Exhaustion Doctrine

The exhaustion doctrine, also referred to as the first sale doctrine, is a common law patent doctrine that limits the extent to which patent holders can control a patented product after an authorized sale. Under the doctrine, once an unrestricted, authorized sale of a patented article occurs, the patent holder’s exclusive rights to control the use and sale of that article are exhausted, and the purchaser is free to use or resell that article without further restraint from patent law. Note, however, that under current law, the patent owner retains the right to exclude purchasers of the articles from making the patented invention anew, unless it is specifically authorized by the patentee.

Procedurally, the patent exhaustion doctrine operates as an affirmative defense, shielding authorized purchasers from infringement claims concerning the use or sale of a patented good after the patent owner authorized its sale.

Because the doctrine is only triggered by a sale authorized by the patentee, it is often difficult to figure out if the exhaustion doctrine applies in a particular case, for example, when the patentee restricts or conditions the sale itself, or restricts the use or sale of the patented article once purchased and in the hands of an end user (post-sale restrictions). The 2008 Supreme Court decision in Quanta Computer, Inc. v. LG Electronics, Inc., leaves unclear the extent to which patentees can avoid the exhaustion doctrine through limited licenses. Since its development by the courts in the late 19th century, the patent exhaustion doctrine has raised questions regarding the scope of exclusive rights granted by patents and the extent to which a patent owner may extend those rights to control downstream use and sales of patented articles.

Read more about Exhaustion DoctrineOverview, Limitations of The Exhaustion Doctrine

Other articles related to "exhaustion doctrine, exhaustion, doctrine, doctrines":

Limitations of The Exhaustion Doctrine - Post-Sale Limitations
... The most difficult and unsettled area of the law regarding patent exhaustion are cases involving post-sale restrictions ... violations of such restrictions make a sale “unauthorized,” and therefore make patent exhaustion inapplicable, is still unclear ... that the sales were valid post-sale restrictions that avoided exhaustion ...
Quanta Computer, Inc. V. LG Electronics, Inc. - Supreme Court Opinion - Licensing A Limited Field
... LGE’s argument for non-exhaustion sought to invoke the doctrine of General Talking Pictures Corp ... its right to practice the patents based not on implied license but on exhaustion ... And exhaustion turns only on Intel’s own license to sell products practicing the…patents ...
Quanta Computer, Inc. V. LG Electronics, Inc. - Factual Background
... in any way limit or alter the effect of patent exhaustion that would otherwise apply when a party hereto sells any of its Licensed Products.” Quanta prevailed in the district court under the ... Additionally, the Federal Circuit held that the exhaustion doctrine did not apply, in any event, to method patents ...
Mallinckrodt, Inc. V. Medipart, Inc. - Impact
... The Supreme Court’s rationale in exhaustion doctrine cases was that the purchasers acquired an unlimited property right in the patented products, and that it ... the Federal Circuit's Mallinckrodt decision superseded the earlier line of exhaustion cases ... It has been observed that under the doctrine of the Mallinckrodt case, a patentee may sell its patented product with a legally effective notice prohibiting purchasers from ...
Doctrine Of The General Talking Pictures Case - Impact
... The General Talking Pictures doctrine remains valid law, subject to possible antitrust exceptions (see below) ... The exhaustion doctrine does not operate to free from the patent monopoly product sales that a limited licensee makes to one who seeks to use the sold product outside the licensed field — at least when the buyer has ... Nonetheless, tension exists between the two doctrines — particularly when the field-of-use license is not as explicit as it might be ...

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