Chapter 1 Introduction
3. Methodology of the Research
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influences on global market. The major economic entities of world will also be introduced about their legal status of exhaustion theories and how it has been applied in each region.
As mentioned in the earlier section, this research does not only provide a detail understanding about exhaustion doctrine and its effect on business world, but also to suggest a practice instruction for patent licensing management and strategies applied on Taiwan’s IT industry or even others. I will roughly overview the background and current circumstances of Taiwan IT industry in the beginning of Chapter 5. The present business environment in Taiwan, the current technology level, and business model running presently will also be taken place within this chapter to provide us a better vision about how this industry work and how good it has been managed up to day. Some discussions about how the current industries make their patenting and licensing decisions and agreement will also be stated.
According to the current limitations in IT industry while licensing, I will therefore provide a guideline for licensing strategies based on the earlier studies in the previous chapters. Here we can develop effective and enforceable legal and management suggestions on licensing which may possibly benefits the entities in Taiwan’s IT industry to achieve their ultimate goal.
3. Methodology of the Research
This research is emphasizing on figuring out a clear concept of patent exhaustion which enables to consequently bring the patentees and licensees an instruction regarding their licensing strategies. Patentees and licensees are normally recognized as affiliates, however, in many cases, are found standing at opposite position in terms of business. Patentees grant the license to licensees and expect to get the consideration in return, on the other hand, the licensees expect to earn the profit from manufacturing, selling, or using the patented articles in order to cover
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the royalties paid to the patentees. Patentees would expect to receive as much as royalties or consideration through license. Licensees, in contrary, would expect to pay the patentee as little as possible. This is also the reason why exhaustion doctrine nowadays becomes more important.
3.1. Research Philosophy and Approach
In terms of law research, Interpretivism is most common which can be often seen in the rulings of the Courts. The grounds of the legal proposition are not about the legal requirements in any jurisdiction but the question of what makes the content of the law as what it is. On the other word, to find out the concept of why the law is interpreted in certain form that we needs to first explain the factors and to understand the virtue of the law4. Although this research is not aimed to generate a new legal proposition, we are still required to review and analyze the past rulings granted by Court in order to understand the concept of the Patent exhaustion.
Therefore, Interpretivism will still be accepted to orientate us to see the whole phases of the proposition and to understand the purpose of the legislation.
Two standard approaches of research, deductive and inductive, have been normally accepted respectively to fulfill research. The purpose of this research is ultimately to generate a framework of strategic licensing for Patentees and Licensees by primarily reviewing the existing Court cases and literatures.
Furthermore, this framework is expected to be able to apply on general circumstances and meanwhile to meet the proposition of patent law. Hence, deductive approach is taken into account which was defined as “[R]esearch
approach involving the testing of a theoretical proposition by the employment of a
4 Stavropoulos, Nicos, & Interpretivist Theories of Law, The Stanford Encyclopedia of Philosophy (Fall 2008 Edition), Edward N. Zalta (ed.),
http://plato.stanford.edu/archives/fall2008/entries/law -interpretivist/
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research strategy specifically designed for the purpose of its testing .”
5Deductive research tends using data to test theory in accordance with the path it implements the whole research cycle6. I will therefore first collect the past Court rulings regarding Patent exhaustion and Post-sale Restrictions to present a clear jurisprudential concept. And the case of Quanta v. LGE will be discussed after to further point out its impact on U.S. Patent Law and the entities of the transactions.
3.2. Research Strategy
Legal research is somehow relative subjective due to regulation proposition and concept can be varied depends on the culture and politics of respectively countries. As mentioned in the previous sections, this research will emphasize on the concept of exhaustion doctrine and its philosophy related to patent law. No Judges can give their decisions or verdicts interfering with the other existing laws, therefore Interpretivist turns out becoming a significantly important method for Judges to analyze the factors and to grant their opinions. When matters are involved with law or regulations, most of time we can only consider the factors case by case and issues of Patent exhaustion have no exception. Therefore, Qualitative research will be employed here in order to implement this research. Qualitative research is based on a phenomenological paradigm which holds that reality is socially constructed through individual or collective definition of the situa tion7. The following chapter will first start from explaining the concept of the legislations regarding to Patent exhaustion and Post-sale Restrictions through some most recognized and significant litigations thereof. Accompanied with some discussions
5 Saunders et al, Research Methods for Business Students, 3rd Edition, Harlow: Financial Times :P Prentice Hall, at 476 (2000).
6 Eisenhard, Kathleen M., & Graebner, Melissa E., Theory Building From Cases: Opportunities and Challenges, 50 Academy of Management Journal 1, 25-32 (2007).
7 Taylor, S.J., & Bogdan, R., Qualitative Research Methods: The Search for Meanings, 2nd Edition, New York: John Wiley (1984)
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of scholars will then give an overview of this research and insight of the philosophy and proposition of exhaustion doctrine.
For the purpose to provide an instruction for patent licensing and management strategies suit to Taiwan’s IT Industry, to understand the present challenges the industry is facing to will be first taken into account. Quanta as one key player of Taiwan’s IT industry, winning the suit in U.S. Supreme Court against to LGE have been seen as an achievement in the development of Taiwan’s IT industry. Yet, Quanta was the only defendants in this litigation brought the suit to Supreme Court, rest of defendants either had chosen to settle or pay the penalty before or after Federal Circuit. Therefore, the case study of Quanta v. LGE will be hold as a research strategy to point out how licensing strategies is important to business.
Additionally, case studies can be used to accomplish various aims such as to provide description, test theory, or generate theory.8
Primarily, the Quanta case will be inducted to explain why this case has brought so much discussion and arguments. The effects to Patent Law and to the other legislations extended from exhaustion doctrine based on Quanta’s decision will be then taken into account for us to get the idea about what Quanta might or may impact the nowadays and future global market. Subsequently, I will have a study about the background of IT industry in Taiwan and to illustrate the challenges and limitations of the present licensing strategies. Based on the previo us studies, we will accordingly introduce a practical guideline or framework for Patent Licensing in order to provide patentee a better protection from triggering the exhaustion and grant licensee an understanding about how to avoid the end-run monopoly intended by patentees.
8 Eisenhard, Kathleen M., Building Theories from Case Study Research, 14 Academy of Management Rev. 4, at 532-550 (1989).