October 4, 2022

Volume XII, Number 277

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October 03, 2022

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Federal Circuit to Decide Patent Exhaustion en banc

The “first sale” doctrine provides that the “unrestricted sale of a patented article, by or with the authority of the patentee, ‘exhausts’ the patentee's right to control further sale and use of that article by enforcing the patent under which it was first sold.”  Jazz Photo Corp. v. International Trade Commission, 264 F.3d 1094, 1105 (Fed. Cir. 2001).  But a patent is enforceable only within the country or region that issues the patent.  So what happens when that first sale occurs outside of the United States?

In a case raising that issue, the Federal Circuit Court of Appeals has ordered that the initial determination of the case of Lexmark International, Inc. v. Impression Products, Inc. be made by the full court sitting en banc.  The apparent cause for this unusual move is a seeming inconsistency between the United State Supreme Court’s view of the first sale doctrine as applied to the sale of a copyrighted article and the Federal Circuit’s view of the doctrine in a patent context.   At issue is whether a patent owner’s sale of a single-use ink cartridge outside of the United States exhausts the patent owner’s rights under a United States patent, even when the sale is accompanied by a single-use license and the ink cartridge has been simply refilled by the accused infringer. 

In the copyright context, the United States Supreme Court has held that a foreign first sale of an article exhausted the seller’s U.S. copyright. Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351 (2012).  In Jazz Photo, the Federal Circuit held that an authorized first sale of a single-use camera outside of the United States did not exhaust rights under a United States patent on single use cameras and that importation of a refurbished camera would constitute an act of infringement. 

The appellant, Impression Products, argues that the same rule must apply to the sale of a patented product and to the sale of a copyrighted article outside of the United States, and that Jazz Photo must be overruled.  Although it is hard to forecast which cases will ultimately be decided in the Supreme Court, this is one to watch.      

© 2022 Honigman Miller Schwartz and Cohn LLP National Law Review, Volume V, Number 112
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William Berndt  Honigman Miller trade secrets false advertising trade secret law
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 Mr. Berndt is a trial lawyer with substantial experience in state and federal courts across the country. He focuses his practice on trade secret and false advertising claims. He represents businesses and senior executives in disputes relating to noncompetition agreements, trademark and copyright, fraud, professional liability, internal investigations, and general business and commercial litigation. Mr. Berndt has first-chair experience in trials, arbitrations and other proceedings.

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David L. De Bruin appellate attorney patent litigation USPTO Honigman Chicago
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Mr. De Bruin is a seasoned first-chair trial and appellate attorney. He concentrates his practice on patent litigation and related proceedings before the United States Patent and Trademark Office. Mr. De Bruin successfully argues legal issues, as well as explain the most complex technology to judges and juries.

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Mr. Fruchter defends or initiates litigation when it is inevitable and avoids lawsuits where possible. He provides zealous and creative representation that protects his clients’ legal rights and advances their strategic objectives. Mr. Fruchter litigates in state and federal courts across the country, and he has handled matters involving international and cross-border issues.

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Mr. Gowen represents companies, individuals and law firms in disputes, including those involving intellectual property, trade secrets, unfair competition, employment matters and other business litigation matters. He approaches litigation with an eye toward results; understanding that advancing his clients’ litigation strategies should fit within their overall business interests.

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Steven A Weiss Litigation attorney Honigman Law firm Chicago ediscovery
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Mr. Weiss provides advice on a wide variety of business litigation for companies and business people. He is focused on resolving business disputes with particular experience handling intellectual property, breach of contract, trade secret, employment and covenant not to compete matters. Local and national companies and individuals retain Mr. Weiss to handle a full range of business disputes because they trust his judgment and litigation skills.

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