Supreme Court Limits Post-Sale Patent Rights in Impression v. Lexmark

The Supreme Court ruled in​ Impression Products v. Lexmark International Tuesday against the Federal Circuit Court of Appeals on domestic and international patent exhaustion. “A patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose or the location of the sale,” said Chief Justice John Roberts. The Supreme Court voted 8-0 to overturn precedent for domestic patent exhaustion and 7-1 to nix international exhaustion precedent. Justice Ruth Bader Ginsburg dissented on international exhaustion, contending a company retains overseas patent rights at sale. Justice Neil Gorsuch didn’t take part. The Federal Circuit had said a company could choose to exhaust only some of its patent rights at the time of a product’s sale, opening up the possibility of an infringement lawsuit if a user violated a company's reserved rights. The “misstep” in Federal Circuit “logic is that the exhaustion doctrine is not a presumption about the authority that comes along with a sale; it is instead a limit on ‘the scope of the patentee’s rights,’” the Supreme Court ruled. It's a disappointment but confirms that Lexmark’s “return program agreement remains clear and enforceable under contract law,” said General Counsel Bob Patton in a statement. Impression is happy the court "reaffirmed important limits on the scope of patent rights,” said counsel Andrew Pincus of Mayer Brown. The decision “is a strong recognition that consumer rights have primary importance,” said Public Knowledge Patent Reform Project Director Charles Duan.