Exhaustion under Judge Rich

Reading Prof. John Witherspoon’s recent remarks about Judge Giles S. Rich led me to a 1999 interview of Judge Rich by Prof. Janice Mueller titled An Interview with Judge Giles S. Rich, 9 FED. CIR. B.J. 75 (1999).  One of the topics discussed was the doctrine of patent exhaustion – also known as the first sale doctrine. The doctrine was central to Bowman v. Monsanto Co., 133 S.Ct. 1761 (2013) and is also central to the case now pending before the Supreme Court, Impression Products, Inc. v. Lexmark International, Inc., Supreme Court Docket No. 15-1189 (2017).

The following is an excerpt:

Question: I’ve heard that you disagree with the reasoning of the so-called “first sale doctrine.” What’s wrong with the idea that the first authorized sale of a patented product “exhausts” the patentee’s right to control the subsequent disposition of that particular item?

Judge Rich: My position is simple: No patent right is involved and nothing is exhausted. Talking about exhaustion of the patent right is nonsense and it’s about time to stop talking nonsense. To explain, I have to discuss two things: (1) what the patent right is; and (2) what is the meaning of “exhaustion.” It is no longer debatable what the patent right is. As I just explained, the Supreme Court told the country in 1852 in Bloomer v. McQuewan that it consists altogether in the right to exclude others – and that is all it is. It is not an ambiguous “exclusive right”; it is a simple right to exclude others. Period.

Now, the premise is that the patentee made and sold the patented invention. That was the so-called “first sale.” What did his right to exclude others have to do with those acts? Absolutely nothing! In manufacturing, was he excluding anyone? No. In selling, was he excluding anyone? No! Then he wasn’t exercising his patent right, was he? The trouble stems from the old ambiguous statutory definition of the patent right as the “exclusive right to make, use and sell.”

Turning to the meaning of “exhaustion,” it means the state of being drained or used up completely. It assumes that there is something to be used up. Well, since the patent right is not involved, how could it be used up? It couldn’t have been used, even a teeny bit, and it certainly was not exhausted.

But that’s not all there is to the analysis. What is this so-called “first sale” of an article on which the seller happens to have a patent? It is a simple transfer of ownership – a chattel or personal property – from one person to another. The rights of the buyer are governed by the law of property or the law of sales or both. And the law of patents has nothing whatever to do with those rights. Any restraints on the new owner have to be made under the law of contracts, and any contractual restrictions are subject to the antitrust laws. So there is neither use nor exhaustion of patent rights.

Conclusion: The term “exhaustion doctrine” is meaningless nonsense. The legal result is okay but the reasoning is all wrong. The simple fact is that no patent right is involved in the sale of merchandise by the patentee, nothing is exhausted, and the adjective “first” in “first sale” is also without significance. Let’s clean up the thinking about this law.

I do not always agree with Judge Rich’s positions – the fact that he wrote the statute did not give him unlimited authority to interpret the statute.  However, his logic is fairly sound here. The question in my mind is whether the laws of property and sales would be able to pick-up the slack — especially under our federalist system where state laws (i.e., those that govern personal property and sales) are subservient to national laws (e.g., the patent laws).  Seemingly, no state law that limits patent rights could be enforceable.  The saving grace in this chain of thought comes from 35 U.S.C. 261 which states “Subject to the provisions of this title, patents shall have the attributes of personal property.”

Dennis Crouch

About Dennis Crouch

Law Professor at the University of Missouri School of Law. Co-director of the Center for Intellectual Property and Entrepreneurship.

92 thoughts on “Exhaustion under Judge Rich

  1. Maybe he spoke more on exhaustion. I think given some of the criticism in the comments of this post that perhaps the author would dig into the issue a bit more to see what else J. Rich said about exhaustion.

  2. IJoe If “nothing is exhausted,” does that mean that I can sell you a patented item and then sue you for infringement when you use it? Presumably Judge Rich would say no, given that this would be ridiculous

    LOLOLOLOLOLOLOLOLOL

    Because Judge Rich would never say anything ridiculous? That is truly funny.

    This “ridiculousness” is exactly what Judge Rich is suggesting. He’s saying that if I buy a patented object from you, I’m buying the object but not the right to use it or sell it to someone else without the fear of you shutting me down in court. I have to pay for that right separately. Everyone does.

