 (1998); see also id., at 225–226 (advocating the conversion of appa
ratus claims into method claims and noting that “[e]ven the most novice
claims drafter would encounter scant difficulty in converting a patent
claim from artifact to technique and back again”).

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chine’s patented method of performing its task, a patent
drafter could shield practically any patented item from
exhaustion.
This case illustrates the danger of allowing such an end
run around exhaustion. On LGE’s theory, although Intel is
authorized to sell a completed computer system that prac
tices the LGE Patents, any downstream purchasers of the
system could nonetheless be liable for patent infringement.
Such a result would violate the longstanding principle that,
when a patented item is “once lawfully made and sold, there
is no restriction on [its] use to be implied for the benefit of
the patentee.” Adams, 17 Wall., at 457. We therefore re
ject LGE’s argument that method claims, as a category, are
never exhaustible.
B
We next consider the extent to which a product must em
body a patent in order to trigger exhaustion. Quanta ar
gues that, although sales of an incomplete article do not nec
essarily exhaust the patent in that article, the sale of the
microprocessors and chipsets exhausted LGE’s patents in
the same way the sale of the lens blanks exhausted the pat
ents in Univis. Just as the lens blanks in Univis did not
fully practice the patents at issue because they had not been
ground into finished lenses, Quanta observes, the Intel Prod
ucts cannot practice the LGE Patents—or indeed, function
at all—until they are combined with memory and buses in a
computer system. If, as in Univis, patent rights are ex
hausted by the sale of the incomplete item, then LGE has no
postsale right to require that the patents be practiced using
only Intel parts. Quanta also argues that exhaustion doc
trine will be a dead letter unless it is triggered by the sale
of components that essentially, even if not completely, em
body an invention. Otherwise, patent holders could author
ize the sale of computers that are complete with the excep
tion of one minor step—say, inserting the microprocessor

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into a socket—and extend their rights through each down
stream purchaser all the way to the end user.
LGE, for its part, argues that Univis is inapplicable here
for three reasons. First, it maintains that Univis should be
limited to products that contain all the physical aspects
needed to practice the patent. On that theory, the Intel
Products cannot embody the patents because additional
physical components are required before the patents can be
practiced. Second, LGE asserts that in Univis there was
no “patentable distinction” between the lens blanks and the
patented finished lenses since they were both subject to the
same patent. Brief for Respondent 14 (citing Univis, supra,
at 248–252). In contrast, it describes the Intel Products as
“independent and distinct products” from the systems using
the LGE Patents and subject to “independent patents.”
Brief for Respondent 13. Finally, LGE argues that Univis
does not apply because the Intel Products are analogous to
individual elements of a combination patent, and allowing
sale of those components to exhaust the patent would imper
missibly “ascrib[e] to one element of the patented combina
tion the status of [the] patented invention in itself.” Aro
Mfg. Co. v. Convertible Top Replacement Co., 365 U. S. 336,
344–345 (1961).
We agree with Quanta that Univis governs this case. As
the Court there explained, exhaustion was triggered by the
sale of the lens blanks because their only reasonable and in
tended use was to practice the patent and because they “em
bodie[d] essential features of [the] patented invention.” 316
U. S., at 249–251. Each of those attributes is shared by the
microprocessors and chipsets Intel sold to Quanta under the
License Agreement.
First, Univis held that “the authorized sale of an article
which is capable of use only in practicing the patent is a
relinquishment of the patent monopoly with respect to the
article sold.” Id., at 249. The lens blanks in Univis met

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this standard because they were “without utility until [they
were] ground and polished as the finished lens of the patent.”
Ibid. Accordingly, “the only object of the sale [was] to en
able the [finishing retailer] to grind and polish it for use as
a lens by the prospective wearer.” Ibid. Here, LGE has
suggested no reasonable use for the Intel Products other
than incorporating them into computer systems that practice
the LGE Patents.6 Nor can we discern one: A microproces
sor or chipset cannot function until it is connected to buses
and memory. And here, as in Univis, the only apparent ob
ject of Intel’s sales to Quanta was to permit Quanta to incor
porate the Intel Products into computers that would practice
the patents.
Second, the lens blanks in Univis “embodie[d] essential
features of [the] patented invention.” Id., at 250–251. The
essential, or inventive, feature of the Univis lens patents was
the fusing together of different lens segments to create bi
and trifocal lenses. The finishing process performed by the
finishing and prescription retailers after the fusing was not
unique. As the United States explained:
“The finishing licensees finish Univis lens blanks in pre
cisely the same manner as they finish all other bifocal
lens blanks. Indeed, appellees have never contended
that their licensing system is supported by patents cov
ering methods or processes relating to the finishing of
6 LGE suggests that the Intel Products would not infringe its patents if
they were sold overseas, used as replacement parts, or engineered so that
use with non-Intel products would disable their patented features. Brief
for Respondent 21–22, n. 10. But Univis teaches that the question is
whether the product is “capable of use only in practicing the patent,” not
whether those uses are infringing. 316 U. S., at 249 (emphasis added).
Whether outside the country or functioning as replacement parts, the Intel
Products would still be practicing the patent, even if not infringing it.
And since the features partially practicing the patent are what must have
an alternative use, suggesting that they be disabled is no solution. The
disabled features would have no real use.

