Impression Products, Inc. v. Lexmark Int’l, Inc. (Supreme Court 2016)
I see the dispute between Impression and Lexmark as more of a property law issue than one focusing on patent law. Of course, the Federal Circuit sees it differently. In its en banc opinion, the Federal Circuit reaffirmed (1) that a seller can use its patent rights to block both downstream resale and downstream reuse of a product (here used printer ink cartridges) and (2) that sales of a product abroad presumptively do not exhaust the US patent rights associated with that product, even when the US patent holder expressly authorizes those foreign sales. Both of these holdings turn on the fact that the goods in question are covered by patent rights. For unpatented goods, these covenants and restrictions generally do not bind subsequent bona fide purchasers.
Impression raises the following questions in its newly filed petition for writ of certiorari:
1. 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.
2. Whether, in light of this Court’s holding in Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351, 1363 (2013), 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.
I see the Federal Circuit’s decision as dangerous in the way that it undercuts the notion of ownership and transfer-of-title. Restrictions on use and resale of goods have traditionally been unenforceable against downstream owners as a mechanism for facilitating a robust market economy.
- Brief: Impression Products v. Lexmark cert petition (no appendix)
- Decision: Federal Circuit en Banc decision
- Daniel Hemel and Lisa Larrimore Oulette, Will the Federal Circuit Recognize the U.S.-Foreign Tradeoff in Friday’s Lexmark Argument?
- John Duffy and Richard Hynes, Statutory Interpretation and the Exhaustion Issues in Lexmark v. Impression Products
- Samuel Ernst, Of Printer Cartridges and Patent Exhaustion: The En Banc Federal Circuit is Poised to Clarify Quanta
- Jason Rantanen, En banc Federal Circuit affirms Mallinkrodt, notwithstanding Quanta
- Dennis Crouch, Lexmark and Disposability: Gumming Up the Market for Refills and Repairs
- Dennis Crouch, Lexmark v. Impression: The Facts of the Case
- Dennis Crouch, Presumptions in the Right to Import, Reuse, and Resell