Appropriability, First Sale & Exhaustion

Abstract

The paper offers a new perspective on the first sale/patent exhaustion doctrine and, in doing so, challenges current critiques of the doctrine. Most fundamentally, the paper challenges the first sale doctrine's perception as a quasi-antitrust rule. Instead, the paper traces the development of the first sale doctrine as a bright-line rule demarcating the scope of IP rights and reflecting core IP rationales - most notably, the rationale of appropriability as the basis of property rights. The paper follows this historic account with an analysis of the potential doctrinal implications of the demise of the doctrine, and ends with an economic and competitive analysis of typical IP-related post-sale restrictions. Ultimately, the paper concludes that the doctrine, when properly construed, is both justified and well founded in property rationales.

Keywords: Intellectual Property, First Sale, First Sale Doctrine, Exhaustion, Patent Exhaustion, Antitrust, Appropriability, Quanta, Mallinckrodt, Patent, Copyright, post sale, rule of reason, misuse