Supreme Court Limits Post-Sale Patent Rights in Impression v. Lexmark
The Supreme Court ruled in​ Impression Products v. Lexmark International Tuesday against the Federal Circuit Court of Appeals on domestic and international patent exhaustion. “A patentee’s decision to sell a product exhausts all of its patent rights in that item,…
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regardless of any restrictions the patentee purports to impose or the location of the sale,” said Chief Justice John Roberts. The Supreme Court voted 8-0 to overturn precedent for domestic patent exhaustion and 7-1 to nix international exhaustion precedent. Justice Ruth Bader Ginsburg dissented on international exhaustion, contending a company retains overseas patent rights at sale. Justice Neil Gorsuch didn’t take part. The Federal Circuit had said a company could choose to exhaust only some of its patent rights at the time of a product’s sale, opening up the possibility of an infringement lawsuit if a user violated a company's reserved rights. The “misstep” in Federal Circuit “logic is that the exhaustion doctrine is not a presumption about the authority that comes along with a sale; it is instead a limit on ‘the scope of the patentee’s rights,’” the Supreme Court ruled. It's a disappointment but confirms that Lexmark’s “return program agreement remains clear and enforceable under contract law,” said General Counsel Bob Patton in a statement. Impression is happy the court "reaffirmed important limits on the scope of patent rights,” said counsel Andrew Pincus of Mayer Brown. The decision “is a strong recognition that consumer rights have primary importance,” said Public Knowledge Patent Reform Project Director Charles Duan.