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lens blanks. Consequently, it appears that appellees
perform all of the operations which contribute any
claimed element of novelty to Univis lenses.” Brief for
United States in United States v. Univis Lens Co., O. T.
1941, No. 855 etc., p. 10 (footnote and citations omitted).
While the Court assumed that the finishing process was cov
ered by the patents, Univis, supra, at 248–249, and the Dis
trict Court found that it was necessary to make a working
lens, United States v. Univis Lens Co., 41 F. Supp. 258, 262–
263 (SDNY 1941), the grinding process was not central to the
patents. That standard process was not included in detail in
any of the patents and was not referred to at all in two of
the patents. Those that did mention the finishing process
treated it as incidental to the invention, noting, for example,
that “[t]he blank is then ground in the usual manner,” U. S.
Patent No. 1,876,497, p. 2, or simply that the blank is “then
ground and polished,” U. S. Patent No. 1,632,208, p. 1, Tr. of
Record in United States v. Univis Lens Co., O. T. 1941,
No. 855 etc., pp. 516, 498.
Like the Univis lens blanks, the Intel Products constitute
a material part of the patented invention and all but com
pletely practice the patent. Here, as in Univis, the incom
plete article substantially embodies the patent because the
only step necessary to practice the patent is the application
of common processes or the addition of standard parts. Ev
erything inventive about each patent is embodied in the Intel
Products. They control access to main and cache memory,
practicing the ’641 and ’379 patents by checking cache mem
ory against main memory and comparing read and write re
quests. They also control priority of bus access by various
other computer components under the ’733 patent. Natu
rally, the Intel Products cannot carry out these functions un
less they are attached to memory and buses, but those addi
tions are standard components in the system, providing the
material that enables the microprocessors and chipsets to

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function. The Intel Products were specifically designed to
function only when memory or buses are attached; Quanta
was not required to make any creative or inventive decision
when it added those parts. Indeed, Quanta had no alterna
tive but to follow Intel’s specifications in incorporating the
Intel Products into its computers because it did not know
their internal structure, which Intel guards as a trade secret.
Brief for Petitioners 3. Intel all but practiced the patent
itself by designing its products to practice the patents, lack
ing only the addition of standard parts.
We are unpersuaded by LGE’s attempts to distinguish
Univis. First, there is no reason to distinguish the two
cases on the ground that the articles in Univis required the
removal of material to practice the patent while the Intel
Products require the addition of components to practice the
patent. LGE characterizes the lens blanks and lenses as
sharing a “basic nature” by virtue of their physical similar
ity, while the Intel Products embody only some of the “pat
entably distinct elements and steps” involved in the LGE
Patents. Brief for Respondent 26–27. But we think that
the nature of the final step, rather than whether it consists
of adding or deleting material, is the relevant characteristic.
In each case, the final step to practice the patent is common
and noninventive: grinding a lens to the customer’s prescrip
tion, or connecting a microprocessor or chipset to buses or
memory. The Intel Products embody the essential features
of the LGE Patents because they carry out all the inventive
processes when combined, according to their design, with
standard components.
With regard to LGE’s argument that exhaustion does not
apply across patents, we agree on the general principle: The
sale of a device that practices patent A does not, by virtue
of practicing patent A, exhaust patent B. But if the device
practices patent A while substantially embodying patent B,
its relationship to patent A does not prevent exhaustion of
patent B. For example, if the Univis lens blanks had been

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composed of shatter-resistant glass under patent A, the
blanks would nonetheless have substantially embodied, and
therefore exhausted, patent B for the finished lenses. This
case is no different. While each Intel microprocessor and
chipset practices thousands of individual patents, including
some LGE patents not at issue in this case, the exhaustion
analysis is not altered by the fact that more than one patent
is practiced by the same product. The relevant consider
ation is whether the Intel Products that partially practice a
patent—by, for example, embodying its essential features—
exhaust that patent.
Finally, LGE’s reliance on Aro is misplaced because that
case dealt only with the question whether replacement of one
part of a patented combination infringes the patent. First,
the replacement question is not at issue here. Second, and
more importantly, Aro is not squarely applicable to the ex
haustion of patents like the LGE Patents that do not disclose
a new combination of existing parts. Aro described combi
nation patents as “cover[ing] only the totality of the ele
ments in the claim [so] that no element, separately viewed,
is within the grant.” 365 U. S., at 344; see also Mercoid
Corp. v. Mid-Continent Investment Co., 320 U. S. 661, 667–
668 (1944) (noting that, in a combination patent, “the combi
nation is the invention and it is distinct from any” of its ele
ments). Aro’s warning that no element can be viewed as
central to or equivalent to the invention is specific to the
context in which the combination itself is the only inventive
aspect of the patent. In this case, the inventive part of the
patent is not the fact that memory and buses are combined
with a microprocessor or chipset; rather, it is included in the
design of the Intel Products themselves and the way these
products access the memory or bus.
C
Having concluded that the Intel Products embodied the
patents, we next consider whether their sale to Quanta ex

