Term: 2016
Docket: 15-1189
Impression Products v. Lexmark International
- Pro
15-1189 IMPRESSION PRODUCTS, INC. V. LEXMARK INTERNATIONAL, INC. DECISION BELOW: 816 F.3d 721 CERT. GRANTED 12/2/2016 QUESTION PRESENTED: The "patent exhaustion doctrine"-also known as the "first sale doctrine"-holds that "the initial authorized sale of a patented item terminates all patent rights to that item." Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617, 625 (2008). This case presents two questions of great practical significance regarding the scope of this doctrine on which the en banc Federal Circuit divided below: 1. Whether a "conditional sale" that transfers title to the patented item while specifying post-sale restrictions on the article's use or resale avoids application of the patent exhaustion doctrine and therefore permits the enforcement of such post-sale restrictions through the patent law's infringement remedy. 2. Whether, in light of this Court's holding in Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351, 1363 (2013), that the common law doctrine barring restraints on alienation that is the basis of exhaustion doctrine "makes no geographical distinctions," a sale of a patented article- authorized by the U.S. patentee-that takes place outside of the United States exhausts the U.S. patent rights in that article. LOWER COURT CASE NUMBER: 2014-1617, 2014-1619
The U.S. Supreme Court case Impression Products v. Lexmark International, 2016 revolved around patent law and the right of resale. Printer manufacturer Lexmark sold cartridges both domestically and internationally with a notice that they should not be refilled or resold after initial use. However, Impression Products bought used cartridges, refilled them, and then resold them in the United States at a lower price than new ones from Lexmark. The court ruled unanimously in favor of Impression Products stating that once an item is purchased (in this case printer cartridges), the patent holder's rights to control its use are exhausted regardless of any restrictions it may try to impose on future uses or sales.
In the dissenting opinion for Impression Products v. Lexmark International, Justice Ginsburg agreed with the majority that a domestic sale exhausts patent rights but disagreed on international sales. She argued that a foreign sale does not automatically exhaust U.S. patent rights and should be treated differently from domestic sales because U.S. law governs domestically but has no force abroad. Therefore, she contended, an overseas buyer's freedom to resell or use products without obtaining permission of the U.S Patentee is not guaranteed by any act of Congress; it is merely a matter of contract law governed by legal rules originating elsewhere.
