The Interaction of Patent Exhaustion and Transactions in Patented Goods After Impression Products v. Lexmark International

Abstract

In Impression Products, Inc. v. Lexmark International, Inc., the U.S. Supreme Court provided a justification for patent exhaustion and established rules governing its application. Both U.S. and foreign sales of a patented product trigger application of the doctrine to the article sold. This allows patented articles to flow in commerce without any attached patent rights in­terfering with the free alienability of such articles. Further, conditions attached to the sale of patented articles are enforceable via breach of contract actions rather than by patent infringement actions. Analogizing to copyright law, these bright-line rules should permit avoidance of exhaustion by licens­ing mere use rights for patented products. However, it is proposed that bona fide purchaser rules apply to such licenses so that downstream users of pat­ented products may possess these products free of any use restrictions they lack notice of; thereby furthering the policy of minimizing restraints on alien­ation of such goods.