55 Pages Posted: 11 Mar 2012
Date Written: April 26, 2011
The exhaustion doctrine, which limits certain rights conferred by the patent and copyright laws, implements the principle that once a rights owner has authorized the sale of an article embodying his protected intellectual property, he has earned the full reward to which the laws entitle him with respect to that article, and may no longer control the disposition of that article. Some courts have failed to apply this doctrine properly in cases with an international component, holding that exhaustion does not result from sale of a patented article abroad, or sale abroad of a copyrighted article that was manufactured abroad. These decisions allow the rights owner to receive a double reward from the sale and resale of a single article, vitiating the principle underlying the exhaustion doctrine.
The courts have been driven to this result by a belief that to hold otherwise would be to contravene the axiom that neither the patent nor the copyright laws apply extraterritorially. This Article argues that the reasoning behind these decisions is unsound: interpreting the intellectual property laws so that exhaustion results from the sale of an article abroad does not amount to an extraterritorial application of those laws. Courts should adhere to the single-reward principle in international no less than in domestic contexts, and concerns about extraterritoriality are no impediment to that approach.
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