Government Supports Supreme Court Review Of Patent Exhaustion Dispute

For some, patent exhaustion is the feeling you get when you try to read the text of a patent and just can’t keep your eyes open. In the law, patent exhaustion is a legal doctrine that limits the scope of a patent–holder’s rights. The first valid sale of a patented product exhausts those rights, so that downstream purchasers cannot be accused of infringement. That is, if I buy a patented widget, then resell it to you, you don’t have to worry about being charged with infringement for using is—although I may still be on the hook.

In Impression Products v. Lexmark International, Impression Products has asked the Supreme Court to answer two questions: (1)  Can the exhaustion doctrine be evaded by restricting how the purchaser is allowed to use or sell the patented item? The Federal Circuit said, Yes. (2) Does the sale of a product outside the United States exhaust the patent–owner’s rights? Here, the Federal Circuit said, No. Both positions taken by the court of appeals limit the scope of patent exhaustion, increasing the range of behaviors that might count as infringement.

The Supreme Court asked the Solicitor General for the Government’s views, and the Government has just recommended that the Court take up both questions. (HT: Scotusblog) The Government’s position increases the odds of high court review, although it certainly does not guarantee it. Further, this case bears many of the hallmarks of patent cases taken up by the Supreme Court in recent years—a pro–patent decision by the Federal Circuit that limits the scope of defenses available to accused infringers in ways that are in tension with core patent policies.