Issue: Intellectual Property
Court: U.S. Supreme Court
Lower Court: U. S. Court of Appeals for the Federal Circuit
The "patent exhaustion doctrine"-also known as the "first sale doctrine"-holds that "the initial authorized sale of a patented item terminates all patent rights to that item." Quanta Computer, Inc. v. LG Electronics, Inc. This case presents two questions of great practical significance regarding the scope of this doctrine on which the en banc Federal Circuit divided below:
I. Whether a "conditional sale" that transfers title to the patented item while specifying post-sale restrictions on the article's use or resale avoids application of the patent exhaustion doctrine and therefore permits the enforcement of such post-sale restrictions through the patent law's infringement remedy.
II. Whether, in light of this Court's holding in Kirtsaeng v. John Wiley & Sons, Inc.,, that the common law doctrine barring restraints on alienation that is the
basis of exhaustion doctrine "makes no geographical distinctions," a sale of a patented article authorized by the U.S. patentee-that takes place outside of the United States exhausts the U.S. patent rights in that article.
The RLC joined a brief in support of the employer’s petition for certiorari. The employer’s petition asks the Court to review the Federal Circuit’s decision that foreign sales never exhaust U.S. patent rights. The RLC’s amici brief asks the Court to grant the petition and explains how the lower court’s limitations on the first-sale doctrine will negatively affect both industry and consumers.
Procedural History and Case Documents: