Wednesday, April 24, 2024
US Supreme Court Issues Ruling That Patent Rights Are Exhausted After First Sale, Wherever That Sale Takes Place
In a short five-page decision rendered by Chief Justice Roberts today, the US Supreme Court exhausted patent rights on products first sold either domestically or overseas. The decision in Impression Products, Inc. v. Lexmark International, Inc. specifically involved the sale of printer cartridges. The decision was nearly unanimous with only Justice Ginsburg dissenting, and only to the question of international products sales.Specific unequivocal language included:
“1. Lexmark exhausted its patent rights in the Return Program cartridges that it sold in the United States. A patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose.
“2. Lexmark also sold toner cartridges abroad, which Impression Products acquired from purchasers and imported into the United States. Lexmark cannot sue Impression Products for infringement with respect to these cartridges. An authorized sale outside the United States, just as one within the United States, exhausts all rights under the Patent Act. Applying patent exhaustion to foreign sales is just as straightforward.” The decision is a slam dunk ending in favor of the aftermarket over Lexmark’s probate, return program. The industry’s fight with Lexmark over these issues has gone on for more than 20 years.
As an attorney admitted to the US Supreme Court Bar, I had a front row seat to the Oral Arguments. A long with Ed O’Connor, the attorney for Impression Products, I will spill more about the case and its larger impact for the aftermarket during RTISE-Americas in Cancun on June 22-23.
This is welcoming news for the remanufacturing Industry and encourages more reuse. The benefits to the consumer to have the right of choice is as important as embracing a more sustainable economy.
Does that mean Canon cannot claim the dongle gear patent infringement if the gear has been re-used?