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hausted LGE’s patent rights. Exhaustion is triggered only
by a sale authorized by the patent holder. Univis, 316
U. S., at 249.
LGE argues that there was no authorized sale here be
cause the License Agreement does not permit Intel to sell
its products for use in combination with non-Intel products
to practice the LGE Patents. It cites General Talking Pic
tures Corp. v. Western Elec. Co., 304 U. S. 175 (1938), and
General Talking Pictures Corp. v. Western Elec. Co., 305
U. S. 124 (1938), in which the manufacturer sold patented am
plifiers for commercial use, thereby breaching a license that
limited the buyer to selling the amplifiers for private and
home use. The Court held that exhaustion did not apply
because the manufacturer had no authority to sell the ampli
fiers for commercial use, and the manufacturer “could not
convey to petitioner what both knew it was not authorized
to sell.” 304 U. S., at 181. LGE argues that the same prin
ciple applies here: Intel could not convey to Quanta what
both knew it was not authorized to sell, i. e., the right to
practice the patents with non-Intel parts.
LGE overlooks important aspects of the structure of the
Intel-LGE transaction. Nothing in the License Agreement
restricts Intel’s right to sell its microprocessors and chipsets
to purchasers who intend to combine them with non-Intel
parts. It broadly permits Intel to “ ‘make, use, [or] sell’ ”
products free of LGE’s patent claims. Brief for Petitioners
8 (quoting App. 154). To be sure, LGE did require Intel to
give notice to its customers, including Quanta, that LGE had
not licensed those customers to practice its patents. But
neither party contends that Intel breached the agreement in
that respect. Brief for Petitioners 9; Brief for Respond
ent 9. In any event, the provision requiring notice to
Quanta appeared only in the Master Agreement, and LGE
does not suggest that a breach of that agreement would con
stitute a breach of the License Agreement. Hence, Intel’s
authority to sell its products embodying the LGE Patents

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was not conditioned on the notice or on Quanta’s decision to
abide by LGE’s directions in that notice.
LGE points out that the License Agreement specifically
disclaimed any license to third parties to practice the patents
by combining licensed products with other components.
Brief for Petitioners 8. But the question whether third par
ties received implied licenses is irrelevant because Quanta
asserts its right to practice the patents based not on im
plied license but on exhaustion. And exhaustion turns only
on Intel’s own license to sell products practicing the LGE
Patents.
Alternatively, LGE invokes the principle that patent ex
haustion does not apply to postsale restrictions on “making”
an article. Brief for Respondent 43. But this is simply a
rephrasing of its argument that combining the Intel Products
with other components adds more than standard finishing to
complete a patented article. As explained above, making a
product that substantially embodies a patent is, for exhaus
tion purposes, no different from making the patented article
itself. In other words, no further “making” results from the
addition of standard parts—here, the buses and memory—to
a product that already substantially embodies the patent.
The License Agreement authorized Intel to sell products
that practiced the LGE Patents. No conditions limited In
tel’s authority to sell products substantially embodying the
patents. Because Intel was authorized to sell its products
to Quanta, the doctrine of patent exhaustion prevents LGE
from further asserting its patent rights with respect to the
patents substantially embodied by those products.7
7 We note that the authorized nature of the sale to Quanta does not
necessarily limit LGE’s other contract rights. LGE’s complaint does not
include a breach-of-contract claim, and we express no opinion on whether
contract damages might be available even though exhaustion operates to
eliminate patent damages. See Keeler v. Standard Folding Bed Co., 157
U. S. 659, 666 (1895) (“Whether a patentee may protect himself and his
assignees by special contracts brought home to the purchasers is not a

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IV
The authorized sale of an article that substantially embod
ies a patent exhausts the patent holder’s rights and prevents
the patent holder from invoking patent law to control post
sale use of the article. Here, LGE licensed Intel to practice
any of its patents and to sell products practicing those pat
ents. Intel’s microprocessors and chipsets substantially em
bodied the LGE Patents because they had no reasonable non
infringing use and included all the inventive aspects of the
patented methods. Nothing in the License Agreement lim
ited Intel’s ability to sell its products practicing the LGE
Patents. Intel’s authorized sale to Quanta thus took its
products outside the scope of the patent monopoly, and as a
result, LGE can no longer assert its patent rights against
Quanta. Accordingly, the judgment of the Court of Appeals
is reversed.
It is so ordered.
question before us, and upon which we express no opinion. It is, however,
obvious that such a question would arise as a question of contract, and not
as one under the inherent meaning and effect of the patent laws”).