by Dennis Crouch
The en banc holding of Lexmark v. Impression is simple – the principles of Mallinckrodt and Jazz Photo are re-affirmed. In particular, the court reaffirmed (1) that a seller can use its patent rights to block both resale and reuse of a product and (2) that authorized sales of a product abroad does not exhaust the US patent rights associated with that product. As Prof. Rantanen explained, although the holding is simple, the ten-member majority panel took 90+ pages to describe how its conclusions conform with 19th – 21st century Supreme Court precedent and why the patent laws should operate differently than the copyright regime in these cases.
The presumptions are of some importance for those operating on the ground. Here, the US court will presume that foreign sales of a product do not exhaust the US patent right. Thus, an importer must obtain a release/license of those rights to avoid liability (assuming a valid and otherwise infringed patent). Of course, that license right may be implied based upon providing notice of the importation intent. In addition, depending upon the location of sale, UCC 2-312 (or its foreign equivalent) may create a presumption of license depending upon the situation.
With regard to limits on domestic resale/reuse, the presumption continues to be that a bare sale without express restriction is delivered free from any resale or reuse restrictions. However, once the restriction is in place, it appears to be bound to the product and thus binding upon subsequent owners who have no contractual agreement or relationship with the patentee. Under the UCC, a bona fide purchaser of a good takes “good title” presumably free of any encumbrance (such as a reuse restriction). UCC 2-403(1). However, as state-law, the UCC is trumped by Federal Patent Law which is the source of encumbrance here. The common law has a long history of prohibiting these types of encumbrances on personal property, but for the Federal Circuit, the patent right overwhelms that tradition.
A Supreme Court petition is likely in this case. The problem though is that Impression is a rather small generic-cartridge company and lacks the funds to hire a top Supreme Court counsel – perhaps especially important here because of the 200 years of Supreme Court precedent relating to the issues at hand. That said, Ed. O’Connor (Impression’s litigation counsel) previously represented Independent Ink in the 2006 Illinois Tool Works case before the Supreme Court.
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 Lexmark Intern., Inc. v. Impression Products, Inc., App. No. 2014-1617, ___ F.3d ____ (Fed. Cir. February 12, 2016) (en banc). En banc order available at 785 F.3d 565 (Fed. Cir. 2015).
 Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700 (Fed. Cir. 1992).
 Jazz Photo Corp. v. International Trade Comm’n, 264 F.3d 1094 (Fed. Cir. 2001)