    And just in case anyone’s keep track, Judge Rich’s opinions on subject matter eligibility were even more ridiculous, a quintessential example of someone “not getting it” either because of some kind of Stockholm syndrome or chronic k00l-aid drinking issue. There’s really not much “great” at all about the guy, except for the greatly exaggerated value of his “insights.” His number one legacy is that he’s primarily responsible for turning the US patent system into a j0ke and a playground for b0ttom feeding lawyers and grifters.

    I suppose if some folks went through the trouble of naming a building or a seminar after him, they feel compelled now to keep inflating his reputation. News flash: a lot of statues and busts end up in the basement, where they always belonged. It’s never too late to chuck the name and recognize that maybe this “great” guy wasn’t all that he was cr@cked up to be.

    Question: was Judge Rich born into privilege, with a shiny golden sp0 0n in his mouth?

    Answer: Rich was the son of Giles Willard Rich, a patent lawyer,

    Gee, what a surprise. A spoiled ivy prep school br@t from Rochester who never stopped believing that handing out more and more entitlements to his own caste was the answer to everything. Nobody could have predicted that!

  3. The great Judge Rich starts out by saying that his position is “simple,” but I’m not sure that it is. If “nothing is exhausted,” does that mean that I can sell you a patented item and then sue you for infringement when you use it? Presumably Judge Rich would say no, given that this would be ridiculous, and that he says the “legal result [of the exhaustion doctrine] is ok,” but then how is that result achieved? By “the law of property or the law of sales,” somehow trumping the patent right? Given that patents are generally used to sue people who are using items that they own, it’s not clear how property could do it, so it would have to be some sort of implied authorization in the sale, I guess. Which according to Lexmark is basically what exhaustion is.

        1. Yes – although here I think that the supremacy clause issues come into play – state law (either statutory, ‘uniform’, common law, etc.) is deemed unenforceable if it conflicts with federal law. So, if we push this off to state property/contract/competition law to handle, we might find that it lacks the power to undermine patent rights.

          1. In which case, it would seem that I could sell you a patented item and then sue you when you use it. But as I said I doubt Judge Rich would find that acceptable.

        2. Yes, Judge Rich’s point is entirely one of vocabulary. It is kind of silly, really.

          Mercifully, we do not usually judge a scholar on the basis of his worst work, but on the basis of his best work. Judge Rich’s work on exhaustion was not his best work, so we should not judge him too harshly on the basis of his momentary lapse here. Indignor quandoque bonus dormitat Homerus, as Horace said.

  4. What?

    The Excerpt of the Judge’s answer completely avoids the issue. The issue is, If I buy a item covered by a patent from the patentee, may I then turn around and sell that item to a third party.

    Why didn’t the Judge address that issue instead of focusing on the semantics of the shorthand name given to the issue?

    And Dennis, why didn’t you comment on THAT?

  5. The saving grace in this chain of thought comes from 35 U.S.C. 261 which states “Subject to the provisions of this title, patents shall have the attributes of personal property.”

    Huh? How does this help? We’re talking about the transfer of products covered by a patent, not the patent itself.

  6. The first sale doctrine has been Sup. Ct. authority for patent cases for more than 100 years, and was based on the ancient common law doctrine precluding restraints on the alienation of chattels [personal property, versus real property], not patent law.

    1. Motion Pictures Patent corp., to me is one of the best explanations. It falls on the heals of Continental Paper Bag. In Motion Pictures – there was a plate on the bottom of the projectors that listed patents – and said something like – ‘licensed only for use with authorized film stock.’ The camera was sold – bankruptcy? (interesting twist?) – and installed in a new movie theater. The patent holding corp then sued to enforce the ‘only authorized film stock’ provisions on the marking plate. We should probably recall that back then the movie theaters were vertically integrated with the studios. SCOTUS said the rights were ‘exhausted’ on first sale – and could not be used as a subsequent down stream restriction on the ‘only authorized’ film stock provisions. So there is very much an anti-trust/tying (patented and expired patents? – film stock) – restraint of trade – aspect to the case. See, Shatterproof Glass.

