Licensing, Things, and Altera

Over at Conglomerate, my guest blogging continues this week. Today’s post involves some follow-up thoughts on Altera v. Clear Logic:

For reasons have to do with its business model and with the nature of programmable logic chips, Altera has effectively unbundled products and services that used to be delivered all together, and not so long ago, as function-specific, programmed semiconductors. Altera argued, in effect, that the unbundling didn’t affect its legal interest in selling the integrated product. CL argued the reverse — Altera created two things from one, and having done so, has to suffer competition in the second market even if it limits competition (via the licenses) in the first. The court disagrees, reading the Altera customer contracts in effect to preserve the identity of the designed chips, even if technologically, the Altera software and the chips themselves are distinct things. What looks like an (invalid) equitable servitude on the software turns out to be a (valid) method of defining what the single thing that Altera is selling.