US Court Orders Full Bench to Consider First Sale Patent Rights

The largest printing consumables market in the world, is buzzing with the decision handed down by the US Court of Appeals for the Federal Circuit on April 14.

The case between Lexmark International and Impression Products before the Federal Circuit in Washington DC, has been receiving oral arguments from both sides since March 6. The case involves the patent rights of printer cartridges that are sold outside of the United States and also the prebate restriction rights on printer cartridges.

The three Federal Circuit judges have jointly ruled that the final decision must now made by the full bench of Federal Circuit judges, which means, in their collective view, the case has significant ramifications for not only the print consumables industry, but any industry wanting to retain their patent and other restriction rights after a product is first sold.

Patent attorney Edward O’Connor who represents Impression Products against Lexmark not only wants the case dismissed, but to see the current Jazz Photo laws overturned by the United States Supreme Court.

O’Connor told RT Media—publishers of the global Recycling Times magazine published separately each month in English, Chinese, Spanish, Russian and Korean languages—he is delighted with the decision handed down in Washington DC.  Even though the orders require both parties to file again for the full bench hearing, he sees it as an important strategic step forward for the aftermarket printing consumables industry. “The ‘en blanc’ decision by the three Federal Circuit judges,” he says, “ is usually reserved for complex cases of greater importance where prior court decisions have to be reconsidered, and is the necessary and most important legal step required to overturn the wrongful, existing patent laws relating to the origin of first sale.”

The April 14 decision by the Court of Appeals for the Federal Circuit have ordered both Lexmark and Impression Products to file new briefs addressing the following first sale and prebate issues:

The case involves certain sales, made abroad, of articles patented in the United States. In light of Kirtsaeng v. International Trade Commission, 264 F.3d 1094 (Fed. Cir. 2001), to the extent it ruled that a sale of a patented item outside the United States never gives rise to United States patent exhaustion.

The case involves (i) sales of patented articles to end users under a restriction that they use the articles once and then return them and (ii) sales of the same patented articles to resellers under a restriction that resales take place under the single-use-and-return restriction. Do any of those sales give rise to patent exhaustion? In light of Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008), should this court overrule Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700 (Fed. Cir. 1992), to the extent it ruled that a sale of a patented article, when the sale is made under a restriction that is otherwise lawful and within the scope of the patent grant, does not give rise to patent exhaustion?

Impression Products have 45 days, and Lexmark has 30 days, from April 14, to file their briefs to the “en banc” hearing. The oral arguments will be held at a time and date to be announced later.

Ed O’Connor will brief attendees further at the RT Imaging Summit & Expo on May 14 and 15 at the South Point Hotel and Casino in Las Vegas. He says he will provide updates and answer questions on the case at hand. Attendees can obtain more information, and register at: 


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