On May 30, 2017, the Supreme held that a patentee's decision to sell a product exhausts all patent rights regardless of any restrictions on the sale or any sale outside the United States. Impression Products Inc. v. Lexmark Int'l, Inc., 581 U.S. __ (2017). Lexmark sold printer toner cartridges and required U.S. buyers to agree not to reuse or resell the cartridges. Impression refurbished used cartridges originally sold in the U.S. and later sold them. Lexmark sued Impression for patent infringement. The district court found that Lexmark exhausted its patent rights as to the cartridges sold in the U.S. but not to the cartridges sold outside the U.S. In an en banc decision, the Federal Circuit affirmed the lower court's holding that international sales do not exhaust the patent rights of the patentee and reversed the lower court's holding on domestic sales explaining that the patentee reserves its patent rights if there are restrictions on post-sale use.
In an unanimous decision, the Supreme Court reversed the Federal Circuit holding that Lexmark exhausted its patent rights in the U.S. despite the contractual restrictions and authorized sales outside the U.S. likewise exhausted any rights. In so ruling, the Court relied on English common law and its own precedence including its recent decision in Kirtsaeng that the limited, exclusive monopoly rights granted to a patentee is exhausted upon the sale of the patented product.
Full text of the opinion is available here.
In an unanimous decision, the Supreme Court reversed the Federal Circuit holding that Lexmark exhausted its patent rights in the U.S. despite the contractual restrictions and authorized sales outside the U.S. likewise exhausted any rights. In so ruling, the Court relied on English common law and its own precedence including its recent decision in Kirtsaeng that the limited, exclusive monopoly rights granted to a patentee is exhausted upon the sale of the patented product.
Full text of the opinion is available here.
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