While acknowledging the use of the components, as well as the companies' right to collect patent royalties on them, Vizio claims their suppliers, the actual manufacturers of the parts, are responsible for the royalties.
"Vizio's suppliers have licenses for the MPEG-2 patents, and Vizio believes that these licenses extend to Vizio's products," the company said in a statement.
As long as the manufacturers are actually paying the royalties it would seem that Vizio is correct. Just a week after the suit was filed the US Supreme Court threw out a similar case filed by LG Electronics claiming a computer maker owed money for using parts covered by their patents, but for which royalties had already been paid by the manufacturer.
In that case, the court ruled patent holders are only entitled to collect royalties once on each componenent, and that companies which subsequently use the parts in other products aren't liable for any additional royalties. This is known as 'patent exhaustion,' and according to Justice Clarence Thomas it's been the rule in such cases "for over 150 years."
Written by: Rich Fiscus @ 10 Jun 2008 5:45