    2. See, post 7.

      Paul, regardless of its lineage in common law principles, the doctrine is consistent with the principles of res judicata.

  7. This is why people hate lawyers (yes, I’m one). Sometimes they act like children, being overly literal to a fault. This argument is complete nonsense.

    Selling an item you have exclusionary rights to implicitly carries with it the right to use that item. Otherwise what have you purchased? Nothing. So by selling this particular item, the patent owner has exhausted her chance to exclude the purchaser from using it. Similarly, property is normally alienable, and the patent owner waives her right to exclude the purchaser from selling that item to another. This second sale must also carry the same right to use the item, or the second sale becomes meaningless and the item is effectively not alienable. This is property 101. You don’t need a lawyer to tell you that’s how the world works.

    Patent exhaustion is a reasonable term for this concept. But it doesn’t matter what you call it: implicit licenses, product transference, unicorn prancing. The idea behind it is sound. This overly literal argument about “exclusionary rights” and “exhaustion” is nothing but legalistic navel gazing.

    It just goes to show, even the great ones have crazy ideas sometimes.

    1. And yet, the normal use of seed was not “exhausted” in the Monsanto case…

      This is not as much a matter of “lawyers being overly literal” as it is a matter of HUGE $’s at stake and in play.

  8. The more interesting intersection here comes from the nascent judicial “understanding” that patents are not property at all (personal or otherwise).

    As a “public right,” there is nothing to exhaust in any “sale.”

    Next seed to think about in that chain of reason is if indeed a public right, why should private individuals have to pay to enforce it?

    (the adage of be careful of what you wish for comes to mind)

    1. As a “public right,” there is nothing to exhaust in any “sale.”

      Where is that written? The definition of the term “public right” is evolving under our feet.

      Maybe patent rights are more like “quasi public rights.” What does that mean for the exhaustion doctrine?

      1. I was initially uncomfortable with the CAFC deciding MCM on public rights grounds, but the more I read the related jurisprudence and related scholarship, but more I come to think that this is much ado about nothing. The term “public rights” used to mean something, but it has been allowed to blur to the point where it really just means “you have this right because of a Congressional enactment.” If that is all it means, then of course patents are public rights. And patents are also private property at the same time. The two categories are less mutually exclusive than you might think from the words “public” and “private.”

        1. The mutually exclusive part Greg comes from the word “property.”

          You cannot clench tight your eyes and “blur” the distinction away (just as you cannot have your cake and eat it too).

        2. Greg, if patents are public rights then Congress can create any remedies it wants and have them adjudicated in any forum it pleases. In fact, Congress could simply provide inventors gold stars, medals, pensions or something of the sort.

          But that is not the what the Constitution says. Congress only has the power to grant exclusive rights, and exclusive rights by their nature are property. Under the consistent Supreme Court jurisprudence, public rights do not embrace property.

          Thus, while Congress does not have to award inventors patents, if it does so, they are property and their validity must be adjudicated in courts of law and to a jury if requested.

          But then again, we have the Federal Circuit who simply does not agree with this and implicitly agrees that Congress could create systems that do not provide exclusive rights to inventors.

          1. [E]xclusive rights by their nature are property.

            Nonsense. As it happens, Congress has tried to make the exclusive rights it grants to be as much like property as possible, but there is no logical necessity to compel that state of affairs. Congress could have said that an inventor’s exclusive rights are non-transferable. That would be about as non-property as it gets. It is hardly the nature of exclusive rights that they must be akin to property.

            Under the consistent Supreme Court jurisprudence, public rights do not embrace property.

            What is this “consistent” jurisprudence of which you speak. It seems to me that the jurisprudence on “public rights” is a welter of confused sui generis holdings, with very little “consistency” at all (except perhaps the consistency of mush).

            1. Greg, even Stern v. Marshall said that public rights to not extend to property cases.

              Regarding newly created rights, the SC has held that if Congress creates a remedy of the kind traditionally litigated in the courts and to a jury, it must be tried to an jury. For example, statutory copyright damages in Feltner had to be tried to a jury despite Congress’s command to the contrary.

              Patents provide exclusive rights. Their validity is exclusively one for the courts under all Supreme Court authority. All of it.

