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Posts Tagged: "International Exhaustion"

Questions Raised by the Lexmark Decision

Licensing a product instead of selling it may also be a tool for avoiding international patent exhaustion. It is common to distribute software via license, and this might avoid international exhaustion, although it will not work for all products. For example, licensing a drug makes little sense. However, re-importation of a drug would be regulated by the FDA, and the conditions and chain of control of drugs might mitigate some of the international exhaustion issues there. As such, many companies are evaluating the extent of the decision on international exhaustion and how it affects their industries. Since companies have thousands of contracts already in place and the parties will have to reevaluate their positions going forward, this is causing mass confusion and restructuring of contracts and relationships.

Supreme Court hears oral arguments in Impression Products v. Lexmark International

On Tuesday, March 21st, the U.S. Supreme Court heard oral arguments in Impression Products, Inc. v. Lexmark International, Inc. The case surrounding the sale and resale of printer ink cartridges will require the Supreme Court to decide whether U.S. law surrounding patent exhaustion allows post-sale restrictions and if sales of a patented article outside of the U.S. exhausts the U.S. patent rights in that article… Arguing on behalf of petitioner Impression Products was Andrew Pincus who led off by noting that the first sale doctrine, in which an initial authorized sale of a patented item terminates all patent rights to that item, was a principle that goes all the way back to the 15th century… Appearing next in oral arguments was deputy U.S. solicitor general Malcolm L. Stewart supporting reversal in part and vacatur in part… Following Stewart was Constantine Trela, arguing on behalf of respondent Lexmark International. Trela agreed with the government in a limited sense in that the Federal Circuit properly looked to the statute to find origins and limits on the exhaustion doctrine.

Supreme Court of the United States to Hear Oral Arguments in Patent Exhaustion Case

On March 21, 2017, the Supreme Court of the United States will hear oral arguments for the case of Impression Products, Inc. v. Lexmark International, Inc. The Court will decide: (i) whether the patent exhaustion doctrine applies in instances where a patented article is sold by the patent holder subject to a lawful and clearly communicated post-sale restriction; and (ii) whether the foreign sale of a U.S. patented article, authorized by the patent holder, exhausts the patent holder’s U.S. patent rights in that article.