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High Court Agrees To Hear Case On Patent Exhaustion Rules

By Matthew Bultman
Law360, New York (December 2, 2016, 4:08 PM EST) -- The U.S. Supreme Court decided Friday to hear a case involving Lexmark over patent exhaustion standards, agreeing to review the Federal Circuit’s holding that foreign sales never exhaust U.S. patent rights and that post-sale restrictions on patented items are permissible.

The Supreme Court granted on Friday Impression Products' petition, which was filed in March. (Credit: Law360)
The high court granted Impression Products Inc.’s petition for a writ of certiorari, filed in March, which raises two questions. The first deals with the Federal Circuit’s longstanding rule that overseas sales of a product don't exhaust a patent owner's right to sue in the U.S.

The second question presented by Impression Products, which Lexmark International Inc. accuses of infringing its printer cartridge patents, addresses whether patent owners can place restrictions on what buyers can do with patented products after purchasing them. The Federal Circuit said such restrictions are permissible.

The closely watched case involves Impression’s business of refurbishing and refilling Lexmark cartridges and reselling them. Impression does not dispute that it infringes but argues that Lexmark's patent rights were exhausted under two theories.