              1. Yes, that is my understanding of the private v. public rights matter. A private right – has the protection of the 7th Amendment. A public right can be anything Congress conjures up. Viewing the issue from the other side – I wonder if Congress could grant patents – in the form of the colonial trade monopolies. I would hazard the answer is NO, and that is why the patent clause is limited to Authors and Inventors.

                1. I wonder if Congress could grant patents… in the form of the colonial trade monopolies. I would hazard the answer is NO…

                  I would definitely answer yes. This would easily come under Congress’ commerce clause powers. Saying “Company Y is the only entity allowed to sell tea in the U.S.” is definitely a regulation of commerce. Given than we grow little (no?) tea here in the U.S., this could come under the heading of regulation of international commerce even before the Wickard revolution. Since Wickard, however, it gets even easier. Congress just has to say that limiting the sales of tea to just one entity has an aggregate effect on the interstate tea market, which is surely true.

                  I do not think that this would be a good idea. Quite the contrary. That is not to say, however, that there is any constitutional obstacle to the enactment of such a monopoly scheme.

                2. You misstepped – falling under the commerce clause is clearly different than falling under the patent clause.

                  Such a different thing would not be patent law.

  9. A has patented C. He holds the right to exclude other from making using or selling C.

    A sues B over making the patented item C. A wins, and collects damages D. B sells C to E, who uses C. Can B sue E for using C and collect a second royalty, or obtain an injunction?

    Even before Blonder-Tongue there was a thing called privity, where the privies of a party to a judgment were bound by it. The privy, E, is entitled to the benefit of the satisfaction of the judgment by his privy B. Upon satisfaction, the patent right in C vis-à-vis B and B’s privies is entirely exhausted.

    Now, so considered, the situation is exactly like the private transaction of the patentee making C, selling it to E. Can he sue E for infringement? No. And this is consistent with the law of judgments and patent law.

    The principle is that the patentee having received demanded consideration for the sale of C is satisfied under the law of patents for its subsequent use and further sale.

    1. Monsanto had something to say about that subsequent use (even as they had poorly drafted their contracts and allowed an item to enter the stream of commerce unfettered).

      😉

        1. That just doesn’t matter as they (Monsanto) were in complete control of how they sold the first seeds and they failed to protect themselves from the full exhaustion of the sale of progeny to the graineries.

          Once that full sale of the proginies to the graineries occurred, ALL patent rights were exhausted (including “make”).

          As written, the Supreme Court has gotten the Monsanto case wrong.

        2. Monsanto has the virtue of being one of only two* SCotUS patent cases in the last ten years in which the Court not only arrived at the legally correct result, but did so by articulating an intelligible rule that lower courts can easily and consistently apply. Reading that case makes me want to cheer for Justice Kagan every time I hear here speak. Would that the Chief would put her in charge of writing more patent opinions.

          Justice Kagaan also did a fine job with Caraco Pharma, although that is more properly an FDA case, rather than a patent case.

          * The other being Justice Sotomayor’s opinion in Microsoft v. i4i.

          1. i4i is also clear for the most part. (Its primary failure is that it does not address how the presumption applies to invalidity doctrines that are questions of law, such as indefiniteness and obviousness.)

            1. I am not understanding your response. The invalidity defense at issue in i4i was 102(b). How is that any less a question of law than 112(b) or 103(a)?

              In other words, I read the presumption as applying clearly to all invalidity defenses. Is there some reason I should not read the decision as being so clear?

              1. The holding in i4i was that an invalidity defense must be proven with clear and convincing evidence. This particular standard of proof is generally only applied to factual conclusions made by judge/jury based upon evidence presented. That works for the issue at hand in i4i – anticipation – since anticipation is a question of fact.

                But, the holding is somewhat confusing to me if we attempt to apply it to questions of law, such as the indefiniteness of a patent claim. Does the clear and convincing standard also apply in this situation?

                1. I see you were responding to my question even as I was typing my disregard message. Thanks for your follow-up.

                2. Dennis, often there is a battle of experts over what something means to one of ordinary skill in the art. The determination of the meaning of something or whether one would know the meaning with any certainty, is clearly a factual matter, and should be given to a jury if validity is at stake.

