Lexmark Int’l. v. Impression Prod. (Fed. Cir. 2015) (en banc)
Acting sua sponte, the Federal Circuit has ordered en banc briefing on the issue of international patent exhaustion.
As I have previously written, current Federal Circuit precedent on international exhaustion is in direct tension with the Supreme Court’s teaching – albeit in the copyright context. Compare Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351 (2012) with Jazz Photo Corp. v. International Trade Commission, 264 F.3d 1094 (Fed. Cir. 2001). The basic international exhaustion situation occurs when the patentee authorizes a the manufacture/sale of a patented product in a foreign country. And the exhaustion question is whether the U.S. patent is exhausted by that international authorization or instead can the patentee block importation of hte product into the U.S. based upon the U.S. patent. Kirtsaeng says that the foreign action exhausts the U.S. copyright while in Jazz Photo the Federal Circuit held that the foreign action does not exhaust a U.S. patent.
The patent exhaustion doctrine has also been complicated by the largely impenetrable Quanta and Mallinckrodt decisions. What types of servitudes can a patentee place on a patented product and how do those restrictions and obligations impact exhaustion?
The en banc order presents the following two questions:
(a) Should this court overrule Jazz Photo Corp. v. International Trade Commission, 264 F.3d 1094 (Fed. Cir. 2001)?
(b) The case involves (i) sales of patented articles to end users under a restriction that they use the articles once and then return them and (ii) sales of the same patented articles to resellers under a restriction that resales take place under the single-use-and-return restriction. Do any of those sales give rise to patent exhaustion? In light of Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008), should this court overrule Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700 (Fed. Cir. 1992), to the extent it ruled that a sale of a patented article, when the sale is made under a restriction that is otherwise lawful and within the scope of the patent grant, does not give rise to patent exhaustion?
Briefs favoring a change in the law (supporting Impression) are due within 45-days and briefs supporting the status quo will be due within 30-days following. The Federal Circuit has indicated that briefs of amici curiae may be filed without consent or leave of the court “but otherwise must comply with Federal Rule of Appellate Procedure 29 and Federal Circuit Rule 29.”