Supreme Court to hear patent case

The US Supreme Court said on Tuesday it would consider a technology patent case that could have far-reaching ramifications for computer makers and other industries with global supply chains.

The case was brought by a group of Taiwanese computer makers, who have accused a South Korean rival of using its patents in an effort to "shake down the entire computer industry for several billion dollars in duplicative licensing fees."

At issue is whether a patent holder can seek royalties from multiple companies as a patented product works its way through the manufacturing process.

The Taiwanese firms, led by Quanta Computer Inc (廣達電腦), are asking the justices to overturn a federal appeals court ruling delivered last year that they say would open the door for patent holders to do just that.

Quanta and the other companies manufacture computers under contract for US companies such as Hewlett-Packard Co, Gateway Inc and Dell Inc.

The three US companies filed court papers in support of Quanta.

They said the ruling by the Court of Appeals for the Federal Circuit "threatens to impose a huge financial and practical burden on makers of technology products."

The US corporations outsource much of the assembly of their computers to companies like Quanta, which is the world's largest contract manufacturer of laptop computers.