                3. Ned says: Dennis, often there is a battle of experts over what something means to one of ordinary skill in the art. The determination of the meaning of something or whether one would know the meaning with any certainty, is clearly a factual matter, and should be given to a jury if validity is at stake.

                  Crouch: Isn’t this what the Supreme Court considered already in Markman. The court recognized that there are factual issues in claim construction, but that they should be decided by the judge not the jury.

            2. Please disregard the previous response. I realize now that you are making a distinction between questions of law and questions of fact. I originally read 7.1.1.2.1 as if it were distinguishing between questions of law and questions of equity. Now that I realize what you meant to say, I also understand what you find unclear about i4i.

          2. Except, Greg, the “right result” was not achieved – as is being exemplified in the repeated discussion points here.

            That you like that decision (and your subsequent feelings) are different than your purported conclusion is noted.

      1. You keep singing about Monsanto, but the key fact of Monsanto is that the sold item is self-replicating, so meaning of “making” was in question and the roles and rights of actors involved (or not) in the “making” was in question.

        I think they decided the case the wrong way, but what’s done is done.

        1. You keep singing about Monsanto… I think they decided the case the wrong way, but what’s done is done.

          Fair enough. When I said in 7.1.1.2 that the Court reached the legally correct result, I was speaking with my tongue partially in my cheek. There is no statute on this point. Exhaustion (at least in the patent context) is entirely a creation of common-law, so any result the Court reached would, by definition, be the legally correct one.

          Still and all, I think that the Court’s decision was not only legally correct (as noted above, this is a mere tautology in the case of a patent exhaustion case), but also socially optimal. As you note, “the key fact of Monsanto is that the sold item is self-replicating.” Self replicating technologies a big part of current research in both nanotech and biotech. If the Court had gone the other way in Monsanto, it would have essentially eviscerated any incentive for research in self-replicating nanotech or biotech. Given that these are two of the most promising research fields in the modern U.S. economy, we would all have been the worse off if the Court had held for Bowman.

          1. I’m troubled by Monstanto, but I understand it was a difficult case and I do appreciate the arguments on the other side about incentives.

            There may need to be a sub-doctrine in place about indirect infringement with self-replicating technology. If every farmer around Farmer Smith uses it, and the seeds blow onto his fields, and he did nothing intentional to cause the infringement, I can’t see liability being fairly ascribed. Monsanto said they would not go after people in that situation, and its not really likely with THAT product, but it could be with others.

            1. I can see the sense of what you are saying, but it seems to me that the carve-out you propose would fit better as a proviso in §271 than as a new wrinkle on exhaustion. After all, what you are talking about would be true even in circumstances in which exhaustion could not possibly attach.

              Imagine if some worker in the nanotech lab had the window open and some self replicating technology blew out the window onto your land. No sale has been made, so first-sale is not implicated. I agree with you, however, that it would not be fair to you if you were held liable for the infringing “making” that occurs on your property.

              Presumably, the solution is language in §271 to the effect “notwithstanding any paragraph above, no person shall be liable for infringement by making a self-replicating technology, so long as (a) said person did not act to set said self-replicating technology into action and (b) said person makes good faith efforts to eliminate said self-replicating technology once said person becomes aware thereof,” or some such.

              1. I can’t see an affirmative responsibility to mitigate it; that costs time and money and why should a person who has done nothing be exposed to any obligation?

                Maybe “making” needs to be further defined to include human intention, just as “abstract” should be defined to exclude machine use.

                1. I take your point about no affirmative duty to mitigate. Perhaps “does not obstruct good faith efforts of the patentee to remove said self-replicating technology. The patentee shall be liable in such event for all damages to said person and to said person’s property’s and chattels caused by (i) the self-replicating technology or (ii) the removal of the same.”

                  I am less sanguine about redefining “making” to require a showing of human intention. That would likely lead to the same draining of incentives that the Court avoided in Monsanto.

                2. Both of you are – as they say – into the weeds.

                  Exhaustion is – or is not – and the notion of “self-replicating” is not a new growth in that case, as it was not decided on that factor (while very much leaving the points that I have presented as thorns in the side of what the Justices wrote).

