Federal Circuit: foreign sales do not exhaust patents
Washington DC | 17 February 2016

The US Court of Appeals for the Federal Circuit has ruled that foreign sales do not exhaust patent protection in the US, despite a contrary Supreme Court copyright decision.

Ruling en banc on 15 February in Lexmark International v Impression Products, the Federal Circuit upheld its doctrine of patent exhaustion as written in decisions from 1992 and 2001.

The Federal Circuit revisited the case en banc, after previously finding that Impression had no right to resell Lexmark toner cartridges abroad and in the US due to the doctrine of patent exhaustion, following the Supreme Court’s Kirtsaeng 2013 decision, which held that the first sale doctrine in copyright law does not apply to works that were first lawfully manufactured and sold abroad.

The 1992 Mallinckrodt v Medipart and 2001 Jazz Photo Corp v International Trade Communication decisions, which the Federal Circuit used to craft the uncodified doctrine of patent exhaustion, stand despite the Supreme Court’s Kirtsaeng decision.

“Kirtsaeng is a copyright case holding that 17 USC §109(a) entitles owners of copyrighted articles to take certain acts ‘without the authority’ of the copyright holder,” ruled the Federal Circuit.

> “There is no counterpart to that provision in the Patent Act, under which a foreign sale is properly treated as neither conclusively nor even presumptively exhausting the U.S. patentee’s rights in the US.”

As written in Medipart and Jazz Photo, foreign sales of patented products are barred when single-use or no-sale restrictions exist and are communicated clearly, regardless of the first sale, including whether it was first made abroad or in the US.

Author: Tammy Facey

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