by Dennis Crouch
I was surprised at the en banc Federal Circuit’s decision in Lexmark to re-affirm Mallinckrodt — giving a seller power to block future resale and reuse of a patented product. My surprise is grounded in the longstanding tradition in American property law of promoting the free-flow of commerce by refusing to enforce servitudes that limit the alienation or use of goods. To be clear, courts have often enforced contracts between willing parties to this end, but those same courts have refused to allow restrictive covenants to cling to the good and bind any subsequent purchaser. Here, the court held that this type of restriction is enforceable for Lexmark, but only because Lexmark’s product is covered by patent rights.
Apart from the law, the policy issues are incredibly important and relate to the continued increase in both (1) disposable/non-reparable products on the market and (2) manufacturer control over the repair market for products that are reparable by patenting the replacement part itself. In the auto industry, insurance companies and consumers have been fighting this issue for years – pushing lawmakers to negate design patents covering spare-parts when used to limit the supply of less-expensive parts.
In my ideal system, we encourage the creation of high quality and long lasting goods that are reparable (or refillable) at a local level. The best and most direct way to offer this encouragement is outside the patent system. However, the Lexmark decision gums-up the works by creating a cloud over the third-party repair/refill marketplace — a market that is already such a shadow of its former self.