        2. Mr. Snyder: “ but the key fact of Monsanto is that the sold item is self-replicating, so meaning of “making” was in question

          Does
          Not
          Matter

          Monsanto did not protect itself from the full unfettered sale of progeny seed into the open market.

          That sale exhausted ALL rights – including “making” (however that term is applied to self-replicating or non-self-replicating items).

          what’s done is done

          Except when it is not – as here, that very “done” becomes UNDONE if the aspects of patents are property are changed to patents are public rights.

          There are necessary and unavoidable complications of “getting what you asked for.”

  10. I don’t think it’s useful to get all pointy-headed about the issue.

    People buy stuff with the expectation that they can use it and that’s the way it’s always been. If Congress wanted to flip that expectation they could have done so expressly (news flash: Congress will never do this).

    The exhaustion doctrine stands for the basic proposition that if a patent holder wants to reserve rights in an object that he sells he needs to make that clear to the buyer otherwise the sale of an item exhausts the patent rights in that particular item.

    It’s perfectly sensible to put the burden for reserving rights on the patentee who’s making the sale, rather than on the buyer who is far more likely to be legally incompetent. Really, the only way you can fail to see the overwhelming sensibility of this set-up is if you’re an arrogant judge whose drunk on patent kool-aid. And that’s exactly what Judge Rich was.

    1. ” arrogant judge whose drunk on patent kool-aid.”

      I’m pretty sure Judge Rich was the guy that brewed the patent kool-aid.

      1. arrogant judge whose drunk on patent kool-aid.

        …as opposed to an arrogant non-judge (and non-person attempting to not understand the law as actually written and passed by Congress) drunk on the anti-patent look-aid and attempting to have the wrong branch of the government rewrite the statutory law that is patent law…

        Hmm, all of your “feelings” aside, Malcolm, I know which accords with how our legal system was set up.

        You don’t like that – I get that; but let’s not pretend that the legal system has been set up differently, just to pursue your “feelings.”

    2. The exhaustion doctrine stands for the basic proposition that if a patent holder wants to reserve rights in an object that he sells he needs to make that clear to the buyer otherwise the sale of an item exhausts the patent rights in that particular item.

      And yet, that is exactly what Monsanto did NOT do (and they still won with the Court).

    3. That’s not true. As usual. Did you even go to law school? If so, please tell us where, so we can reflect on the disgrace you bring to your alma mater.

  11. I think the issue of “first sale” has to be considered under something even more fundamental than exhaustion of the right given by registration, namely, how the mechanism by which patent system is supposed to promote the progress.

    Some say the mechanism is simple, to grant time-limited exclusive rights in return for making available to the public an enabling disclosure of the subject matter claimed.

    Others say that the mechanism is more complicated, including capping the chance to make monopoly profits to the term of the patent, no more.

    Europe runs its patent system the simple way, the USA the more complicated way.

    Which is the better mechanism. Judge Rich doesn’t say.

    1. Max, See post 7. The principle is that the patent owner can sue, and receive full satisfaction, an infringer or his privies just once for particular infringement.

  12. Judge Rich: The rights of the buyer are governed by the law of property or the law of sales or both. And the law of patents has nothing whatever to do with those rights.

    “Nothing whatever”? Seems a tad disengenuous, given that abstraction we refer to as “a patent right” is defined, in part, by reference to “property” rights and sales.

    1. Yes, I think this is the major flaw in Judge Rich’s reasoning. Patent rights do limit what an owner can do with her property, so they (unless exhausted) limit “the rights of the buyer,” and thus have something to do with them.

  13. Reading Prof. John Withersp0 on’s recent remarks about Judge Giles S. Rich led me to a 1999 interview of Judge Rich

    They led me to the w@ stebasket where I regurgitated my lunch. This passage in particular:

    According to those cases, to be patentable an invention had to amount to invention.” I’m not making this up! It was a vague and subjective standard.
    Judge Rich called it a judge’s plaything.

    So section 103 was enacted.

    103, the statute later described accurately as “g0bbledyg0 0k.” Heckuva job, Judge Rich!

    Professor Withersp0 on, the author of this puff piece, is apparently as cl u el ess about subject matter eligibility as his hero. Judge Rich can spin like a top in his grave until the w0rms licking his bones perish of dizziness and it won’t change these facts: 103 is clear as mud, and “the great” Judge Rich did far more harm to the US patent system than good.

