Brief of 44 Law, Economics and Business Professors as Amici Curiae in Support of Respondent in Impression Products, Inc. v. Lexmark International, Inc.

48 Pages Posted: 28 Feb 2017 Last revised: 10 Mar 2017

Jonathan Barnett

USC Gould School of Law

Ted M. Sichelman

University of San Diego School of Law

Date Written: March 6, 2017

Abstract

Patent transactions are a key component of technology markets, enabling patent owners and other firms to efficiently commercialize new technologies on the costly and risky path from “lab” to “market.” Mandatory patent exhaustion without the possibility of contractual waiver or modification substantially limits the range of possible transactions by precluding the enforcement via patent infringement actions of downstream restrictions relating to sales of patented products. Although mandatory patent exhaustion can mitigate problems of notice and related transaction costs, its categorical approach substantially reduces the static and dynamic benefits — including to consumers — of customized patent transactions.

Instead, we support a presumptive approach to patent exhaustion, which allows contractual opt-out when clear notice is provided of a downstream limitation that is otherwise lawful. Such a rule best promotes the invention and commercialization goals of patent law and also is more consistent with the body of prior Supreme Court opinions. Thus, presumptive exhaustion should apply to domestic sales of patented products. Additionally, we argue that while there is little legal basis for exhaustion in the context of foreign sales, should the Supreme Court adopt an international exhaustion doctrine, it should be presumptive for similar reasons.

Keywords: Intellectual Property, Patent Exhaustion, International Exhaustion, Patent Licensing, Downstream Restrictions, Lexmark, Impression Products

JEL Classification: L24, O34

Suggested Citation

Barnett, Jonathan and Sichelman, Ted M., Brief of 44 Law, Economics and Business Professors as Amici Curiae in Support of Respondent in Impression Products, Inc. v. Lexmark International, Inc. (March 6, 2017). USC Law Legal Studies Paper No. 17-10; San Diego Legal Studies Paper No. 17-266. Available at SSRN: https://ssrn.com/abstract=2923826

Jonathan Barnett

USC Gould School of Law ( email )

699 Exposition Boulevard
Los Angeles, CA 90089
United States

Ted M. Sichelman (Contact Author)

University of San Diego School of Law ( email )

5998 Alcala Park
San Diego, CA 92110-2492
United States
(619) 260-7512 (Phone)
(619) 260-2748 (Fax)

HOME PAGE: http://https://www.sandiego.edu/law/faculty/profiles/bio.php?ID=795

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