“Supreme Court to Review Important Patent Exhaustion Decision”December 6, 2016
On December 2, 2016, the United States Supreme Court agreed to review Lexmark Int'l, Inc. v. Impression Prods., Inc., where the Federal Circuit decided that the doctrine of patent exhaustion did not prevent Lexmark from using patent infringement claims to restrict purchasers of its printer ink cartridges from reusing them. As we wrote in our post from earlier this year, the Federal Circuit decision is arguably inconsistent with two lines of Supreme Court cases.
While use of patents to enforce post-sale restrictions is relatively rare, for businesses using those techniques, the Supreme Court review could eliminate certain business models. Each line of prior Supreme Court cases has limits, caveats, and arguable loopholes that may survive the newest round of review, so companies that use post-sale restrictions may want to review their business structures and agreements with customers before the Supreme Court decides the case, which is likely to be close to when its term ends in June 2017.
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