    Also, I challenge Professor Withersp0 on to come here and tell everyone in simple sentences (1) what the facts were in Prometheus v. Mayo; (2) what was Prometheus’ theory of infringement and (3) what the obvious unacceptable consequences to our patent system and our society would be if Prometheus’ position had been adopted instead of being tanked 9-0 (and never to be overturned). Good luck, Professor Withersp0 on! You’ll have to stop kissing the ring on the finger of Judge Rich’s c0rpse for a few minutes to answer. That’ll be quite a challenge.

      1. I think it was the Federal Circuit’s TSM test that was called gobbledyg0 ok, not the text of Section 103

        I don’t recall the details of the exchange anymore. It was Scalia in oral argument, right?

        The TSM test seems like a more concrete replacement for “inventive” than “obviousness” (and I’m definitely not defending strict TSM here).

        “Inventive” means “creative”. “Non-obvious” means “not self-evident.” If something’s “self-evident”, then it’s not creative. How does the term “obvious” achieve anything?

        Of course the Supreme Court was going to have to step in and fill in the empty void represented by the term “obvious”.

        1. Of course, you should realize that it was Congress rebutting that selfsAme Court by taking away the common law power to set the meaning of the word “invention” WITH the replacment of section 103 that was what occurred in 1952.

          And for a very good reason. The Court had become far too anti-patent (the phrase “the only valid patent is one that has not yet appeared before us” ring a bell?).

  14. I do like Judge Rich’s straightforward analysis of the whole “doctrine” but I think he goes awry in so far as he seems to blatantly not understand that the “doctrine” involves a “2nd order” metaphorical “draining” of the right. As he says, no actual “draining” of the right takes place of course, it’s that the courts consider the right “drained” when you go out and profit from the invention (which is the whole point to the right to exclude others).

    I would like to have conversed with the old timer.

    1. I would like to have conversed with the old timer.

      That would be grand. If this were one of those “ten people living or dead to invite to dinner” hypotheticals, Judges Rich and L. Hand would definitely be on my list. In fact, I would probably want to limit it to just those two (or maybe Justice Story as well), so that I would not bore the other guests when all we talked about is patent law.

  15. I do not always agree with Judge Rich’s positions – the fact that he wrote the statute did not give him unlimited authority to interpret the statute. However, his logic is fairly sound here.

    Hm, I almost always agree with Judge Rich, but this strikes me as an example of indignor quandoque bonus dormitat Homerus. The logic is not sound here. The patent right, as Judge Rich rightly explains it, is the right to exclude, but exclude from what? More properly it is the right to exclude from making, using, importing, or selling. Once the patentee sells an item within the scope of the patent right, the patentee can no longer exclude the buyer from selling that item. The patent right is exhausted with regard to that item, insofar as there is no longer a right to exclude from selling. That is a perfectly sound use of the word “exhaustion.”

    1. “That is a perfectly sound use of the word “exhaustion.””

      I agree. It’s what I call a 2nd order metaphorical draining in my above comment. Perfectly reasonable.

      1. It’s what I call a 2nd order metaphorical draining…

        Sure, that seems a sensible way of characterizing it.

        I can agree with Judge Rich that the whole patent right is not exhausted. One can sell a single article and still go on to exclude others from selling any more than that first article, so there Rich is correct to say that the patent right has continued validity that is not “exhausted.”

        With regard to the one article already sold, however, the right really is “exhausted.”

    2. I agree with this, and I would add that though state law is subservient to patent law, it is still binding on the people who live and sell in the state. So if one sells a good, and the UCC says the right to exclude the buyer from using or selling is exhausted by doing so, then the seller is barred from asserting that right.

      1. I don’t know Michael – If Patent Law says you have an exclusive right with no first-sale exhaustion principles, how can state law then say it is exhausted? It seems like the two would be in direct conflict and the Federal Law would prevail.

        1. Saw this late (my subscriptions don’t work). I agree, if patent law said that explicitly, then you would have a supremacy argument. But it doesn’t.

      2. Hmm, maybe something should be said about the nexus of any sale purporting to cover a patent right (or an item protected by a patent right)…

        😉

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